SMRT Corp Ltd : SMRT records 1Q FY2013 Net Profit of $36.5M

Date of Issue: 27 July 2012

SMRT Corporation Ltd

251 North Bridge Road

Singapore 179102

Tel : [phone]

Fax : [phone] www.smrt.com.sg

SMRT RECORDS 1Q FY2013 NET PROFIT OF $36.5M GROUP PERFORMANCE HIGHLIGHTS

Financial Highlights for First Quarter FY2013 Ended 30 June 20121
	1QFY13	1QFY12	% Change
Revenue ($m)	275.2	253.1	8.8
Other Operating Income ($m)	13.8	5.4	156.1
EBITDA ($m)	79.5	71.6	11.1
Total Operating Expenses ($m)	245.1	216.0	13.5
Operating Profit ($m)	43.9	42.4	3.5
Profit Before Tax ($m)	43.3	41.5	4.5
Profit After Tax ($m)	36.5	34.8	4.7
Basic Earnings Per Share (cents)	2.4	2.3	4.6
Economic Value Added ($m)	23.8	21.8	9.1
	As at 30 Jun 12	As at 31 Mar 12	% Change
Net Tangible Assets Per Share2 (cents)	53.6	51.2	4.7
Net Gearing	Net Cash	Net Cash	-

Group revenue rose 8.8% to $275.2 million as both Fare and Non-Fare businesses recorded higher revenue of 8.9% and 8.2% respectively. The train business led growth with a 11.2% or $15.1 million increase in revenue, accounting for 68.1% of the increase in Group revenue, with higher ridership due to full opening of the Circle Line in January 2012.
Group operating profit rose 3.5% to $43.9 million with better performance from Circle Line, taxi, rental and advertising businesses, and a $8.0 million insurance compensation for a rail asset. Profit was however impacted by the $2.0 million penalty imposed by LTA, Committee of Inquiry (COI) related legal and professional fees, and higher staff costs, repairs and maintenance, and depreciation in the Train operations.
Profit attributable to shareholders increased 4.7% or $1.6 million to $36.5 million.

1 All figures are quoted in Singapore dollars.

2 Excludes intangible asset.

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SMRT Corporation Ltd

Total assets amounted to $1.8 billion as at 30 June 2012, up 1.4% from end 4Q FY2012 due mainly to higher property, plant and equipment of $25.2 million with the addition of new buses and taxis. Cash and cash equivalents declined from $195.3 million in 4Q FY2012 to
$185.0 million due to lower net operating cash inflow and higher net investing cash outflow. The Group is in a net cash position of $35.0 million with a gross gearing ratio of 0.15.

OPERATING PERFORMANCE BY BUSINESS (1QFY13 AS COMPARED TO 1QFY12)

Revenue and Operating Profit by Business for First Quarter Ended 30 June 2012
	Revenue	Operating Profit
S$m	1QFY13	1QFY12	% Increase/ (Decrease)	1QFY13	1QFY12	% Increase/ (Decrease)
Train	150.1	135.0	11.2	25.3	22.6	12.1
LRT	2.7	2.5	9.6	(0.3)	(0.2)	(77.4)
Bus	56.0	54.3	3.2	(5.2)	(3.6)	(44.4)
Fare Subtotal	208.9	191.8	8.9	19.8	18.8	5.3
Taxi	31.1	27.3	13.9	1.5	0.4	273.7
Rental	21.5	19.2	11.8	16.2	15.0	8.5
Advertising	8.0	7.1	12.6	4.5	3.9	16.1
Engineering & Other Services	5.7	7.6	(24.8)	0.1	2.6	(95.4)
Non-fare Subtotal	66.3	61.3	8.2	22.4	21.8	2.7
Group Elimination/ Investment Holding	0.1	0.01	766.7	1.7	1.8	(4.9)

Fare revenue rose 8.9% to $208.9 million on higher Train (8.5% increase to 169.3 million) and Bus (3.5% increase to 82.8 million) ridership. Operating profit rose 5.3% to $19.8 million as profit growth from the Train business mitigated losses from LRT and Bus operations. Losses from the Bus operations widened to $5.2 million from $3.6 million a year ago due mainly to higher staff cost and depreciation. Staff costs were higher with the increase in basic salary for bus service leaders and higher headcount.
The Taxi business maintained its positive growth with a $1.5 million profit from $0.4 million with a larger average hired out fleet as the holding fleet rose 11.1% to 3,321 taxis.
Advertising profit rose 16.1% to $4.5 million with increased advertising on trains and stations, while Rental profit rose 8.5% to $16.2 million with increased rental space following new and redevelopment of commercial spaces at various stations. Profit from the Engineering and Other Services segment dropped 95.4% to $0.1 million due mainly to lower consultancy
revenue.

