Dividends paid to SMRT and SBS shareholders could have paid for 1,000 new buses almost twice over

SBS SMRT logo

By FAILRAIL.sg

With SMRT’s latest financial results (30 April), total dividends paid by SMRT and SBS Transit have hit the $2 billion mark over the past 10 over years.

Instead of going into shareholders’ pockets, money could have paid for the 1,000 new buses (budgeted at $1.1 billion) almost twice over, without touching taxpayers’ monies.

Think about that while noting of Public Transport Council’s approval for the public transport operators to increase their faces every year and the recent approval for the fare hike of bus and train rides of 2.8%, or about 2 and 5 cents per trip since 5 April 2015.

In a posting on his Facebook page, Transport Minister Lui Tuck Yew commended the PTC for the recent increase, as it has “achieved a good balance between keeping fares affordable for Singaporeans and maintaining the viability and sustainability of our public transport system.”

How “bad” is the sustainability of the public transport system? Here’s a look at key financial numbers from SMRT and SBST annual reports since 2000:

SMRT

In every FY from 2000 to 2015, SMRT earned an operating profit in the range of $84.2 million – $197.2 million. There was never a year in which SMRT made a loss.

From FY2001 to FY2015, SMRT paid out a total dividend sum of $1.6 billion!

loyal
SMRT’s annual report in 2008

In recent years, SMRT’s return on equity plummeted from above 20% to 7.9%. Hence, to reverse this worrying trend for investors, the fare hikes are there to reward ‘loyal shareholders’ for their trouble.

How about ‘loyal commuters’, or do we even have a choice when it comes to public transport?

In FY2001, SMRT paid special dividends of $540 million to only one shareholder, Temasek Holdings. Wonder if SMRT has the financial capability to do the same for SG50?

SBS Transit

In every FY from 2000 to 2014, SBST earned an operating profit in the range of $15.5 million – $70.7 million. There was never a year in which SBST made a loss. And from FY2003 to FY2014, SBST paid out a total dividend sum of $369 million.

In recent years, SBST’s return on equity plummeted from above 20% to 3.3%.

dividend paid to SMRT SBS

Beneficiary to dividend payouts of transport operators

The Government has majority shareholdings in SMRT and SBS Transit via Temasek Holdings and ComfortDelgro. They are the greatest beneficiaries of the dividend payouts.

Still think the raise in fares is justified?

 

Sources

SMRT FY2015 Financial Results (see page 9 and 10 of Unaudited FS). SMRT paid $41 million in dividends in FY2015.