MTRC net falls 21pc as property income dives

MTR Corporation's (0066) net profit declined 21 percent to HK$7.78 billion in 2023 from a year earlier as gains from property development slumped, but Hong Kong's rail operator maintained a final dividend of 89 HK cents.

Profit from property development plunged 80 percent to only HK$2.08 billion last year, as earnings from Hong Kong recorded the same percentage fall to HK$2.04 billion and those from mainland China slid 28 percent to HK$48 million.

Profit from recurrent businesses reached HK$4.3 billion versus HK$157 million in pandemic-hit 2022, on the back of the recovery of local economic activities and the resumption of cross-boundary services with the mainland.

The recovery also drove up total revenue last year by 19.2 percent to nearly HK$57 billion.

Total MTR patronage last year was nearly 1.9 billion, roughly back to pre-pandemic levels, but cross-boundary numbers were still below the benchmark.

Chief executive Jacob Kam Chak-pui said the fare adjustment mechanism reviewed last year balanced people's affordability and the company's financial sustainability.

Hong Kong transport services managing director Jeny Yeung Mei-chun said the MTRC will take a call on delaying fare adjustment after taking affordability into consideration.

Yeung said the operator is also looking at the possibility of adding direct high-speed railway lines between Hong Kong and Xian and Qingdao, two new cities joining the individual visit scheme.

For property development, the MTRC plans to retender the Tung Chung East Station Package One in the next 12 months. The project received no bids last year, the worst for the company in a decade.

However, profit development income is expected to recover as 14 projects are currently under construction and will be up for sale soon, property and international business director David Tang Chi-fai said.

Meanwhile, the rail operator expects its retail and property rental businesses to continue to be affected by the negative rental reversions made during the pandemic.

When asked about stock trading during adverse weather, Kam said the MTRC would arrange rail services after taking the safety of passengers and employees in consideration.

Chairman Rex Auyeung Pak-kuen has been reappointed to his post, and his new term is extended to December 2025.