Friends from the media, good afternoon. I'd like to welcome all of you to our results announcement. I am the company's Corporate Affairs and Branding Director. I'm Linda Choy. Once again, welcome to our 2024 interim results announcement.
Let me introduce to you, first of all, our senior management on the podium. Sitting in the middle, we have Dr. Jacob Kam, our Chief Executive Officer; towards right, we have Ms. Jeny Yeung, Managing Director of our Transport Services. To Ms. Yeung's right-hand side is Dr. Tony Lee, Operations and Innovation Director. Next, we also have Mr. Michael Fitzgerald, Finance Director; Mr. David Tang, Property and International Business Director; as well as Mr. Carl Devlin, Capital Works Director.
Our press announcement will be conducted mainly in Chinese. We have also copy of our questions for our directors to answer. So this year will, first of all, review on the interim results of the company. And then Mr. Fitzgerald will walk you through the financial results following that, Dr. Kam will brief you on the way forward. So after that, there will be a Q&A session.
So without further ado, we will now defer to Dr. Kam.
[Interpreted]. Good afternoon, ladies and gentlemen, friends of the media. Welcome to the MTR Corporation's Interim Results 2024 Press Conference. This year marks the 45th anniversary of the commencement of MTR service. Throughout the years, we achieved numerous important milestones to support the development of Hong Kong. We have expanded our services to all the 18 districts driving the developments of new communities while also revitalizing old districts.
The development of the railway network also plays an important role in strengthening the connection between Mainland China and Hong Kong. The opening of the high-speed rail Hong Kong section in 2018 has enhanced our services providing more convenient and efficient integration with national high-speed rail network and the upgraded East Rail line connecting Lok Ma Chau control points to Hong Kong Island, has further facilitated the development of Hong Kong and Shenzhen. Moreover, MTR Corporation has extended its expertise in railway investment, construction and operation to various cities in the Mainland, as well as in Europe and Australia, promoting the Hong Kong railway brand and bringing pride to Hong Kong.
Each milestone represents our dedication and marks our contribution to the building advancing Hong Kong. Whether in the past or present, we have consistently provided safe, reliable and efficient railway services to the public. Meanwhile, we continually strive for improvement, enhancing customer experience and introducing more innovative technologies. Thus, make MTR the public transport artery of Hong Kong boosting passenger flows, stimulating the economy helping to build communities, connecting people's lives and keeping cities moving.
I will now introduce developments in several areas of the corporation since the last results announcement. With railway as our core business, we consistently deliver high-quality services to the public. The total local patronage exceeded HKD 950 million in the first half of the year. We maintained world-class levels of 99.9% in both train service delivery and passenger services. Our all passenger journeys on time for our heavy rail network in Hong Kong to facilitate the public's mobility, we have enhanced train services on several railway lines early this year.
For cross-boundary services, to meet the growing demand and changing consumer behavior following the pandemic, we have enhanced train services on the East Rail line on weekends and holidays, providing convenience to cross-boundary travelers. On the high-speed rail Hong Kong section, we further enhanced our Flexi-trip service, extending it to cover all stations in Shenzhen.
Starting from mid-June, a new long-haul route directly connecting popular tourist destinations such as Zhangjiajie in Hunan province was introduced on the high-speed rail Hong Kong section, which now provides direct access to a total of 78 destinations. Sleeper trains have also been introduced on the high speed rail and connecting Hong Kong to Beijing and Shanghai, allowing passengers to be departing in the evening and arriving in the morning and offering another option for cross-boundary long-haul trips.
The corporation is committed to embracing innovation and technology to drive a smart railway and to enhance maintenance efficiency through strengthened railway asset monitoring. Our technology development efforts in Smart Railway were recognized with multiple awards at 49th International Exhibition of Inventions Geneva this year. We have also launched a trial in smart service model at stations further enhancing customer experience.
We have formulated forward-looking railway asset renewal programs to ensure the railway system meets the needs of future operations, continuously providing high-quality railway service and enhancing traveling experience to the public due to the complexity of some ongoing major renewal projects and the completion time exceeding the Golden 2 hours window, certain asset renewal works as planned -- as planned will temporarily affect normal train services. We appeal for passengers' understanding.
In late July, we successfully completed a major tunnel asset renewal project on the Kwun Tong line. Moreover, various MTR lines have been replacing their trains and signaling systems. To support the development of railway network and life cycle of railway assets, about 20% of the new trains have entered into service on Kwun Tong line and Island Line, a new signaling system for the Tuen Mun line is now on the on-site train testing phase. The asset renewal projects were Disneyland resort line, including the introduction of new trains and signaling system replacement have been started.
We consistently make use of the Golden 2 hours window during non-tracked hours for asset maintenance renewal and works on new railway projects. We are making every effort to minimize the impact on passengers from extensive asset replacement and new railway construction work.
