The Mass Transit Railway Corporation recorded $8.63 billion in revenue in the first six months of the year, up 1.2% on the same period last year.

Fare revenue fell 1.2% to $5.527 billion while property development profit surged from $348 million a year earlier to $2.147 billion.

Announcing the interim financial results today MTRC Chief Executive Officer Chow Chung-kong said the results show steady business performance and good results from property development.

Operating profit from railway and related businesses before depreciation and amortisation rose marginally to $4.799 billion. The jump in property development profits was mainly due to the final profit split with the developer of Kowloon Station's The Harbourside and profits from The Palazzo and The Capitol.

Network expansion

"Despite the global recession and its negative impact on the Hong Kong economy our recurrent businesses, comprising rail, station commercial and rail related businesses along with property rental and management, registered solid performance while our property development business remained resilient," Mr Chow said.

Noting good progress was made on the planning and construction for the company's five new rail projects, Mr Chow added the Kowloon Southern Link with the new Austin Station will open August 16, which will strategically connect the West and East Rail Lines through an interchange at Hung Hom Station.

The net profit attributable to equity shareholders, excluding investment properties revaluation and related deferred tax, grew 43% to $3.903 billion. Including investment property revaluation, the net profit attributable to equity shareholders was $4.498 billion, down 4.1% on a year earlier.

Reported earnings per share were 79 cents, down 4.8%. The corporation's Board of Directors has declared an interim dividend of 14 cents per share.

Operations

Total patronage on the integrated MTR system - rail and bus passenger services - grew 0.7% to 726.4 million. The corporation's overall share of the franchised public transport market rose to 42% in the first five months from 41.6%, with the share of cross-harbour traffic dropping from 56.6% to 55.4% due to continued strong competition.

The company's domestic service recorded total patronage of 586.7 million, up 0.3% on a year earlier. However, a patronage reduction was seen from May due to early school closures caused by human swine flu. Patronage for cross-boundary services at Lo Wu and Lok Ma Chau fell 0.4% to 45.8 million.

Total fare revenue was $5.527 billion, down 1.2% on a year earlier. Fare revenue of the domestic service was $3.829 billion with the average fare per passenger falling 0.8% to $6.53 due to the extension of student half-fares to the East and West Rail, and Ma On Shan Lines from last September.

Cautious outlook

Looking ahead Mr Chow said while the rail business is defensive by nature the MTRC will take a cautious stance for the balance of 2009 as a patronage reduction in domestic services is expected to continue in the second half due to the economic environment and swine flu.

He said fare levels will remain unchanged this year, but added the calculated 0.7% rise in the second quarter under the Fare Adjustment Mechanism will be carried forward to next year.

Depending on market conditions the company may tender two Kowloon Southern Link sites and the Nam Cheong Station site before the end of next year's first quarter.