MTR CORPORATION(HK:00066)2020-04-09 08:33Railway Operations and Expansion - The MTR Corporation operates a railway network totaling 262.6 kilometers in Hong Kong, with over 1.9 billion passenger trips recorded in 2019[12]. - The company has been expanding its railway business portfolio in mainland China, Europe, and Australia since 2007[12]. - The company is actively expanding its railway network in Hong Kong, mainland China, and overseas, with new projects in Sydney and Hangzhou now operational[60]. - The company has secured operational and maintenance rights for Beijing Metro Line 17, expanding its presence in mainland China[67]. - The company is currently operating railway services in four countries, with a total railway length of 2,102 kilometers outside of Hong Kong[198]. - The company aims to expand its operations into mainland China, Europe, and Australia, focusing on meeting customer needs to become a recognized leader in railway operations[199]. - The company has submitted proposals for five new railway projects as part of the government's 2014 Railway Development Strategy[197]. - The company is working closely with the government on the detailed planning and design of three new railway lines announced in the 2019 Policy Address[197]. Financial Performance - Total revenue for 2019 was HKD 54,504 million, a 1.1% increase from HKD 53,930 million in 2018[25]. - Regular business revenue from Hong Kong passenger operations was HKD 19,938 million, up 2.3% from HKD 19,490 million[25]. - The net profit attributable to shareholders was HKD 11,932 million, down 25.5% from HKD 16,008 million[25]. - Regular business profit attributable to shareholders was HKD 4,980 million, a decrease of 44.8% from HKD 9,020 million[25]. - The company reported a total EBIT of HKD 13,501 million, down 8.8% from HKD 14,810 million[25]. - The company’s total EBITDA was HKD 21,033 million, a decrease of 1.9% from HKD 21,442 million[25]. - The company’s income tax expense was HKD 1,922 million, compared to HKD 2,325 million in the previous year, a decrease of 17.3%[25]. - The company’s regular business profit and total profit were expected to grow by 7.7% and 4.1% respectively on a normalized basis[25]. - The company’s basic earnings per share decreased to HKD 1.94 from HKD 2.64, a decline of 26.5%[26]. - The company’s EBITDA margin decreased to 28.1% from 35.0%, a decline of 6.9 percentage points[26]. - The company’s EBIT margin decreased to 13.8% from 21.5%, a decline of 7.7 percentage points[26]. - The company’s net debt to equity ratio improved to 15.4% from 18.1%, a decrease of 2.7 percentage points[26]. - The company incurred a loss of HKD 591 million in EBIT for Hong Kong passenger operations, compared to a profit of HKD 1.985 billion in the previous year[71]. - The company’s passenger volume from railway subsidiaries, joint ventures, and associates outside Hong Kong increased by 4.1% to 2,276 million[89]. Property Development and Management - MTR Corporation has awarded three property development projects[16]. - The company continues to develop various types of businesses, including residential and commercial property development, leasing, and management[12]. - MTR Corporation is actively involved in property development, with the approval of multiple phases of the "Sun Hung Kai" project during the year[66]. - Profit from property development business increased by 148.8% to HKD 5.58 billion[61]. - The company plans to supply approximately 22,000 residential units to the Hong Kong market over the next six years through 16 property development projects[88]. - The company is developing a total of 16 new residential projects, which will provide approximately 22,000 new units over the next six years[181]. - The company has signed an agreement to acquire the revenue rights of two shopping malls for a total of HKD 3 billion, enhancing sustainable financial resources for its railway business[88]. - The company achieved a near 100% occupancy rate for its shopping malls and the 18th floor of the International Finance Centre II as of December 31, 2019[169]. Customer Experience and Service Quality - The company is enhancing customer experience by upgrading station facilities and implementing digital applications for better journey planning[59]. - MTR Mobile had approximately 1.4 million monthly active users in 2019, enhancing customer experience through AI and IoT technologies[77]. - The company is committed to improving station facilities, including the installation of more baby care rooms, restrooms, and charging sockets for mobile devices[77]. - The company is enhancing its signaling systems to increase train frequency during peak hours, with additional train services planned for various lines[76]. - The punctuality rate for heavy rail services remained at 99.9%, exceeding operational targets despite external factors affecting service performance[146]. - Customer satisfaction regarding service and fare was assessed through regular surveys, influencing service quality indices[148]. Challenges and Responses - There will be no actual fare adjustments for the remainder of 2020 due to the challenges posed by the COVID-19 pandemic[17]. - The company has implemented various cost control measures in response to the financial impact of the COVID-19 pandemic, including no fare adjustments for the remainder of 2020 and rent reductions for small tenants[64]. - In 2019, MTR Corporation faced significant challenges due to social unrest and the COVID-19 pandemic, impacting its operations and public confidence[65]. - The company anticipates that the performance of its Hong Kong passenger business, station commercial, and property leasing businesses will be adversely affected by public activities and the COVID-19 pandemic[124]. - The company is facing significant challenges due to various uncertainties in the current environment, including economic slowdown and geopolitical issues[124]. - The company reported that the financial impact of the COVID-19 pandemic on recurring business net profit is estimated to be approximately HKD 1.3 billion for the first two months of 2020[125]. Corporate Governance and Citizenship - The company aims to enhance its corporate citizenship reputation in Hong Kong and strengthen its core business[5]. - MTR Corporation is committed to enhancing its environmental, social, and governance (ESG) performance, with a focus on reducing electricity consumption and carbon emissions through new technologies[62]. - The company is focused on improving corporate governance and culture following recent incidents and challenges faced in 2019[58]. - MTR Corporation is committed to community engagement through various programs aimed at benefiting young people and supporting charitable initiatives[63]. - The company is enhancing its corporate governance practices to meet the increasing expectations of stakeholders[63]. Future Outlook - The company expects the full Sha Tin to Central Link to be operational by 2021, with the Hung Hom to Admiralty section targeted for the first quarter of 2022, although challenges remain[85]. - The company plans to launch three property development projects in the next 12 months, providing approximately 4,050 residential units[127]. - The company aims to continue its efforts on the Shatin to Central Link project and prepare for the full operation of the Tuen Ma Line in 2021[127]. - The company is preparing to submit project proposals for two remaining projects under the 2014 Railway Development Strategy in 2020[197].