MTR ex­pects leaner prop­erty earn­ings in the sec­ond half

China Daily (Hong Kong) - - BUSINESS - By DUAN TING in Hong Kong tingduan@chi­nadai­lyhk.com

Mass Tran­sit Rail­way Cor­po­ra­tion (MTR) on Thurs­day said it ex­pected earn­ings from prop­erty de­vel­op­ment in Hong Kong to mod­er­ate in the sec­ond half of this year.

The com­pany noted a fur­ther in­crease in land sup­ply — from gov­ern­ment land sales, the pri­vate sec­tor and re­de­vel­op­ment projects — and would mon­i­tor the mar­ket sit­u­a­tion closely to see if they would buy.

Lin­coln Leong, chief ex­ec­u­tive of MTR, said they are do­ing re­search to ex­am­ine op­por­tu­ni­ties to de­velop prop­erty along their rail­way lines. He also apol­o­gized for re­cent de­lays of ser­vice in trans­port, say­ing they will put more ef­fort into main­te­nance.

Profit from Hong Kong prop­erty de­vel­op­ment in the first half of this year amounted to HK$622 mil­lion, 184 per­cent higher than earn­ings of HK$219 mil­lion in the first six months of last year.

In the com­ing six months, MTR plans to ten­der out the Wong Chuk Hang Sta­tion Pack­age Two de­vel­op­ment. The Mar­itime Square Ex­ten­sion is tar­geted to open by the end of the year.

The com­pany said that as of the end of June, the Express Rail Link was 94 per­cent com­pleted. It should be fin­ished by the third quar­ter of next year. The Sha Tin to Cen­tral Link was 75 per­cent com­plete, with the tar­get com­ple­tion of the East-West Cor­ri­dor ad­vanced to mid-2019 and the NorthSouth Cor­ri­dor to be com­pleted in 2021.

Re­gard­ing busi­ness on the Chinese main­land, MTR also signed a con­ces­sion agree­ment for the Hangzhou Metro Line 5, a pub­lic-pri­vate part­ner­ship (PPP) project, and a joint-ven­ture com­pany is planned.

Turning to Hong Kong trans­port oper­a­tions, MTR said that in the first half of this year the com­pany car­ried more than 970 mil­lion rail and bus pas­sen­gers. The heavy rail net­work ran more than 1 mil­lion train trips. Out­side Hong Kong, the com­pany serves about 5.8 mil­lion pas­sen­gers daily, higher than the fig­ure for Hong Kong.

Re­port­ing in­terim re­sults, MTR said first-half net profit amounted to HK$7.48 bil­lion, a 46 per­cent year-on-year in­crease. The in­terim or­di­nary div­i­dend was 25 HK cents per share.

Rev­enue rose 40.8 per­cent year on year to HK$30 bil­lion with re­cur­rent busi­ness rev­enue up 8.7 per­cent to HK$23.16 bil­lion; rev­enue from sub­sidiary prop­erty de­vel­op­ment on the main­land amounted to HK$6.84 bil­lion.

Her­bert Hui, fi­nance di­rec­tor of MTR, said the sig­nif­i­cant growth in rev­enue came mostly from sales at the Tiara de­vel­op­ment in Shen­zhen. He says global eco­nomic un­cer­tain­ties re­main which will be a set­back for prof­its in the sec­ond half.

MTR shares rose 0.54 per­cent to close at HK$46.40 on Thurs­day. The bench­mark Hang Seng In­dex dropped 1.13 per­cent to 27,444 points.

the value of MTR’s profit from Hong Kong prop­erty de­vel­op­ment in H1 this year year-on-year growth in rev­enue for MTR

WAN SHANCHAO / FOR CHINA DAILY

Two work­ers walk past a pro­duc­tion line of an alu­minum plant in Suixi county, An­hui prov­ince.

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