KTMB president raises net profit target to RM1m

By Sharen Kaur (Published in NST on October 9 2009)

THE new chief of Keretapi Tanah Melayu Bhd (KTMB) has raised the national railway company's net profit target this year to RM1 million, much higher than his predecessor's aim of just RM1.

President Dr Aminuddin Adnan, who started on August 1 this year, felt that the target could be met after a restructuring of KTMB's government loans and streamlining of operations.

KTMB expects capacity to increase by a quarter from next month, helped by its revamped commuter train schedule, he said in an interview with Business Times in Kuala Lumpur yesterday.

It will now run more trains in high-density sectors, increasing its current ridership of 100,000 a day by 10 per cent.

"We have a new organisation chart. We are streamlining our strategic business units and will reorganise KTMB to be more efficient in its service.

"I hope KTMB can deliver its results for better services, connectivity, collecting higher revenue and making money," Aminuddin said.

KTMB's previous managing director, Datuk Abd Radzak Abd Malek, who was in charge for less than a year after being terminated by the government in July, was targeting a RM1 net profit on revenue of RM400 million this year.

He wanted to improve business by cutting operating costs by 30 per cent.
He was also expecting RM200 million from the freight business, RM100 million from its KTM Komuter service and RM100 million from intercity rail service, property investment and advertisements.

The RM1 million net profit target by Aminuddin would be KTMB's first earnings in 14 years.

KTMB has been bleeding red ink since it was corporatised in 1992 due to high operating costs.

Nevertheless, it did make a net profit of RM9 million to RM15 million from 1993 to 1995, before falling into the red again in the following years.

In 2007, the group posted a net loss of RM116.1 million on revenue of RM349.2 million.

It is learnt that for 2008, KTMB posted an unaudited loss of around RM150 million on lower revenue.

KTMB is still suffering from high operating costs of around RM200 million a year despite efforts to lower expenditure by cutting manpower and stopping money-losing operations.

Aminuddin said KTMB was banking on new business from April next year, after taking delivery of the six-car electric train sets (ETS) from Korea.

The government had ordered five ETS two years ago for some RM250 million from Japan's Marubeni to service the Ipoh-Rawang double-tracks.

The first set will be delivered by next month, and the rest by February next year.