SMRT Corporation Corporation Ltd’s Latest Earnings: What Investors Should Know

SMRT Corporation Ltd (SGX: S53) reported in its second-quarter earnings yesterday. The reporting period was for 1 July 2015 to 30 September 2015.

The business of SMRT Corporation can be divided into seven different segments – Train operations, Light Rail Transit (LRT) operations, Bus operations, Taxi Operations, Rental, Advertising, and Engineering and Others.

You can learn more about the transport giant here or catch up with the prior quarter’s earnings here .

Financial highlights

Here’s a rundown on the financial figures for SMRT Corporation:

  1. Quarterly revenue for SMRT Corporation rose by 4.7% to $328.8 million on a year on year comparison. 
  2. Net profit attributable to shareholders inched up by 1.9% year on year to $25.7 million for the reporting quarter.
  3. Earnings per share (EPS) increased from 1.66 cents per share in the second quarter for financial year ended 31 March 2015 (FY15) to 1.68 cents per share in the reporting quarter.   
  4. For the second quarter of FY16, cashflow from operations was $75.5 million with capital expenditure clocking in at $62.1 million. This puts SMRT Corporation in positive free cash flow territory to the tune of $13.4 million.  
  5. As of 30 September 2015, the group had $136.6 million in cash and equivalents and a sizable $836 million in debt.

Overall, both revenue and profit for SMRT Corporation inched up for the quarter. The transport giant also reported positive free cash flow. On the other hand, the company still holds a significant amount of debt.

The board of directors proposed an interim dividend of 1.5 cents per ordinary share, unchanged from a year ago.

Operational Highlights

SMRT Corporation’s topline was mostly up across the board.

The company’s all important rail operations (Train and LRT) brought in $172 million for the quarter, up 2.7% from a year before. However, operating profit for rail operations lagged with $4 million in losses.

Meanwhile, its bus operations recorded sales of $63.2 million, increasing 4.1% year on year. Operating profit for the bus operations turned in $2.6 million for the reporting quarter, a turnaround from the $1.4 million in losses a year ago.

The strongest topline growth came from its non-fare business (Taxi, Rental, Advertising, Engineering and Others). The non-fare segment clocked in sales growth of 9% year on year. To add to that, operating profit rose by a strong 21.7% year on year.  

SMRT Corporation’s Chief Executive Officer, Mr Desmond Kuek, added the statement below:

We are fully committed to strengthening the level of service and reliability of our public transport services and meeting the network’s higher capacity needs and operational requirements. We remain focused on our multi-year programmes to renew and upgrade the ageing rail network and will continue to pursue business growth in line with our core competencies.

Forward looking, the management team sees continuing challenges in the rail operating landscape. However, the bus operations could improve due to higher revenue and lower energy prices.

Foolish summary

At its closing price yesterday of $1.49, SMRT Corporation traded at around 25 times trailing earnings with a dividend yield of around 2.2%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.