SMRT - 2nd April 2016
SMRT after hitting the high of 1.675 on 2nd Mar 2016 it had since continued to trend lower to touch 1.48 on 1st April 2016. This is generally rather bearish.
The current price of 1.485 is staying below the SMA lines which is generally rather negative.
Also both Macd & Rsi indicators are still pointing downwards which may be an indication that the share price may continue to head lower.
Short term wise it may continue to trend lower towards 1.415 with extension to 1.36.
I would be looking at accumulating when the price is hovering near 1.415 for a technical rebound to take the share price higher towards 1.50. Crossing over of $1.50 with good volume that may propel to drive the share price heading towards 1.60.
The company declare twice dividends annually. The dividend is about 3.25 cents which translate to about 2.2%( base on 1.485 ) .
( trade base on your own decision)
SMRT reports earnings of $36.9 million for 3Q FY2016
as Non-Rail businesses improve.
Group revenue increased 4.6% to $327.6 million in 3Q FY2016 due to broad based revenue
growth across most of the segments. Operating profit improved 46.4% to $45.4 million in 3Q
FY2016 while PATMI rose 63.5% to $36.9 million.
Fare Business
Notwithstanding a higher combined operating profit of $8.2 million recorded in 3Q FY2016
compared to 3Q FY2015, the Group’s Rail operations (Train and LRT) posted a combined loss
of $1.1 million in YTD FY2016 as the increase in operating expenses outpaced revenue growth.
Operating profit from Train operations increased by $6.5 million due to higher revenue, funding
from the Public Transport Security Committee and lower depreciation, which was partially offset
by higher staff costs and repairs and maintenance related expenditure. Despite higher revenue,
LRT operations suffered a higher operating loss of $1.5 million in 3Q FY2016 as it faced higher
operating costs associated with the addition of new trains to the fleet.
Bus operations posted an operating profit of $3.4 million in 3Q FY2016 on the back of higher
revenue, training grants, reliability incentives and lower diesel costs, partially offset by higher
staff costs, depreciation, and repairs and maintenance expenses.
Non-Fare Business
Operating profit from the Group’s Non-Fare business increased by $5.7 million in 3Q FY2016,
due largely to improved profitability of the Taxi and Rental segments.
Taxi operating profit increased to $4.8 million in 3Q FY2016 due mainly to higher taxi rental
contribution and more early retirement of taxis in 3Q FY2015. Rental operating profit increased
to $21.8 million in 3Q FY2016 on the back of higher rental revenue contribution from train
stations and bus interchanges.
OUTLOOK AND PROSPECTS
The Group remains fully committed in its efforts to further strengthen performance in rail
reliability and meet the maintenance performance standards set by the authorities. Operating
expenses will continue to increase due to intensive maintenance and renewal programmes of
the ageing network. The Group’s fare revenue will be impacted by the 1.9% fare reduction and
commencement of Downtown Line 2 from 27 December 2015.
The Group is making progress in its discussions with the authorities on the transition to a new
rail financing framework.
Bus operations results are expected to improve compared to FY2015 due mainly to higher
revenue resulting from the fare increase that took place in April 2015 and lower energy prices,
as well as productivity improvements and reliability incentives. We are in discussion with the
authorities on the contract terms for the remaining bus services beyond the license expiry in
August 2016.
The Group will continue to explore growth anchored on the strengths of its core public transport
operations and adjacent capabilities, locally and overseas.
