Smrt Aaa Analysis

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Ngee Ann Polytechnic
Accounting Applications & Analysis

Done by: TF03
Lee Jun Ze S10083916G
Archie Sanchez S10085011A
Hafizuddin Bin Mohdar S10085044G
David Hartonto S10092579F
Table of Content
Page
1.Background4

2.Company Profile
2.1Railway Operation5
2.2Circle Line5
2.3Taxi Operation 6
2.4Bus Operation 6
2.5Financial Highlights7
3.SWOT
3.1Strengths7
3.2 Weaknesses7
3.3Opportunities7
3.4Threats7
4.Financial Ratios (Summary)8
4.1Definitions9
4.2Analysis9
5.Factors – Profitability & Sustainability10
6.Assumptions & Limitations10
7.Recommendation10
8.Appendixes11
9.References26
1.Background
In this report, we will be presenting the analysis we have done for SMRT Corporation Ltd (SMRT), a leader in Singapore as a multi-modal public transport operator. 2.Company Profile

Established in 1987, SMRT Corporation Ltd was listed on the Singapore Exchange on 26 July 2000, SMRT has market capitalizations of more than $2.5 billion backed by total assets of $1.4 billion. A leader in Singapore as a multi-modal public transport operator, it is also a transport engineering and service solutions provider. The corporate structure is as follows:

SMRT is an investment holding company and through its subsidiaries, SMRT operates in six segments: 1. Rail Operations,
2. Taxi Operations,
3. Bus Operations,
4. Rental,
5. Advertising,
6. Engineering and other services.

2.1Railway operation
SMRT operates the first mass rapid transit (MRT) system in Singapore. SMRT also operates Singapore’s first fully automated light rapid transit (LRT) system – the Bukit Panjang LRT system.

2.2The Circle Line

The Circle Line is coloured orange on the Singapore map

The Circle Line (CCL) is a fully underground orbital line, linking all MRT lines leading to the city. We believe that the CCL will bring a sturdy increment in SMRT’s net profit.

2.3Taxis operations
The bus and charter hire services that SMRT provides for have daily ridership of 730,000 passengers.

2.4Bus operation
SMRT currently has a fleet of 861 buses running 83 routes from West to North and the rest of the Singapore. Apart from the daily bus services provided, SMRT Buses also operates Singapore's first night service, the SMRT NightRider.

2.5Financial Highlights (Appendix A)
For the past 3 years, according to the financial highlights we believe that there will be a stable growth in revenue for the next 2 years, as there has been steady growth in the past 3 years as seen from the recent financial highlights.

There has also been positive free cash flow for the past 3 years, with the exception of the 2nd quarter of the fiscal year 2011. This could be due to funds being tied up in the construction to complete the final phrase of the Circle Line.

3.Strengths, Weakness, Opportunities and Threats (SWOT)

Based on our research on SMRT, we did a SWOT analysis of the company.

3.1Strengths
1. Proven track record
2. Main operator of Singapore's public transport backbone network, MRT system

3.2Weaknesses
1. Fares are regulated by PTC, beyond SMRT's control
2. Operations and services subject to Licensing and Operating Agreement by LTA 3. Subject to fluctuation in energy costs

3.3Opportunities
1. Doubling of Rapid Transport System by 2020 services
2. Various initiatives by Singapore government to promote public transport 3. Expansion of transport and engineering services

3.4Threats
1. Deregulation and competitive bidding of public transport services 2. Affected by potential security, safety and disease outbreak risks

4.Financial Ratios (Appendix B)
The purpose of the ratios is to allow stakeholders of the firm to see its...
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