In releasing its annual results, the city’s railway giant also noted that total revenue dropped by 7.5 percent to HK$55.46 billion.
Speaking at a press briefing, Michael Fitzgerald, the group’s finance director, said a lower profit was recorded partly because of an impairment loss related to Hangzhou Metro Line 1.
Other factors included rising operating costs and depreciation costs, as well as rental concessions offered to tenants in Hong Kong, while adverse weather also weighed on revenues.
“But the group’s financial position remains robust, and our net debt-to-equity ratio stands at the healthy level of 22.5 percent,” Fitzgerald said.
Excluding property development profits, earnings from recurrent businesses slipped by about 22 percent to HK$5.65 billion in the 12 months ending in December.
However, profits from property development rose by eight percent year on year to HK$11.08 billion, thanks to progress made on projects at The Southside and in Lohas Park as well as Ho Man Tin station last year, while railway investments made years ago also helped boost growth.
The company said that most of the earnings would be allocated to expanding its extensive rail network in the city, as well as asset maintenance, upgrades and replacements.
“A key milestone among the new railway projects was the signing of the project agreement for The Northern Link part one,” chief executive Jeny Yeung said.
“[Now] preparatory works for the construction commenced, alongside integrated planning for both the main line and spur line.
“We’re targeting the commissioning of both lines no later than 2034 to support the Northern Metropolis development.”
While revenue from Hong Kong’s railway operations rose by 2.5 percent to HK$23.6 billion, sales from its mainland and international railways, property rental and management subsidiaries, which are its second largest source of income, plunged by nearly 19 percent to HK$20.69 billion.
The group proposed a HK$0.89 dividend per share, bringing its total for the year to HK$1.31, unchanged from that in 2024.
Looking ahead, the group noted that while the macroeconomic situation remained challenging, the improving economic landscape and property sector suggested that it might begin to enjoy “a somewhat healthier” operating environment.
Interest rate reductions could also benefit the company by driving down funding costs and mortgage rates, it added.
Edited by Thomas McAlinden
