Hong Kong's MTR Corp Takes HK$334 Million Hit As Rail Giant Posts Worst Performance Since It Went Public In 2000

Coronavirus has taken heavy toll on corporation's services and valuation of investment properties Passenger numbers down 37.7 per cent to 637.2 million for first half of the year from the same period in 2019
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Hong Kong's MTR Corp Takes HK$334 Million Hit As Rail Giant Posts Worst Performance Since It Went Public In 2000

Hong Kong's rail operator saw net losses plunge to HK$334 million (US$42.8 million) in the first six months of 2020 from a profit in the same period last year - its worst performance since going public two decades ago.

The MTR Corporation's loss, amid the coronavirus pandemic, stands in contrast to a HK$5.5 billion net profit in the previous period, it revealed on Thursday.

Part-privatised in 2000, the government now owns about 75 per cent of the corporation.

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The virus has so far infected more than 3,700 people and killed 44 in Hong Kong, and has taken a heavy toll on the rail giant's services, and the valuation of its investment properties.

There are no signs of improvement either, and a resurgence of Covid-19 across the city since July has prompted tightened social-distancing rules in restaurants and public areas, seen schools take earlier summer breaks, and forced people, including 170,000 civil servants, to work from home.

In a bid to contain the virus, all cross-border railway services have been suspended since January 30, and in Hong Kong, all but three border checkpoints have been closed indefinitely.

This has brought the Guangzhou-Shenzhen-Hong Kong Express Rail Link, and intercity lines to Guangzhou, Beijing, and Shanghai, grinding to a halt.

In the first half of the year, passenger numbers slumped 37.7 per cent to 637.2 million from the same period last year.

The corporation's turnover from recurrent business was 23 per cent lower at HK$21.59 billion.

Hong Kong rail unions push back as MTR announces pay freeze

The net loss arose from an 83.8 per cent contraction in profit from recurrent business to HK$433 million, and a HK$6 billion loss from revaluation of properties in the first half. This offset the HK$5.6 billion profit from property development during the period.

Profit from recurrent business reflected the legacy of last year's anti-government protests, which spilled into the first two months this year and caused an exposure of HK$1.3 billion in losses.

MTR stations were a target of vandalism for radical protesters after they accused the corporation of bowing to pressure from Beijing and colluding with police.

It was proposed that the interim dividend would remain the same at 25 HK cents per share. MTR shares closed 0.25 per cent, or 10 HK cents, lower at HK$39.40 on Thursday before the results announcement.

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