SRT aims to top Bt20 bn in EBITDA under 10-year turnaround

Corporate January 19, 2018 01:00


THE State Railway of Thailand (SRT) will today propose a 10-year rehabilitation plan to the State Enterprise Committee, targeting a turnaround to more than Bt20 billion in earnings before interest, taxes, depreciation and amortisation (EBITDA) by 2027.

According to an SRT source, the rehabilitation plan expects to record more than Bt20 billion in EBITDA in 2027, compared to last year’s EBITDA loss of Bt5.7 billion, and a net loss of Bt8.8 billion in 2027, compared with last year’s net loss of Bt17 billion.

SRT’s EBITDA is forecast to go into a positive territory in 2020 due likely to a jump in growth in income from asset management and better control of expenses.

The agency is establishing an asset management subsidiary, which will have the flexibility of a private firm under the management of specialists. It is expected to help boost SRT’s commercial income to expand to Bt14-Bt15 billion in 2027 from last year’s Bt2.5 billion.

The main income is forecast to come from big plots of land, which have not yet been opened for bids, in areas including Bang Sue, Kilometre 11 and Makkasan.

Simultaneously, the SRT may have to adjust the management of its 5,000-6,000 lease contracts.

Transport income target

The SRT also plans to raise its transport income by 300 per cent to Bt24 billion in 2027, from Bt5.8 billion last year, due largely to the state investment in rail systems, such as double-track networks, while its income structure will also be changed.

Last year, about 64 per cent of total transport income came from passenger transport and 36 per cent from freight.

In 2027, income from passengers is estimated to contribute 58 per cent of total transport income and that from freight is projected at 41 per cent.

Meanwhile, the SRT will purchase 78 locomotives, lease 50 locomotives for the double-track railways, procure 900 diesel multiple units and 500 buses worth a combined Bt100 billion. The agency will find its own budget itself and make some borrowings to finance this investment.

“The SRT plans to receive all locomotives within 2021 and diesel multiple units and buses during 2022-2024,” the source said.

In regard to expenses under the rehabilitation plan, the agency is projected to see higher costs in 2027 but at a lower rate than the expected increase in income.

The expense for signalling systems and track maintenance is expected to surge by 70 per cent to Bt3.9 billion in 2027 from Bt2.3 billion last year, while locomotive repair costs are expected to rise to Bt4.4 billion from Bt3.8 billion. Operating expenses are expected to increase to Bt9 billion from Bt7 billion.

Interest expense is forecast to soar to Bt15 billion in 2027 from Bt3 billion last year due to an estimated increase in accumulated debts following a rise in investments. The SRT has accumulated debts of Bt120 billion.

The agency is amending its regulations and is in discussions with related agencies to increase its workforce to cope with the increased operations. The SRT’s workforce totals 10,000 with a plan to increase that to 16,000. From 2020-2021 onwards, the agency needs large numbers of engineers and technicians to be trained for the double-track railways.


Most view