Bangkok's cramped Skytrain sees expansion tripling profits

(Post Today photo)

The operator of Bangkok’s Skytrain anticipates a tripling in profit over five years as the network expands and commuters flee traffic jams.

BTS Group Holdings Plc predicts about 6 billion baht of net income in 2022, up from 2 billion baht last year, Chief Executive Officer Kavin Kanjanapas said. Roughly two-thirds will come from the mass-transit business as new track takes daily ridership to some 2.5 million passengers from 700,000 currently, he said.

“Thailand is following the path of other big cities like Hong Kong and Tokyo, with mass transit becoming much more important for commuting,” Mr Kavin, 43, said in an interview Thursday in Bangkok.

BTS Group is extending the elevated mass-transit rail network further across Bangkok as Thailand’s military government tries to bolster the nation’s economy by upgrading infrastructure. The firm and its partners are also set to compete for a $6.4 billion high-speed rail project to link three international airports, with bidding due later this year, Mr Kavin said.

“We’re preparing all of our resources to participate in most major transit projects that the government will open for bidding,” he said.

(Post Today photo)

While the SkyTrain’s route length across Bangkok will climb to 49 kilometres by March next year from about 38km presently, one major challenge is overcrowding, especially in peak hours, with commuters jammed into carriages and sometimes unable to find room to board trains.

"Crowding is to be expected during peak hours, just as in other big cities like Singapore and Hong Kong," Mr Kavin said. "After peak hours, our train capacity can handle the number of passengers. We’re confident the existing numbers of trains are sufficient to meet demand."

Mr Kavin said BTS Group’s media unit, VGI Global Media Pcl, which provides advertising services on the train network, will also contribute to earnings growth.

"For some investors, BTS Group is a prime bet for Thailand’s aggressive plan for mass-transit development,” said Raenoo Bhandasukdi, an analyst at KT Zmico Securities Co in Bangkok.

The holding company’s net income increased 90% to 888.5 million baht in October through December from a year earlier. The shares have climbed 4% this year, compared with a 2% rise in the benchmark SET Index. They trade at 39 times blended forward 12-month earnings, less than the five-year average of 44 times.

BTS Group is the sole operator of the almost two-decade-old SkyTrain system and owns a third of the BTS Rail Mass Transit Growth Infrastructure Fund, to which it sold the rights for future SkyTrain revenue in 2013. The group also has interests in property.

(Video YouTube/Barth's Channel)