This article first appeared in The Edge Financial Daily on August 20, 2019 - August 26, 2019

KUALA LUMPUR: Prasarana Malaysia Bhd is on track to deliver an annual revenue of between RM800 million and RM900 million in its financial year ending Dec 31, 2019 (FY19), while narrowing losses to achieve positive earnings before interest, taxes, depreciation and amortisation (Ebitda) by 2021.

Speaking at a press conference yesterday, its president and group chief executive officer Datuk Mohamed Hazlan Mohamed Hussain pointed out that the group has so far halved losses incurred in the past year.

According to Mohamed Hazlan, who assumed the role last September, Prasarana’s costs have been “well contained” and ridership figures are showing growth.

“Over the [past] five years, Ebitda has never increased but in 2019, it will increase sharply... As far as financials are concerned, we are under control and we are well on the way of making Ebitda positive by 2021.

“For the first six months of 2019, the group has also significantly improved our financial books as we made steady upward trend in revenue and significant improvement in our Ebitda,” said Mohamed Hazlan.

In the first half of 2019 (1H19), the state-owned public transport operator achieved a cost reduction of RM248.7 million, exceeding its target of RM208.4 million as it benefited from initiatives, including optimisation of spare parts maintenance, route and electricity use.

In terms of ridership, Rapid Rail grew 10% to 112.7 million in 1H19, from 102.5 million in the same period a year ago.

Rapid Bus, meanwhile, saw a 10% year-on-year decline to 81.3 million, from 90.8 million previously, which according to the group was due to the migration of riders to its rail services as a result of the introduction of the monthly unlimited public transportation pass for the Klang Valley, My100.

Overall, the group currently manages an average daily ridership of 1.2 million, with more than 740,000 passengers using the rail services every day.

Asked whether Prasarana’s FY18 impairments were in excess of RM30 billion as recently reported in The Edge Malaysia weekly, Mohamed Hazlan declined to comment. A check on the Companies Commission of Malaysia, showed that Prasarana has yet to file its financial accounts for FY18.

“Impairment is part of accounting policies. So we need to move forward and look at what we are addressing now. We are addressing operational efficiencies of the group and this has proven to be better than the previous years’, for the past five years,” he said.