Singapore rail operations record first quarterly loss

SMRT Corporation rail and LRT services have reported their first-ever quarterly loss due to a sharp rise in operating costs.

Announcing its 3QFY14 results, SMRT said profit after tax had fallen by 44.1 per cent to just $14.2 million while the operator’s fare business suffered an operating loss of $9 million from a $7.4 million operating profit last year.

Rail services were one of the worst hit areas, recording a loss of $200,000 despite experiencing a rise in fare revenue.

SMRT said one of the factors was a 10.6 per cent increase in operating costs caused by a 21.4 per cent rise in staff costs and a depreciation of assets. There was also a separate 6.7 per cent increase due to the introduction of travel schemes, namely free travel on early-morning services.

SMRT’s chief executive officer Desmond Kuek said: “Our fare business continues to face cost pressures arising from ongoing efforts to meet heightened demands on service, reliability and capacity.

“The impact of rising costs will be mitigated partially next year by the recently approved fare adjustments, and our continuing efforts to drive higher productivity and cost efficiency. We are engaging the authorities on a timely transition to a viable and sustainable model for the trains and bus businesses.

“We will continue to leverage on SMRT’s core engineering competency and commercial expertise to support business expansion in both fare and non-fare businesses. Sportshub is expected to commence operations within the next few months and we will continue to explore rail business opportunities overseas.”