Shedding light on SMRT Trains' performance

We refer to Mr Christopher Tan's commentary (Making sense of SMRT Trains' losses; July 6 ).

We acknowledge his comments that SMRT trains have been running more smoothly from the start of this year, but would like to point out a number of factual inaccuracies.

Gross margin is typically used by manufacturing and retail companies. SMRT measures operating profit margins (Ebit) instead.

Since listing in Financial Year (FY) 2001 and followed by delisting till FY2018, SMRT Corporation's Ebit has not exceeded 23.5 per cent.

Staff costs for the Thomson-East Coast Line (TEL) are not captured under SMRT Trains Ltd, but under SMRT TEL Pte Ltd's accounts. Staff costs at the pre-operations stage are accounted for in the balance sheet and not in the income statement.

SMRT Trains' loss was mainly contributed by a reduction in fare revenue of about $50 million and an increase in Repairs & Maintenance costs of about $40 million.

SMRT Corporation's FY2018 financial result is in a loss position. The financial results will be filed with the Accounting and Corporate Regulatory Authority (Acra) after SMRT Corporation's annual general meeting in end-July.

And the FY2016 financial figures quoted for SMRT Corp's group operating profit should be $138.5 million, not $142.6 million.

We would also like to comment that the financial performance of SBS Transit as a legal entity reflects not only its trains business but also includes main contributions from its bus business. On the other hand, SMRT Trains' financial performance is solely attributable to its trains business.

SMRT is committed to working with stakeholders to provide safe and reliable services for our commuters.

Margaret Teo (Ms)

Vice-President

Corporate Communications

SMRT Corporation

A version of this article appeared in the print edition of The Straits Times on July 09, 2018, with the headline 'Shedding light on SMRT Trains' performance'. Print Edition | Subscribe