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SMRT Corporation Ltd

Details of the operating metrics are stated in the Annexon page 5.

OUTLOOK AND PROSPECTS

Operational challenges remain for the Group though revenue growth is expected to continue in 2Q FY2013. Fare revenue is expected to be higher on the back of full year contribution from Circle Line and rising ridership levels, while the non-fare business will continue to benefit from higher taxi revenue, rental and advertising sales.
The profitability for the Group is expected to continue to be impacted by higher staff costs, depreciation, and repairs and maintenance. In particular, staff costs for the Train and Bus operations are expected to be higher due to increased headcount and salary adjustments. Depreciation and repairs and maintenance for the Train operations is expected to be higher in line with a larger train fleet and an aging rail network.
The Bus business continues to face challenges as fare adjustments have not kept pace with rising operating costs. The Government has recognised the difficulties of the bus operators in running a sustainable business. Several government initiatives and the ongoing fare formula review, due to complete in early 2013, will look to address these challenges.
The outlook of the Group's rental and advertising businesses remains positive. The rental business is expected to benefit from development and refurbishment of train stations, in particular Woodlands station by the end of FY2013. The advertising business will continue to focus on rolling out new digital initiatives and further establish its position in the Out-of- Home market category.
The Group remains in discussion with LTA on cost sharing for the $900 million asset renewal plan based on the principles of the current Licence and Operating Agreement ("LOA") for the North-South East-West Line. About two-thirds of the asset renewal costs is for the rail infrastructure. Under the LOA, SMRT is responsible to maintain, repair, replace, renew or refurbish all or any part of the operating assets for the train system and can apply to LTA for asset replacement grants for eligible operating assets. SMRT can request LTA to fund for major replacement or renewal of part or whole of the rail infrastructure. The amount of grants
and funding will mitigate the impact of the $900 million asset renewal plan.

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SMRT Corporation Ltd

SMRT's Executive Director and Interim CEO, Mr Tan Ek Kia said: "We are making progress as an organisation to improve our rail system and service reliability, of which our $900m asset renewal plan will play a key role.
The Bus business remains difficult. We are hopeful that ongoing Government initiatives and the fare formula review will help the sustainability of the business.
Prospect for our rental and advertising business remains positive and we continue to explore accretive growth opportunities within, and possibly in areas adjacent to our train station network."
- End -

Enclosures :

1) Unaudited Financial Statements for 1QFY13 ended 30 June 2012
2) Presentation for Teleconference Briefing: 1QFY13 Financial Results
3) Speech by Catherine Lee, Executive Vice President and Chief Financial Officer, of
SMRT Corporation, at Teleconference Briefing on First Quarter ended 30 June 2012.

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ANNEX

OPERATING METRICS

Train

Total Ridership ('000)

Average Daily Ridership ('000)

Average No. of Passengers/Car Operated

Average Peak Period Passenger Load/Car

(No. of passengers) 1

Average Fare (cents)

1QFY13 1QFY12 4QFY12 1Q13 vs 1Q12 (%) 1Q13 vs 4Q12 (%)

LRT

Total Ridership ('000)

Average Daily Ridership ('000)

Average No. of Passengers/Train Operated

Average Fare (cents)

Buses

Total Ridership ('000)

Average Daily Ridership ('000) Load Factor2 (%)

Average Fare (cents)

Taxis

Holding Fleet (as of end-period)

Rental3

Average Lettable Space (sqm)

No. of Shops/Units (as of end-period) Average Occupancy Rate (%)

1 An average of estimated maximum half-hour pax load per car during peak hours for selected stations along North- South East-West line and Circle Line.

2 As different vehicle types have different capacities, the average occupancy rate of buses is expressed as load factor.

3 Figures relate to spaces at MRT stations only.

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