MTR expects protest-related costs to reach HK$1.6 billion

December 06, 2019 12:34
Part of the huge cost relates to the extensive damage to MTR stations and facilities targeted by radical protesters. Photo: HKEJ

MTR Corp. expects a decline in full-year profit amid a drop in passenger numbers and massive vandalism to its train stations and facilities during the months-long protests, the Hong Kong Economic Journal reports.

Costs related to the social unrest –  including concessions to retail tenants in MTR-owned station kiosks and shopping malls, as well as the hiring of additional staff and security – could reach HK$1.6 billion, the railway operator said in a filing to the stock exchange.

The number of passengers using MTR rail services fell 14.2 percent to 744.3 million in July to November, compared with the same period last year, MTR data showed.

Passenger numbers dropped 27.4 percent to 130 million in October and 27.2 percent to 129.6 million in November, from a year ago.

MTR facilities have been targeted by protesters, who accuse the company of colluding with the police and preventing people from joining protests.

“Taking into account the impact of the social unrest and the anticipated performance of the group’s property development business and other businesses”, MTR's underlying business profit this year will be less than the HK$11.263 billion seen in 2018, the company said.

If the provision of HK$2.43 billion for costs related to the Hung Hom MTR Station extension and the First MTR South Western Trains had not been made, the company expected that its underlying business profit this year would have been higher than that of last year.

First MTR South Western Trains refers to the company's joint venture that operates the South Western Railway franchise in the United Kingdom.

In Thursday’s statement, the MTR said its board believes that the company's overall financial position “remains sound” and it is proposing to maintain its "present progressive ordinary dividend policy”.

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