Hong Kong rail giant the MTR Corporation on Thursday posted profits of HK$9.8 billion (US$1.25 billion) for 2022, up 2.9 per cent from the previous year, disguising a sharp downturn in earnings from its recurrent business which took a hit from the city’s fifth wave of Covid-19 cases. Recurrent earnings – from transport operations, and station commercial and property rental businesses – were dealt a heavy blow by the pandemic, with profits down 91.3 per cent year on year to HK$157 million in 2022. CEO Jacob Kam Chak-pui revealed the corporation had suffered a loss of HK$14 billion in total on rail operations over the three years of the pandemic. But he saw light at the end of the tunnel in terms of getting operations back on track. “Stepping into 2023, society is gradually returning to normal … transport demand by local passengers and visitors is increasing gradually,” he said. “In the next year, the MTR Corporation will have been serving Hong Kong for 45 years. We will continue to invest into replacing and upgrading railway assets as well as building new railway lines to support the future development of Hong Kong.” Kam pointed out that since the city reopened its border with the mainland in early January, passenger traffic had rebounded with domestic ridership reaching over 90 per cent of pre-pandemic levels. “The cross-border ridership, including that of the Airport Express and high-speed rail, also reached 50 per cent ofMTR09 pre-Covid levels by the end of February. The passenger numbers have gradually increased. Our service is actually gaining traction,” he said. Hong Kong’s MTR Corp posts HK$4.73 billion profits for half year, up 77 per cent He added that in a decade or so, the corporation would plough HK$100 billion into new projects under the Railway Development Strategy 2014 and other schemes. The company’s directors proposed a final dividend of 89 HK cents per share, down 12.7 per cent from HK$1.02 previously, taking the full-year amount to HK$1.31, or 3.2 per cent higher than in 2021. Earlier this year, cross-border travel between Hong Kong and mainland China fully resumed, including the return of the city’s high-speed rail link, after three years of Covid-19 entry curbs. The rail giant said revenue climbed 1.3 per cent to HK$47.8 billion in 2022 from a year earlier. Its net profit included HK$10.5 billion from property development, which was 12.2 per cent higher than in 2021. The loss from fair value measurement of investment properties narrowed 49.3 per cent to HK$810 million. Property development gains were largely generated from projects such as Lohas Park in Tseung Kwan O. Passenger numbers during the second half of 2022 increased amid a winding down of the city’s fifth coronavirus wave and the later easing of restrictions on businesses and international travel. But MTR ridership throughout the entire year dropped 6 per cent from 2021 to 1.3 billion. Transport operations posted a loss of HK$4.7 billion, compared with a deficit of HK$4.2 billion in 2021. In 2020, the MTR Corp lost money for the first time since its listing two decades ago, posting a deficit of HK$4.8 billion as it reeled from the effects of the 2019 social unrest and the economic ravages of Covid-19. MTR commuters can use Shenzhen Metro app to pay for Hong Kong rides But the rail giant is expected to remain on track for a full recovery after the high-speed rail resumed short-haul services to Guangzhou and Shenzhen in January. Express rail services from Hong Kong to Beijing and other long-haul destinations on the mainland will fully return on April 1, while trains to three locations in Guangdong province will resume on March 11. A review of the railway’s fare adjustment mechanism is also under way and expected to conclude during the first half of this year. Asked if the MTR Corp would share more profits with the public under a revised mechanism, Kam insisted the system had worked well in the past, taking into account affordability, adding that the rail firm did not make any fare increase in the past three years. Hong Kong government panel to oversee MTR review after high-profile incidents “The mechanism itself is an open, transparent, predictable mechanism based on the government statistics to calculate the adjustment amount … In fact, one year, we had a fare reduction as a result of the mechanism,” he said. As to whether the historic cross-border intercity through-train services with Guangzhou, Beijing and Shanghai would be axed, Kam said there was no plan to resume them as the high-speed rail covered all its journeys. Lawmaker Michael Tien Puk-sun, former chairman of the Kowloon-Canton Railway Corporation (KCRC), said the MTR fare adjustment mechanism should be simplified and based only on the annual inflation rate to rein in its yearly increases, adding that it should be reformed to ensure it shared more profits with the public. “At present, the mechanism is too complicated by taking into account a lot of factors such as productivity and the transport wage index, which nobody understands,” he said. “The fare adjustment should only be half of the annual inflation rate. If the MTR Corp’s profit exceeds a certain amount, the entitled fare increase should be reduced by a certain percentage. This revised mechanism will make everybody more comfortable.”
