Company posts H1 income of HK$4.37b

Rail operator MTR Corporation reported on Thursday that its first-half underlying profit dipped 23.6 percent year-on-year as it booked less income from the sales of property above its train stations.

Excluding investment property revaluations and deferred tax, the underlying profit for the six months ended June 30 was HK$4.37 billion.

The company's net profit however, rose 21 percent to HK$8.05 billion compared with HK$6.64 billion in the corresponding period last year.

It attributed the gain to revaluation of its investment properties and improved rail and retail operations. The company recorded a pre-tax gain of HK$4.4 billion in revaluation of investment properties, up from HK$1.1 billion a year earlier.

MTR, which also generates income from sales of commercial and residential properties above its train stations, said profit from property development dropped to HK$ 1.45 billion from HK$3.71billion a year ago.

The company declared an interim dividend of HK$0.25 per share, up from HK$0.14 per share the previous year.

Core rail operations and station retail businesses continued to improve, fuelling a 14.7 percent increase in MTR's total revenue to HK$16.17 billion compared with a year ago.

Total passenger traffic during the first half rose 5.4 percent to 815.4 million, underpinned by sustained economic growth and increased tourist arrivals. Growing passenger traffic, together with a 2.4 percent gain in average fare per passenger in the city, pushed fare revenue up 7.7 percent to HK$6.4 billion.

"Our rail operation recorded good patronage growth. In our non-fare business, higher rental reversions were achieved in station retail shops and our shopping malls. We also saw strong growth in our advertising business," Chief Executive Officer C.K. Chow said at a media briefing Thursday.

Another 11 station shops were opened during the period, bringing the total to 1,265, while its advertising revenue recorded 18.6 percent growth from a year earlier.

The mass transit rail operator said it currently expects to receive an occupation permit for the final phase of Festival City at Tai Wai towards the end of this year. Approximately 97 percent of its phase one and two flats at Festival City had been sold by the end of June.

Besides, the company plans to tender the Nam Cheong Station, Tsuen Wan West (TW5), Tin Shui Wai Light Rail and Tai Wai Station sites over the next six months.

"We understand that in the medium and long term, the property market will be under pressure," Thomas Ho, MTR's property director, said, referring to the government tightening measures, mounting inflationary pressures and mortgage tightening, which may dampen people's enthusiasm to buy homes.

The company's property rental income from Hong Kong and the Chinese mainland grew 6.5 percent to HK$1.47 billion. Rentals for its retail shopping mall portfolio in Hong Kong increased by an average of 15 percent in the first half.

Outside of the city, Beijing MTR posted better-than-expected results in both passenger traffic and financial performance, Chow noted. In Shenzhen, MTR began operations of its Shenzhen Longhua Line Phase 2 in June. The company expects the project to break even within two years.

emmaan@chinadailyhk.com

China Daily

(HK Edition 08/12/2011 page2)