MTR staff checks the train along the South Island Line during a press conference at Admiralty Station on Dec 5, 2016. (PARKER ZHENG / CHINA DAILY)
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 North-South 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.