SMRT reported that the after-tax profits it accumulated in 2017 dropped by a whopping 68 per cent from S$81 million in 2016 to just S$26 million in 2017. The transport operator also revealed that there was a fall in revenue of S$791 million for 2017 compared to S$811 million in 2016.
In a group review report released on their website today, SMRT attributed the fall in revenue to “lower average fare”.
SMRT’s earnings before interest and tax fell from S$97 million in 2016 to S$27 million in FY2017. The group cited “higher maintenance-related expenses for the ageing network” and “preparation for operating Tuas West Extension” as the reason for the drop in earnings.
Data also showed an increase in average weekday ridership from 756 million in 2016 to 768 million in 2017 while the total distance travelled by passengers dropped from 8,322 million kilometres in 2016 to 8,271 million kilometres in 2017.
Data showing the plunge in revenue and profits comes after the Public Transport Council (PTC) hinted last week that public transport fares may be hiked. Asserting that a widening gap between cost and fares is not sustainable, the council announced that it will be revising its fare formula to “keep pace with changes in the public transport industry’s cost structure”.
The PTC’s announcement followed Transport Minister Khaw Boon Wan’s recent announcement in Parliament that the current public transport fare formula is “inadequate” and that the Public Transport Council (PTC) is reviewing it to better track “total costs”.
Khaw had opined that local public transport fares are presently affordable and that the Government needs to ensure that the transport network remains sustainable: “We must be careful that (fares) are not priced too cheaply, as maintaining a high-quality transport system requires resources. Cheap fares are popular, but they are not sustainable.”
On the PTC fare review, Khaw said: “I am confident that they can work out a fair and sustainable arrangement. Please support the PTC when they make their recommendations.”