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MTR profit growth slows as property income falls

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Rail firm expects more pressure on earnings after booking net gains of HK$7.76b

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MTR Corp's underlying profit fell 2.9 per cent last year as the contribution from property sales declined. The company warned the slowdown was expected to ride into this year.

The urban railway operator and property developer reported underlying profit for the year to December shrank to HK$5.96 billion from HK$6.14 billion in 2005, even as turnover rose 4.24 per cent to HK$9.54 billion.

Including a revaluation gain of HK$1.79 billion from investment properties last year, the net profit of the government-controlled utility fell 8.18 per cent to HK$7.76 billion, the first decline since 2004.

Underlying profit from property sales, the company's main revenue driver, fell 5.9 per cent to HK$5.78 billion, as land available for construction along its rail lines has been waning from the peak in 2004.

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Most of the development profits came from residential projects in Tseung Kwan O, including the Grandiose, Metro Town and Central Heights, with some from the Harbour Green at Olympic Station.

Earnings from property investment and management grew 2.05 per cent to HK$1.09 billion, as retail space at MTR's shopping arcades was fully leased.

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