Commuters wait for a train to stop at an MTR station in Kowloon, Hong Kong. The city's sole subway operator said Thursday its first-half net profits soared almost 48 percent on property sales and revaluation gains. Edmond Tang, China Daily

MTR Corporation Ltd, Hong Kong's sole subway operator, beat market expectation with a net profit of HK$6.64 billion in the first half of the year, up 47.6 percent from a year ago, as its property development business contributed 73 percent more profit than a year earlier.

Analysts have previously forecast a profit range of HK$4.02 billion to HK$5.2 billion. MTR Corp declared an interim dividend of HK$0.14 per share, unchanged from a year ago.

Revenue from the recurrent business, including fare incomes, rental incomes, station advertising incomes and overseas railway franchise incomes, stood at HK$14.10 billion, up 63.4 percent year-on-year.

Operating profit for the period was partly offset by a 125 percent surge in operating expenses of the local and overseas recurrent businesses, which reached HK$8.61 billion.

The company booked a profit of HK$3.70 billion from property developments, up 73 percent from a year ago, helping to boost the total net profit of the group.

The profit from the property segment was mainly from sales of the Le Prestige residential development project at LOHAS Park in Tseung Kwan O district, Kowloon East, as well as the sales of the Lake Silver and the Palazzo projects in the New Territories.

A revaluation gain of HK$1.10 billion on investment properties, which was up 54.6 percent from a year ago, also boosted the net profit.

Looking ahead, C.K. Chow, chief executive officer of the MTR Corp, is confident that the company's railway and property operations will both benefit from the recovery in the local economy.

Thomas Ho, property director of the MTR Corp, delineated the development of the company's property segment in the Thursday media conference.

"We cannot launch Phase 4 of LOHAS Park in the third quarter of this year because we need to continue to discuss with the administration regarding the issue of land use modification in the region," Ho said, adding that Phase 4 of LOHAS Park involves 3,600 apartment units.

He said the company will put up the remaining 2,900 apartments in its Tai Wai Station project (Festival City) for sale this year to help boost supply in the market.

He also said MTR Corp will sell the Nam Cheong Station site by tender when it finalizes a deal with the government regarding the land premium payment.

China Daily

(HK Edition 08/13/2010 page3)