Hong Kong’s MTR back on track with ambitious plan
- Hong Kong’s sole railway operator returns to profit in recurrent business and is now in position to restore high standards behind its enviable global reputation
Further evidence that Hong Kong’s economy is returning to health came last week when the MTR Corporation reported HK$2.43 billion (US$311 million) in profits from recurrent business in the first half of the year.
The city’s sole rail operator, which is also a property developer, is majority government-owned.
News that it posted a rebound from its HK$678 million loss in the same period last year was all the more welcome coming a day after a positive earnings report from the city’s flagship airline, Cathay Pacific.
MTR fortunes were derailed by losses that mounted during the double whammy of the 2019 social unrest and the pandemic. The MTR Corp lost money for the first time since its listing two decades ago when it posted a deficit of HK$4.8 billion in 2020.
Despite an 11.7 per cent fall in first-half net profit to HK$4.17 billion, which included a drop in property development earnings, it has now posted a strong showing in recurrent operations.
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Such operations cover transport services, railway station commercial businesses, property rental and management, as well as mainland and international railway services.
CEO Jacob Kam Chak-pui voiced cautious optimism about the corporation’s business outlook. Unveiling the results, Kam admitted the MTR must “contend with other uncertainties” including high global inflation and interest rates.
But the company must also act swiftly to restore an image that has suffered along with its bottom line in recent years amid controversy linked to the 2019 unrest.
It was criticised for its handling of protesters who at first travelled on the network and later targeted it in violent attacks.
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It has also been caught up in a series of incidents that resulted in fines and service disruptions, and struggled to handle a shortage of staff.
MTR officials say they plan to invest billions in maintenance, make better use of innovation and technology to improve standards, and explore opportunities on the mainland and overseas.
While rebounding passenger volume and revenues are encouraging, the goals of the MTR now hinge on restoring the high standards behind its enviable global reputation.
