ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Transportation

Hong Kong railway warns of tough 2020 after 26% profit drop

Coronavirus takes total on MTR, which called 2019 its 'worst' year

Hong Kong's political protests caused damage to MTR equipment, like these ticket machines at Sha Tin Station.   © Reuters

HONG KONG -- MTR, which runs Hong Kong's subways, says it expects another tough year in 2020, with the coronavirus outbreak undercutting profits as travel slumps.

Net profit for 2019 dropped nearly 26% to 11.9 billion Hong Kong dollars ($1.53 billion), MTR reported Thursday.

This year will be just as difficult, railway CEO Jacob Kam said during an earnings call. The state-owned operator already estimates that the coronavirus squeezed profit by HK$1.3 billion in January and February alone.

Kam described 2019 as the worst period in the company's 40-year history.

Total ridership last year decreased 6.4% to 1.91 billion trips. Though passenger count rose 2.5% in the first half, the pro-democracy demonstrations that started in June shrank the second-half number by 14.8% from a year earlier.

In the first two months of 2020, ridership plunged 34% on the year. High-speed lines linking Hong Kong to the mainland were suspended in the beginning of the year. Temporary school closures and the spread of telecommuting amid the virus outbreak dealt a heavy blow as well.

Damage stemming from the social unrest had a earnings impact estimated at HK$2.3 billion, MTR said. Costs include fixing and replacing damaged station infrastructure as well as increasing security, Lam said.

Revenue last year inched up 1% to HK$54.5 billion. Receipts from the high-speed line that opened in September 2018 offset lost passenger fares due to the protests.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media