SMRT feels the heat of competition from the new Downtown Line 2

Commuters at the Downtown line platform of the Botanic Gardens MRT station. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Listed rail operator SMRT Corp expects the new Downtown Line 2 - operated by its rival SBS Transit - to adversely affect revenue this quarter.

At a post-results briefing on Tuesday morning, SMRT chief financial officer Manfred Seah said the new line which opened a month ago will erode its revenue by "$5 million to $6 million in the fourth quarter". The fourth quarter ends March 31.

Primarily, the line will "decant" riders away from SMRT's North-South line, the western part of its East-West line, as well as bus services serving the Bukit Timah corridor.

Mr Seah said the impact will be 80 per cent on its MRT revenue and 20 per cent on its bus revenue.

Assuming operating margins of 5.7 per cent and 5.5 per cent for the two businesses respectively, SMRT's operating profit for the two divisions could dip by a little over $300,000 in the fourth quarter, or $1.2 million over a full year.

Mr Seah said SMRT's taxi business is also feeling the impact of ride-hailing apps such as Uber and GrabTaxi.

It said the hired out rate of its taxi fleet dipped in the third quarter ended Dec 31 to 95 per cent, down from more than 97 per cent in the first half.

"There is no question that the entire (taxi) industry is facing pressure from these apps. The challenge will continue, as we compete for a limited pool of drivers," he said, adding that SMRT is "trying" to maintain its hired out rate of 95 per cent.

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