By Sharen Kaur
KUALA LUMPUR: KERETAPI Tanah Melayu Bhd (KTMB) aims to break even this year but that may be a challenge, given that its current operational cost is around RM600 million and revenues are two thirds of that.
According to chairman Datuk Nawawi Ahmad, KTMB needs revenue of RM650 million to RM700 million in order to break even.
"My intention is that by the end of this year, KMTB should be able to break even. We have three quarters left to achieve the target.
"The current focus is to grow our non-fare revenue from below five per cent to 40 per cent in the next five to 10 years.
"Most rail operators in Asia, especially in Japan, Hong Kong and Taiwan, depend on non-fare business to survive. This segment contributes 40 per cent to their yearly revenue and we are looking at the same business model.
"We are in discussion with the Transport Ministry to increase advertisement revenue. For our fibre optic business, we are getting a few million ringgit a year in revenue and there are plans to expand this business further," he said, here, recently.
KTMB has established the framework for a transformation in its bid to be the preferred transporter of goods and people.
Its primary focus will be on commuter, intercity Electric Train Services, cargo and non-fare businesses.
Nawawi said with the objective to analyse the current state of KTMB's profitability, a thorough profit and loss (P&L) analysis was carried out on the company's each business unit.
He said the commuter P&L showed that all trips between Batu Caves and Port Klang, Rawang to Sungai Gadut, and Rawang to Tanjung Malim were making losses amounting to RM82 million a year.
The intercity P&L showed that all trips for the three routes (east bound, north bound and south bound) are running at a loss amounting to RM110 million.
The cargo P&L, meanwhile, indicated that 25 out of 55 trips were making losses totalling RM36.5 million.
"We want to grow revenue by increasing ridership and cargo tonnage, raise fares and generate more income from non-fare components.
In terms of reducing expenditure, we want to eliminate cost due to delay and derailment, optimise network to ensure maximising revenue by reviewing the P&L analysis by routes and rightsizing the organisation to ensure productivity.
"The other focus would be to ensure services are safe and reliable by making sure infrastructure is properly maintained and able to meet the demand of the public," he said.
Nawawi said while cargo was profitable, he expects commuters to make profit next year upon implementing the planned strategies.
He hopes that the government will raise commuter and passenger fares by at least 50 per cent this year.
Since KTMB's corporatisation in 1992, its audited collective revenue as of December 31 2013 was RM7.4 billion.
However, during the same period, KTMB recorded collective losses amounting to RM2.5 billion.
Its operating revenue of RM137.80 million in 2013 was lower than its RM550.70 million operating cost, mainly because of low ridership, tonnage, tariff and charge rate.
Last year, KTMB recorded a revenue of RM370 million while losses were around RM80 million.
"If the government raises passenger and commuter tariff, we will be able to grow our cargo volume, KTMB is poised to break even this year with all the plans that we have put in place, including lowering operational cost," he said.
KUALA LUMPUR: KERETAPI Tanah Melayu Bhd (KTMB) aims to break even this year but that may be a challenge, given that its current operational cost is around RM600 million and revenues are two thirds of that.
According to chairman Datuk Nawawi Ahmad, KTMB needs revenue of RM650 million to RM700 million in order to break even.
"My intention is that by the end of this year, KMTB should be able to break even. We have three quarters left to achieve the target.
"The current focus is to grow our non-fare revenue from below five per cent to 40 per cent in the next five to 10 years.
"Most rail operators in Asia, especially in Japan, Hong Kong and Taiwan, depend on non-fare business to survive. This segment contributes 40 per cent to their yearly revenue and we are looking at the same business model.
"We are in discussion with the Transport Ministry to increase advertisement revenue. For our fibre optic business, we are getting a few million ringgit a year in revenue and there are plans to expand this business further," he said, here, recently.
KTMB has established the framework for a transformation in its bid to be the preferred transporter of goods and people.
Its primary focus will be on commuter, intercity Electric Train Services, cargo and non-fare businesses.
Nawawi said with the objective to analyse the current state of KTMB's profitability, a thorough profit and loss (P&L) analysis was carried out on the company's each business unit.
He said the commuter P&L showed that all trips between Batu Caves and Port Klang, Rawang to Sungai Gadut, and Rawang to Tanjung Malim were making losses amounting to RM82 million a year.
The intercity P&L showed that all trips for the three routes (east bound, north bound and south bound) are running at a loss amounting to RM110 million.
The cargo P&L, meanwhile, indicated that 25 out of 55 trips were making losses totalling RM36.5 million.
"We want to grow revenue by increasing ridership and cargo tonnage, raise fares and generate more income from non-fare components.
In terms of reducing expenditure, we want to eliminate cost due to delay and derailment, optimise network to ensure maximising revenue by reviewing the P&L analysis by routes and rightsizing the organisation to ensure productivity.
"The other focus would be to ensure services are safe and reliable by making sure infrastructure is properly maintained and able to meet the demand of the public," he said.
Nawawi said while cargo was profitable, he expects commuters to make profit next year upon implementing the planned strategies.
He hopes that the government will raise commuter and passenger fares by at least 50 per cent this year.
Since KTMB's corporatisation in 1992, its audited collective revenue as of December 31 2013 was RM7.4 billion.
However, during the same period, KTMB recorded collective losses amounting to RM2.5 billion.
Its operating revenue of RM137.80 million in 2013 was lower than its RM550.70 million operating cost, mainly because of low ridership, tonnage, tariff and charge rate.
Last year, KTMB recorded a revenue of RM370 million while losses were around RM80 million.
"If the government raises passenger and commuter tariff, we will be able to grow our cargo volume, KTMB is poised to break even this year with all the plans that we have put in place, including lowering operational cost," he said.
No comments:
Post a Comment