SINGAPORE — Local rail operator SMRT Trains announced on Wednesday (31 July) that it recorded a net loss after tax of $155 million for the financial year that ended on 31 March 2019.
The net loss after tax was nearly double the $86 million it recorded in FY2018.
According to SMRT Trains’ website, the company generated $781.3 million in total revenue, with total costs at $946.8 million.
SMRT Trains said that the losses were mainly due to an increase in operating expenses.
“This increase can be attributed to repairs and maintenance costs, staff costs (higher headcount) and electricity costs (higher tariffs and consumption),” it said in a media statement.
“We are strengthening our engineering capabilities and working hard to achieve a high rail reliability, so we can give commuters safer and more comfortable journeys.”
In FY2019, SMRT Trains’ maintenance-related expenditure accounted for 71 per cent of rail fare revenue, up from 62 per cent in the previous financial year. This means that, for every $1 collected from rail fare revenue, 71 cents went to maintenance-related expenses.
These expenses include maintenance staff costs, parts and materials costs, and depreciation of rail assets.
Higher MRT fares amid rising costs?
Transport Minister Khaw Boon Wan said in Parliament on 8 July that higher fares will be needed in the face of rising subsidies for public transport.
He noted then that increased reliability has come at “substantial expense” to both the operators and the government. However, train fares have not sufficiently increased in tandem, and rail operators are operating at a loss.
As a result, government subsidies have exceeded their “intended scope of funding”, said Khaw.
Over the next five years, the government expects to spend $4.5 billion on operating subsidies, on top of a $25 billion outlay on civil infrastructure to build and equip new lines.
SMRT Trains also announced it has appointed Tan Chian Khong as a new board director from Thursday.
Tan, who has 35 years of experience in the audit industry, will contribute through his expertise in managing financial and investment risks.