Patronage rise: Last year's rise in MTR patronage was partly due to the opening of the Disneyland Resort Line.

The Mass Transit Railway Corporation saw a 4.2% rise in turnover last year, to $9.54 billion, but profit fell 8.3% to $7.76 billion, according to its annual financial results. The final dividend was 28 cents, which when combined with the interim dividend of 14 cents, brought the full year dividend to 42 cents.

Announcing the results today, MTRC Chief Executive Officer Chow Chung-kong said operation costs amounted to $4.34 billion last year, up 7.1%.

Operating profit from railway and related businesses before depreciation rose 2%, to $5.2 billion, with a margin of 54.5%. Property development profit fell 5.3% to $5.82 billion. Total revenue from property investment and management surged 7.3% to $1.41 billion.

Net profit attributable to equity shareholders, excluding investment properties revaluation and related deferred tax, dipped 2.9% to $5.96 billion. After including investment properties revaluation and related deferred tax, the amount reached $7.76 billion. The year-end debt-equity ratio improved to 36.7%, from 40.4% at the end of 2005.

Earnings per share were $1.08 before investment property revaluation and $1.41 after.

Cash flow

The corporation's cash flow position remained strong during the year, with net cash inflow of $5.4 billion generated from recurring businesses and $4.4 billion of cash receipts from property developers and purchasers.

After payments for capital expenditure, interest expenses, changes in working capital and dividend payments, the corporation recorded positive cash flow of $3.87 billion for the year, before a one-off interest-free loan of $4 billion provided to a property developer. After such one-off loan advance, there was a cash deficit of $134 million which was financed by increase in debt of $94 million and drawdown of cash balances of $40 million.

The Financial Secretary Incorporated has committed, for dividends declared relating to financial years up to December 31 last year, to receive all or part of its entitlement to such dividends in the form of shares to the extent necessary to ensure that a maximum of 50% of the corporation's total dividend will be paid in cash.

Patronage up

On operations, patronage for MTR lines and the Airport Express grew 1.1% to 876 million, fueled by the opening of the Disneyland Resort Line and AsiaWorld-Expo Station. Patronage on the MTR lines rose 1% to 867 million while the Airport Express grew 12.8% to 9.6 million. Fare revenue for the MTR lines grew 3.3% to $5.9 billion while that for Airport Express surged 9.1% to $612 million.

Mr Chow said since the Ngong Ping skyrail opened in last September, it generated a revenue of $64 million as at the end of last year. To date it has received over one million local and overseas visitors.

Looking ahead, Mr Chow said the rail business should benefit from the expected economic growth this year. However, the growth may slow down as a result of continued intense competition and no fare rise for 24 months from April last year as part of the rail merger agreement. Property developments along both the Airport Railway and Tseung Kwan O Line will continue contribute to profit this year.

Rail development

He pointed out negotiations with the Government on the implementation and funding of the proposed West Island Line are on-going, while the South Island Line proposal is being considered by the Government.

Noting works on a new pedestrian subway at Lai Chi Kok Station will start in this year's first quarter, Mr Chow said new pedestrian links at Prince Edward, Causeway Bay, Tsim Sha Tsui, Kwai Hing, Kowloon Bay, Choi Hung, Sheung Wan and Olympic Stations are being explored.

He noted an RMB15.3-billion Beijing Line 4 project concession agreement was signed with the Beijing Municipal Government last April, and construction will be completed by 2009. In Shenzhen, the corporation is awaiting final approval from the National Development & Reform Commission on the RMB6-billion Shenzhen Metro Line 4 project.

Turning to the rail merger with Kowloon-Canton Railway Corporation, Mr Chow said the Rail Merger Bill is being scrutinised by lawmakers. If completed, it will bring immediate reduced fares and better integration of the two rail networks for the travelling public, he added.