MTR : Expects to Swing to Loss in 1st Half Due to Pandemic

By Yifan Wang

MTR Corp. said Tuesday that it expects to swing to a net loss in the first half of 2020, as both its subway business and investment properties took a severe hit from the coronavirus pandemic.

The public transportation operator estimates its net loss for January-June between 200 million and 700 million Hong Kong dollars (US$25.8 million-90.3 million). The company made a net profit of HK$5.5 billion in the same period of 2019.

The earnings slump was primarily due to an estimated revaluation loss of HK$6.0 billion for MTR's investment properties, as asset values declined due to the public-health crisis and ensuing economic deterioration.

Profit from recurring business, which include operations of subway lines and retail-space rentals, decreased sharply--by an estimated range of 73%-92% from a year earlier, the company said.

MTR previously warned the pandemic could lead to around HK$1.3 billion of adverse financial impact on the company, as passenger volume plummeted due to social-distancing measures and travel restrictions.

Write to Yifan Wang at [e-mail]