Chow Chung Kong, chief executive officer of MTR Corp, gives the thumb up at the company's 2009 annual results news conference in Hong Kong yesterday. The company said it will recognize profit from the Le Prestige development in the first half of 2010 and it will book profit from Tai Wai Residences in 2011. Timothy O'Rourke / Bloomberg News

But decline in property sales drags development profit down 24%, to HK$3.55b

Hong Kong railway operator MTR Corporation, which is also a major property developer, said it will launch 3,800 new units in four residential projects this year.

The news came as the company reported a 16.4 percent increase in its 2009 net earnings, driven by gains in property revaluations.

For the twelve months ended December 31 last year, net profits of MTR surged to HK$9.64 billion.

However, dragged down by the decline in property sales, MTR's property development profit fell 24 percent to HK$3.55 billion.

Property development profit in 2009 mainly came from the sales in The Harbourside at Kowloon Station, The Lake Silver in Ma On Shan, The Capitol in Tseung Kwan O and The Palazzo in Fotan.

Excluding investment properties revaluation, underlying net profit fell 10.8 percent to HK$7.30 billion, due to the drop in property sales.

Thomas Ho, property director of MTR Corporation, said the company will, this year, sell 3,800 units from four residential sites, including the first two phases of Festival City in Tai Wai and La Mer in Tung Chung. MTR, meanwhile, has more than 1,000 completed units remaining unsold.

"We plan to tender residential projects above Nam Cheong Station and parts of Lohas Park in the next six months, which can provide around 7,000 units in the next three to four years after completion," Ho told reporters yesterday.

He added that the company is planning to supply 5,000 to 6,000 new flats every year.

MTR, 76 percent owned by the Hong Kong SAR government, yesterday also reported its total revenues of recurrent business, including rail, property rental and overseas franchise, jumped 6.6 percent in 2009 to HK$18.8 billion.

Total fare revenue in Hong Kong increased 0.3 percent to HK$11.5 billion, while total patronage for all of the company's rail and bus passenger services in Hong Kong also rose 1.4 percent to 1.51 billion in 2009.

Chow Chung Kong, chief executive officer of MTR Corporation, said the opening of Lohas Park station in July and Austin Station in August has added over 60,000 rides every day to the company's network.

"We are quite optimistic about the railway business in Hong Kong this year, as we believe our business will benefit from the economic recovery in the city," Chow said yesterday.

He added that the company will review its fare in June, while adjustments will be made in accordance with the fare adjustment mechanism.

The company has also announced a final dividend of HK$0.38 per share to its existing shareholders. Together with the HK$0.14 interim dividend, total dividend is HK$0.52 per share, 8.3 percent higher than 2008.

(HK Edition 03/10/2010 page2)