SMRT posted a S$25.7 million profit in its second quarter result for Financial Year 2016. According to the Temasek Holdings-owned listed corporation, its bus operations made a S$2.6 million profit while its train operations made a S$4 million loss. The group turned profitable after its China subsidiary Shenzhen Zona Transportation Group made huge profits outperforming the losses from Singapore’s public transport.
Although SMRT blamed rising costs of maintenance for the losses, the actual explanation for the losses from public train operations was not revealed. The actual losses, although unmentioned, is most probably due to the number of train breakdowns including the massive one that took out the island-wide North-South and East-West lines in July.
From the profits of its bus operations, it is clear that public transport fares have a comfortable margin for SMRT. Oil prices have also fallen over 25% since April and should have given SMRT better breathing space. However, SMRT’s maintenance regime remained inefficient and raked a 7.1% increase in operating expenses to a record high of S$313.6 million since inception.
SMRT CEO Desmond Kuek was revealed to have drawn at least S$2.2 million a year in the previous financial report, ranking him as the most well paid CEO in the public transport industry.