SMRT’s net profit plummets 22.9% to $15.5 million in 1Q FY2017

Blame it on the rail business’ glaring $9.4 million loss.

The multi-modal public transport operator endured a higher rail operations loss for 1Q FY2017 as compared to the $5.3 million loss for the same period last year.

In a press release, SMRT said the said loss was "a result of lower revenue due to lower average fare resulting from the 1.9% fare reduction effected in December 2015 and cannibalisation impact of Downtown Line 2 operations."

SMRT also revealed escalated operating expenses of $311.5 million due to staffing and maintenance costs.

According to SMRT, the staff costs increased due to a “higher headcount engaged in Rail and Bus operations to support a larger train and bus fleet as well as to meet heightened operational requirements."

The loss may also be attributed to the company’s efforts to rigorously maintain ageing train operations, heightening the expenses for repairs and maintenance.

“In tandem with our commitment to enhance rail reliability, the Group’s Rail maintenance-related expenditure3 in 1Q FY2017 accounted for 49% of Rail fare revenue,” SMRT said in its report.