SMRT

[weijian]

hi Kopicat,
After repaying 100mil bonds in Dec2011, it should indeed be at least raising 150mil, to cover higher CAPEX in FY2012 (9M2012 accrued to 170mil, compared to FY2011/2010 at ~100mil yearly).
I suspect it will be retail bonds but in current environment, the financing rates should be lower than the 3.27% annum of bonds it just redeemed in Dec2011 (it's outstanding 150mil bond issue due Oct2014 has a coupon rate of 2.42%)

Other flags:
(1) 2Q and 3Q (current) press release states that CL ridership is 300k (breakeven at 350k). Does it imply that ridership has remained stagnant for last 3 months, despite stages 4/5 opening on Oct 8th 2011?

(2) It needs to use ~105mil cash to maintain 6.75cts payout to match to 2011/2010's dividend, for FY2012. It's cash hoard is currently at 180mil. I predict dividends will be lower this time around.

(vested)

[Temperament]

Hi weijian,
i agree. i sold @$1.745. i am waiting to buy at a lower price.

[Ben]

Yes, me too alighted the trains at 1.74 in January. I am still confident that the long term prospect of SMRT is bright, but the near term headwinds is too strong. Cost is definitely going to increase significantly in the next few quarters. The company also have yet to find a CEO. There are too many uncertainties now.

In comparison, Comfort Delgro looks much more appealing to me now.

[freedom]

Comfort Delgro, the dividend is not as good as SMRT

[Ben]

That is because their dividends payout ratio is much lower than SMRT, and they are retaining cash for overseas expansion. They are already the second largest transport operator in the world. At some point, expansion will slow down, and maybe dividends payment will increase.

[sgd]

are you guys forgetting the political aspect. The disruption problem may have appear to have gone but trains are still overloaded, this will be a sore point with public and voters if not solved as I remember this was one of the findings in the aftermath of recent election. This is going to put preassure on whoever will helm smrt next.

The way I see it the current infrastructure cannot solve overcrowding issue without throwing huge money at the problem. If that happens capex will go up.

[KopiKat]

are you guys forgetting the political aspect. The disruption problem may have appear to have gone but trains are still overloaded, this will be a sore point with public and voters if not solved as I remember this was one of the findings in the aftermath of recent election. This is going to put preassure on whoever will helm smrt next.

The way I see it the current infrastructure cannot solve overcrowding issue without throwing huge money at the problem. If that happens capex will go up.

In today's SGX Annc, extracts,

SMRT invests $195 million to replace signaling system on North-South East-West Lines
1. SMRT is investing $195 million to replace the signaling system on the North-South East-West (NSEW) Lines. The project, which will be completed in phases from 2016, will make it possible for trains to run at an improved frequency of 100 seconds, down from 120 seconds today, reducing waiting time for commuters.

.
.

[weijian]

It looks like LTA is paying the bill for the new trains for NEL/CL and Tuas West Extension, but SMRT has to pay for its own trains and signalling system at its NSEW lines...

More trains for North East and Circle lines

SINGAPORE - The Land Transport Authority (LTA) has awarded contracts to purchase more trains for the North East Line (NEL) and Circle Line (CCL), to increase rail capacity in the coming years.

The NEL will receive 18 new trains - instead of 12 as previously announced - progressively from 2015. This will increase the NEL's peak capacity by about 70 per cent, LTA said in an announcement today.

The peak capacity of the CCL will also increase by about 40 per cent with 16 new trains added progressively from 2015.

The contracts for the procurement of the additional NEL and CCL trains were awarded to Alstom Transport S.A / Alstom Transport (S) Pte Ltd consortium at a value of S$234.9 million and $134 million respectively.

The re-signalling of the NSEWL is also on track for completion in phases from 2016, following SMRT's award of the contract to Thales Solutions Asia Pte Ltd at a value of $195 million.

LTA has also awarded the contract for the signalling of the Tuas West Extension at $40.3 million. The upgrade of the signalling system will allow trains to run at intervals of 100 seconds at peak periods, compared to the existing intervals of 120 seconds.

This would translate to shorter waiting times for commuters and a potential 20 per cent improvement to the existing capacity.

adrianl@sph.com.sg

[sgd]

it's not only just about getting more trains and signalling systems.

if you look at overseas metro systems like in tokyo, typically there are about 8 to 12 cars or carriages in a single train because their train stations are big enough to accomodate that kind of length.

In our the transit system we have there are 6 cars to 1 train. The solution to ease the congestion logically is to add more cars or carriages to each train to allow for more passengers but we can't because the train stations are too small. Additional capacity or growth was never cater for in the initial design of the station so to work around they tried increasing the frequency and that turned out badly creating all sorts of problems.

There are now about 90 train stations all over Singapore assuming they have to rebuild or upgrade each station imagine how much money they going to have to throw.

So you see why ceo have to resign not because of public outcry but because there's no quick fix or painless way out for this.

congestion problem not fixed government will not be happy
capex goes up shareholders will not be happy
fares in turn will go up later public will not be be happy

so whatever you do someone will not be happy easiest way out is to resign lor at least leave with a good record that company has been profitable for many years let somebody else come in to be the blaming boy and run it red.

[Jon-san]

it's not only just about getting more trains and signalling systems.

if you look at overseas metro systems like in tokyo, typically there are about 8 to 12 cars or carriages in a single train because their train stations are big enough to accomodate that kind of length.

In our the transit system we have there are 6 cars to 1 train. The solution to ease the congestion logically is to add more cars or carriages to each train to allow for more passengers but we can't because the train stations are too small. Additional capacity or growth was never cater for in the initial design of the station so to work around they tried increasing the frequency and that turned out badly creating all sorts of problems.

There are now about 90 train stations all over Singapore assuming they have to rebuild or upgrade each station imagine how much money they going to have to throw.

So you see why ceo have to resign not because of public outcry but because there's no quick fix or painless way out for this.

congestion problem not fixed government will not be happy
capex goes up shareholders will not be happy
fares in turn will go up later public will not be be happy

so whatever you do someone will not be happy easiest way out is to resign lor at least leave with a good record that company has been profitable for many years let somebody else come in to be the blaming boy and run it red.

Personally, I feel, it's all about doing the proper and right maintenance procedures at the right time, no short cuts, quick-fix measures. After all, what is SMRT but a transport service provider first and foremost? The one thing and most inportant thing they need to provide is a good transport service, not retail malls and cafes and eateries. Get the transport service right first, get it stable, THEN move on to other things.