SMRT Numbers Game

The Land Transport Authority (LTA) announced that SMRT has awarded contracts worth about $600 million comprising:

• additional NEL trains - S$234.9 million
• additional CCL trains - $134 million
• re-signalling of the NSEWL - $195 million
• signalling of Tuas West Extension - $40.3 million

The SMRT revenue for the three months to Dec 31 2011 alone is $268.2 million, which means the projected income for a whole year is likely $1.07 billion or more (FY2011 revenue was $969.7 million). Easily pays for the long overdue equipment purchases to address the current operational shortcomings. Assuming the assets are depreciated over 10 years, it will cost them only $60 million a year.  According to Lui Tuck Yew's LTA logic, it appears that SMRT only operates the trains, so the bill is not even picked up by them. However, the depreciation charges will come in handy for net profit calculations.

Another intriguing number to note is that the operating expenses posted for same quarter ending Dec 31 is $227.7 million, of which repairs and maintenance expenses amount only to a pathetic $20.9 million.  Which suggests that the hardware is hardly given top priority by the management in charge. The SMRT 2010 annual report shows similar figures, $79.2 million for the whole year for repairs and maintenance, or about $20 million per quarter. No wonder the trains are breaking down.

The EBITA margin was 32.5% for FY2011, the corresponding net profit margin being 16.6%. Huge juicy profits made from the long suffering commuters who have no alternative public transportation system to turn to.

The employee statistic tells another interesting story: number of employees went from 6,102 in FY2002 to 6,565 in FY2011, about 7% growth over 9 years. But "Staff and related costs" jumped from $184m in FY2002 to $313.6m in FY2011, a jaw-dropping difference of more than 70%. Obviously some people there are getting awfully rich. Make no mistake though, this is not the Melbourne-based bus company who paid out millions in bonuses to its staff for loyalty after owner Ken Grenda profited from selling the family business.