KUALA LUMPUR: Rising ridership at its urban rail networks and an ongoing cost-optimisation programme are contributing to Prasarana Malaysia Bhd’s improved operating financial health.

The Finance Ministry-owned transport company is targeting to reduce its loss before interest, tax, depreciation and amortisation (LBITDA) for the current financial year ending Dec 31, 2019 (FY19) to a four-year low.

Revenue is expected to climb to a five-year high.

Speaking during a media briefing, Prasarana president and group CEO Datuk Mohamed Hazlan Mohamed Hussain said the company was on track to record a positive earnings before interest, tax, depreciation and amortisation (EBITDA) by FY21.

He added that Prasarana has been forecast to record a total revenue in the range of RM800mil to RM900mil in FY19 – the highest in five years.

“We have reduced our costs by RM278.8mil as of June 30, 2019, exceeding the target of 10% or RM238.5mil as set by the group earlier.

“For the first six months of 2019, the group has also significantly improved its financial books, as we made a steady upward trend in revenue and significant improvement in our EBITDA, ” said Mohamed Hazlan, who was appointed to lead Prasarana on Sept 3 last year.

Prasarana’s LBITDA hit a record high in FY18. However, the company did not provide the figures.

Prasarana owns and operates the country’s urban rail service that includes three LRT networks and the KL Monorail, in addition to operating the MRT line. It also owns and operates the stage bus services in Kuala Lumpur, Selangor, Penang, Perak and Pahang.

In the January-June 2019 period, the total ridership of Prasarana’s rail service rose 10% year-on-year (y-o-y) to 113 million. Prasarana’s bus service, however, posted a decline in total ridership by 10% y-o-y to 81 million passengers against the corresponding period.

Meanwhile, Rapid Ferry’s total number of passengers for the first six months of 2019 was 700, 000 passengers – an increase of 233% as compared to the same period last year.

On the ridership decline of Prasarana’s bus service, Mohamed Hazlan attributed it to the introduction of the My100 unlimited travel pass by the Pakatan Harapan government.

“With the My100, commuters’ mode of transportation changed because it’s cheaper to go by LRT and MRT than the bus. Yes, it cannibalises some of our bus (ridership), but the ridership for rail is 750, 000 per day.

“An increase of 10% is 75, 000. But for the ridership of bus services, it is 450, 000. A reduction of 10% is 45, 000. Net-net, there is still an increase for us, ” he said.

When asked to confirm speculation that Prasarana had incurred a RM30bil impairment in FY18, Mohamed Hazlan did not answer the question directly.

“Impairment is basically as per MFRS (Malaysian Financial Reporting Standard) 135 and 136. That is normal for accounting.

“We have to look forward and are now doing better in terms of operations, ” he said, although he avoided stating the value of the impairment made in FY18.