Sunday, July 22, 2018
Martin Hennecke

MTRCL shrugs off costs escalation
Samantha Wong

MTR Corporation (0066) yesterday said it made an interim profit of HK$7.48 billion, up 46.1 percent year-on-year.

However, recurrent profit before property development profits and revaluation of investment properties slipped 8 percent to HK$4.478 billion, "mainly due to higher costs, particularly fixed costs such as depreciation and interest expenses, after the opening of the two new lines in Hong Kong in the last quarter of 2016," the railway firm said.

It declared an interim ordinary dividend of 25 HK cents per share, with scrip dividend as alternative.

It said the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link has been completed 94.3 percent as of June 30 this year, and it expects to start services in the third quarter next year. Meanwhile, the Sha Tin to Central Link was 75.1 percent completed as of June 30. The railway firm said Hong Kong property development profit during the period came mainly from sundry sources and its property tendering activities. For instance, it has been awarded a property package at Wong Chuk Hang station in February.

The company also acted as an agent for a subsidiary of the Kowloon-Canton Railway Corporation, and has been awarded a property package at Kam Sheung Road station in May.

Over the past 3 years, 11 MTR property development packages have been tendered out and are now in various stages of planning and construction, the company said.

"They will provide about 18,000 residential units, with a total gross floor area of over 11.8 million square feet, when completed over the next three to five years," it added.

MTRC will launch property projects according to market conditions over the next six months and it aims to tender out the property package at Wong Chuk Hang Station, said chief executive Lincoln Leong Kwok-kuen.

On the proposed development atop the Siu Ho Wan depot in Lantau, "we took a further step forward with the environmental impact assessment reports for the development being exhibited for public inspection in July," Leong said, adding "about 14,000 residential units could be built."

The firm said rental reversion in its shopping mall portfolio in Hong Kong dropped 2.2 percent in the first half despite a 3.5 percent rise mainly due to rental increases in line with existing lease agreements.

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