SMRT

(13-07-2012, 04:08 PM)palantir Wrote:

(12-07-2012, 09:36 PM)Temperament Wrote: This stock's dividend yield definitely will be reduced down the years unless we pay for the anticipating coming increase in SMRT's fare.

Management mentioned that the dividend policy of paying at least 60% of profit after tax will still remains. FY11 is about 80% paid as dividend

So have to see if this can still continue for many years

Ah!........ Papys can still pay up to 60% or 80% of profit, but the Dividend Yield may be lower and lower as the years go by.

(13-07-2012, 04:43 PM)Temperament Wrote: Ah!........ Papys can still pay up to 60% or 80% of profit, but the Dividend Yield may be lower and lower as the years go by.

due to share price increase or due to profit decrease?

(13-07-2012, 04:51 PM)wsreader Wrote:

(13-07-2012, 04:43 PM)Temperament Wrote: Ah!........ Papys can still pay up to 60% or 80% of profit, but the Dividend Yield may be lower and lower as the years go by.

due to share price increase or due to profit decrease?

Can be anything. Who knows? Remember i said maybe. So it can be the opposite of what i think. In the stock market if you think you are 100% or a genius, that's it. i am often caught by surprise both ways- For better & for worse than i think or figure, figure. If more than 50% right all the time i think i am a very happy man. Provided right on my substantial holdings.
I am still holding only 1+1/2 lots of DBS&OCBC from 2008/2009 prices. So this does not make much different in my total portfolio though it helps.
My 2 cents.

(13-07-2012, 04:51 PM)wsreader Wrote:

(13-07-2012, 04:43 PM)Temperament Wrote: Ah!........ Papys can still pay up to 60% or 80% of profit, but the Dividend Yield may be lower and lower as the years go by.

due to share price increase or due to profit decrease?

I will say due to expense increases, thus profit decreases..

(13-07-2012, 06:34 PM)CityFarmer Wrote:

(13-07-2012, 04:51 PM)wsreader Wrote:

(13-07-2012, 04:43 PM)Temperament Wrote: Ah!........ Papys can still pay up to 60% or 80% of profit, but the Dividend Yield may be lower and lower as the years go by.

due to share price increase or due to profit decrease?

I will say due to expense increases, thus profit decreases..

Sinkaporeans must always remember Papy's thinking that all Public's needs like hospital services, water & utilities etc...... So is SMRT and transport services will always be run like a business; as profitable as possible. Papy will always twist & tweak as much as the Public can bear to foot the bill and at the same time not losing the mandate to govern the people. Papy will sweeten the ground from time to time to pacify the people when it's too much for the people to bear. Like the recent GST rebate for some of the people. So how much the SMRT's dividend yield lost is due to less profit is still debatable in the long run. Don't forget PAPY is very good at "Let's do the Twist". In fact i think not in the long run but in the longer run SMRT's dividend yield will be comparable to some of the reits' yield, again. By that time i may be shareholder. Ha! Ha!

One of the on-going discussion of SMRT with LTA recently is the proposal to migrate the existing NSEWL's Licensing and Operating Agreement (LOA) to a similar LOA of DTL.

The detail of the DTL's LOA is not available (for me only?), but one of the key feature is LTA owns both operating and infrastructure assets.

If the proposal approved on NSEWL, what does it mean to SMRT?

SMRT will able to monetize the operating asset. SMRT paid S$1.2 Bils for the asset in 1998, and the remaining book value are

- rolling stock : 556 Mils
- Power supply equipment : 145 Mils
- Properties : 206 Mils (assume 80% as operating asset)

Total approx S$866 Mils will be released base on book value alone. Furthermore future depreciation expense will be greatly reduced

Any other views?

(20-07-2012, 04:56 PM)CityFarmer Wrote: One of the on-going discussion of SMRT with LTA recently is the proposal to migrate the existing NSEWL's Licensing and Operating Agreement (LOA) to a similar LOA of DTL.

The detail of the DTL's LOA is not available (for me only?), but one of the key feature is LTA owns both operating and infrastructure assets.

If the proposal approved on NSEWL, what does it mean to SMRT?

SMRT will able to monetize the operating asset. SMRT paid S$1.2 Bils for the asset in 1998, and the remaining book value are

- rolling stock : 556 Mils
- Power supply equipment : 145 Mils
- Properties : 206 Mils (assume 80% as operating asset)

Total approx S$866 Mils will be released base on book value alone. Furthermore future depreciation expense will be greatly reduced

Any other views?

There is an outstanding loan of $150million to be repaid.
But, the public will not view it favourably if the shareholders get to collect this windfall.(if there is)

The likely arrangement is that SMRT will not fund future operating assets and the current assets will be depreciated and take out of service once they reach their end of useful life.

Hi,

If I recall reading somewhere with this new framework the license fee the operator pays is substantially higher . Simply because they are just running the stations.

(20-07-2012, 05:29 PM)yeokiwi Wrote:

(20-07-2012, 04:56 PM)CityFarmer Wrote: One of the on-going discussion of SMRT with LTA recently is the proposal to migrate the existing NSEWL's Licensing and Operating Agreement (LOA) to a similar LOA of DTL.

The detail of the DTL's LOA is not available (for me only?), but one of the key feature is LTA owns both operating and infrastructure assets.

If the proposal approved on NSEWL, what does it mean to SMRT?

SMRT will able to monetize the operating asset. SMRT paid S$1.2 Bils for the asset in 1998, and the remaining book value are

- rolling stock : 556 Mils
- Power supply equipment : 145 Mils
- Properties : 206 Mils (assume 80% as operating asset)

Total approx S$866 Mils will be released base on book value alone. Furthermore future depreciation expense will be greatly reduced

Any other views?

There is an outstanding loan of $150million to be repaid.
But, the public will not view it favourably if the shareholders get to collect this windfall.(if there is)

The likely arrangement is that SMRT will not fund future operating assets and the current assets will be depreciated and take out of service once they reach their end of useful life.

It make sense to continue till current operating asset value depreciate to zero, otherwise it already a headache to complete the accounting and valuation.

If similar DTL's LOA applies to CCL, then SMRT will able to free up substantial capital needs. A reserve fund account was allocated to purchase the operating asset in 2019. Estimated approx S$100 Mils in the reserve fund now.

if the cost to SMRT lower by anyhow, the fare would adjust accordingly.

do you see the MRT fare dropping if the lease framework changes?

if not, then there is somewhere else the money is going to flow to.