HONG KONG: MTR Corporation (MRTC), Hong Kong’s subway-line operator, reported revenue from its station commercial businesses increased by 8.5% in the first half of 2015 to HK$2.58bn ($333m).
The increase was driven mainly by higher rental income from station shops, resulting from rent renewals and increased turnover rents. Operating costs of its Hong Kong station commercial businesses rose by 9.3% to HK$247m, resulting in operating profit increasing by 8.4% to HK$2.33bn, representing an operating margin of 90.4%.
Station-retail revenue for the period increased 11.2% to HK$1.74bn. The increase reflects rental increases, higher turnover rent, particularly from the Lok Ma Chau Station Duty Free Shops, as well as rent earned from shops in the new stations of the Western extension of the Island Line, stated MTRC. This was helped along by domestic fare rises of 0.8% (HK$7.36) and other rail-expansion projects, including the South Island line (East) and the Kwun Tong line extension.
MTR stated that as at June 30, 2015, it operated 1,356 station shops covering 55,768sq m of retail space. Nine new shops opened at Sai Ying Pun Station in March 2015, while renovation works were underway at Fo Tan, Yau Ma Tei, Tseung Kwan O, Lo Wu and Hung Hom stations, with a temporary loss of 186sq m of retail space.
MTR’s results for the first half of this year show that total revenue before interest, taxes, depreciation and amortisation was $2.6bn (HK$20.21bn), up 3.8% compared to the same period last year. Operating profit was $1.07bn (HK$8.35bn), up 6.6%, before the same June 30 cut-off date.
MTRC said an overall increase from 47% to 48.5% in their domestic-services market share was also a significant factor in helping boost its overall share of the franchised public-transport market in Hong Kong (MTRC currently has a 68.7% share in cross-harbour traffic), factors which led global ratings agency Moody’s to announce there were no surprises in a “solid” H1 2015 for the company.
MTRC CEO Lincoln Leong Kwok-kuen said in a statement: “Looking ahead to the second half of 2015, in Hong Kong, further economic growth as well as the full-year effect of the opening of the western extension of the Island line will drive continued growth in patronage in our transport business.”
MTRC also operates rail links in Melbourne, Stockholm, London, Beijing, Shenzhen and Hangzhou.
Revenue EBITDA excluding the Chinese mainland increased 6.9% to (HK$14.03bn). MTRC’s Beijing joint venture, Beijing MTR Corporation Limited, has also part-opened the capital’s new metro-line 14.
