Rail operator Singapore Mass Rapid Transit (SMRT) had earlier reported a drastic 67.9 per cent plunge in after-tax profits after posting earnings of a mere S$26 million for 2017 and saw a S$55 million drop in after-tax profits from the previous year’s S$81 million.
In a group report, the company said that it had also recorded a decrease in total revenue of S$791 million for 2017, compared to the S$811 million in 2016, citing lower average fares as the reason for the fall in revenue.
The report stated that its earnings before interest and tax for the financial year of 2017 was recorded as S$27 million, a decrease from S$97 million in the previous year.
It also said that the operating expenses have increased from S$734 million in 2016 up to S$785 million in 2017.
According to the transport operator, the rise in operating cost was due to higher maintenance-related expenses for the ageing network and preparation for operating Tuas West Extension.
However, many disagree with what the report by SMRT implied in regards to its fall in revenue.
Conrad Lee wrote, “Revenues fell because of frequent breakdowns due to lack of proper maintenance in the past. Operating costs increased because SMRT need to provide shuttle buses when trains breakdown because of lack of proper maintenance. Also a lot of catch up work needed to be done. If SMRT had done their proper maintenance work in 2016 and before, there wouldn’t be breakdowns due to flooding, track fault, signal fault, power fault, human fault, culture fault, etc. This would have ensured consistent profits.”
Willy Kou wrote, “Revenues dropped because of poor management and poor strategic decision . Don’t go increase our fare because you need to maintain that big fat bonus for your useless paper general.”
Kamy Yeow wrote, “SMRT!!! You forgot your breakdowns also cause passenger loose time and time is money. We passengers collectively loose more than your $55 millions lost in profit.”
Des Soo wrote, “The articles shld read “Smrt post S$26million profits in 2017.”
What’s wrong with profits being used for upgrade and maintenance-related expenses?? So what’s wrong with less profit?? Total revenue still relatively unchanged (791 vs 811). This one-time spike in expenses was whose fault?”
James Toh wrote, “Don’t lament a drop in profit. Sing about sterling services. Millions in Singapore depend on it to get to wherever on time. Providing a public service should not always talk about profit. Talk about service that even other providers talk about.”
Clarence Chee wrote, “They had amazing profits when they skimped on maintenance but didn’t reduce fares. Why should we pay more now that they have reduced profits?”
Desmond Di Nai Rong wrote, “My tips to the heli-inserted general who have no experience in private sector:
1. Times like this, you use your reserves accumulated from your previous years earnings, unless you have ni reserves during the good years.
2. Cost savings and claw back from your vendors who fail to perform according to their obligations. E.g. Thales.
3. Revenue drop do not equates to no revenue. Just don’t expect fat bonus.”
Gary Han wrote, “SMRT should have a breakdown of all the cost they spend on maintenance from Saw as CEO to Desmond. Stop using one sweeping statement due to high maintenance cost! Lacking maintenance from a start will start to spiral down till u find the root cause. Have they? Stop this excuse just to increase fares.”
Jasper Chong wrote, “Next they will be asking commuter to pay more to fund for repairs and expansion, just like the ridiculous extra airport tax.”
Saleeh Abdul Majid wrote, “Why not have different fares for locals and foreigners? The locals cannot be paying for the infrastructure & maintenance and others reap the benefits.”
Lim Foong Fee wrote, “There is still a 791 MILLION revenue. It’s not losing money. Just not earning more. It’s not suppose to be earning much more. It’s no longer listed so it should not just be for profit. 791 million should be good enough profit.”
Colvis Tan wrote, “A decade ago you all should have done the upgrading so u can’t make public to pay for your incompetence that lead to higher cost.”
Paul McGhee wrote, “The ‘aging network’ – not so by first world standards – just needs competent managers/minister and the proper organised maintenance! Time to make serious changes at the top?”
Cheng TI Leonard wrote, “In short what we, the daily commuters who pay income tax, have to continue to subsidise poor management so that SMRT continues to make bumper profits. What a great way to keep the gravy train going!”
Colvis Tan wrote, “Dont believe it’s just $26 million profits only. Accounting might be wrong, it should be higher. As for upgrading, a decade ago should have started so cost high is not passenger fault or getting passenger to pay for your incompetence.”
OC Yeo wrote, “Don’t lose sight of the more critical point. It is still profit. The public transport system ought not be deemed a financial investment to maximise returns.”
Andrew Tan wrote, “TMD. I really wonder what the hell our agencies are doing when awarding public tenders. Implement some systems that they did not study properly and give problem many many. Transport like that housing also like that. Can the agencies please at least study the systems strength and weaknesses and preventive and remedial solutions properly first. Dont just anyhow award to vendors that can wayang or good friend to big bosses or just throw to consultants and contractors to handle something nobody understands. Waste peoples time and money. Then get promoted for innovative ideas and implementation some more. Jeopardise the downstream operations and work flows. Sometimes these office officers too keen to show results end up implement too rashly.”
Ravin Raj wrote, “Okie Singaporeans, got the hint? Let’s be prepared for a fee hike with lots of so called Valid explanations by the MIWS and not forgetting a so called “Survey” where Singaporeans are quite happy and prepared for the fee hike.”
Riduwan Matni wrote, “Is article meant to solicit sympathy?
For something that they should have done years ago yet almost completely neglected.”
Charlermcah Chai wrote, “This reflects the decisions of the past on system maintenance/upgrades and dividend yield. I just hope the consequences of decisions of the shareholders and the management will not be paid for by the customers.”
Wee Kiat Lee wrote, “Whose problem is it? The company ignored the maintenance for more than a decade and of course have to pay the price but need to see how to crawl back from the previous management and the boards.”
Shaun Valentino wrote, “Making lesser profit is not a loss in the case of SMRT. They are meant to provide transportation. Not make millions out of having people stuck in MRT train cabins.”