We are progressing with several railway projects, during the construction stage. They are expected to provide more than 20,000 related job opportunities driving the local economy and enhancing industry development with the vision of go beyond boundaries. For the new railway projects the corporation will progressively advance respective projects supporting sustainable development of Hong Kong. Construction works for the Tung Chung line extension, Kwu Tung Station, East Rail line, Tuen Mun South Extension and Oyster Bay station have commenced since mid-last year. Advance works for Hung Shui Kiu station and the Tuen Mun Line commenced this year, while Northern Link has been gazetted. Major civil works of several railway projects will commence this year to lay a solid foundation and prepare for construction peak in the next few years.
Part of the Tung Chung line extension project involves diverting a section of track to connect to the future Tung Chung East station and several turnout installations are required. Our team will plan and carry out the works meticulously to minimize impact on passengers.
On property business, we expect to book profits from the sales of several property development projects this year. In our mall business, THE SOUTHSIDE and Wong Chuk Hang Station launched a full-scale soft opening in June and will officially open at the end of this year, providing comprehensive amenities and facilities for the community. Furthermore, we are making progress on 14 residential property projects, which are expected to provide approximately 12,000 housing units. We'll continue to explore property development opportunities along existing and future railway lines, making optimal use of all land resources creating sustainable communities in different districts.
Revenue from property development plays a critical role in sustaining railway investment construction and operations. However, revenue from property development fluctuates year-on-year, while railway requires long-term and continuous investment in operation expenses. A stable financial foundation is crucial for investment renewal and maintenance of railway assets to ensure the sustainable development of railways. The corporation has stopped the Rails Plus property integrated development model to maintain its solid financial foundation, ensuring that the corporation has sufficient resources to build new railways and operate and maintain safe, reliable and efficient railway services.
In our Mainland China and international businesses, the remaining sections of Beijing Metro Line 17 are under construction and the initial section of Shenzhen Metro Line 13 Phase 1 project is planned to open within the year. Overseas business, we look forward to the opening of City section of the City -- Metro City and Southwest Line. Our concession for Melbourne's Metropolitan rail service has been extended to November 2027. The Elizabeth Line Railway service in the U.K. achieved a stable performance for the concession extended to May 2025, and we will continue to pursue opportunities in railway and transit-oriented development in the Mainland of China, including the GBA and overseas.
MTR has been growing alongside the community over the years to celebrate our 45th anniversary of Metro services commencement. We launched the Station Rail Voyage exhibition at Hung Hom Station in April, showcasing retire trains and interesting historical railway artifacts. We are delighted that the exhibition has been well received by the community and exhibition will be extended to next year. And we have launched the Doraemon themed trains on several railway lines along with Doraemon sculptures at various stations, bringing joy to people across the districts.
MTR is a low-carbon public transport provider, and we are committed to implementing and promoting our ESG vision. We strive to reduce carbon emissions through different measures. We launched our first electric bus in early June and plan to introduce at least 30 electric buses by the end of 2026.
We will conduct a research study on hydrogen fueled and non-revenue light rail vehicle to collect data and information to help explore and evaluate the feasibility of using hydrogen fuel and MTR network. We are pleased that the science-based target initiative as BTI organization has approved our targets for our railway and property businesses in Hong Kong to cut around half of our greenhouse gas emissions by 2030, supporting our long-term goal of achieving carbon neutrality by 2050 and promoting a green future. We are committed to incorporating green designs and features into our new railway and property development projects.
We will also continue to enhance the facilities in our stations, chains and properties to provide a caring and convenient living experience for the public. We are fully prepared to embark on a new journey. Many railway facilities have been in use for more than 40 years since the service commencement. The corporation will be moving forward with major railway as a renewal based on the asset condition and life cycle as well as various new railway projects, and we will exercise prudent financial management proceeding step by step to support the sustainable development of the corporation and Hong Kong, given the uneven pace of global economic recovery and interest rate movements and the shift in travel and consumption patterns.
After the pandemic, the corporation is managing similar challenges that are faced by many other companies in Hong Kong. With this year's business performance and the substantial investment in constructing new railway lines, we are adopting a forward-looking approach to consolidate our financial strength ensuring that we have sufficient financial resources to expand our railway network and maintain high-quality services amidst a new normal and increased competition.
After taking into account the corporation's financial position and future capital requirements, the MTR Board has declared an interim ordinary dividend of HKD 0.42 per share.
Next, I will say a few words in English. Ladies and gentlemen, this year is the 45th anniversary of the commencement of MTR's first metro service in Hong Kong. Throughout these years, we have expanded our service to all of the 18 districts driving the development of new communities while also revitalizing all districts. We consistently provide a safe, reliable and efficient railway service to our customers and keep Hong Kong moving.
The opening of the high-speed rail Hong Kong section in 2018 facilitated a more seamless integration with the national high-speed rail network, providing a more convenient and efficient mode of cross-boundary travel. Beyond Hong Kong, MTR Corporation has extended its expertise in railway investment, construction and operations to various cities in Mainland China, as well as Europe and Australia.
Now I want to share with you the highlights of a few areas of our businesses. With railway as our core business, we consistently deliver high-quality services to the public. The total local patronage exceeded $950 million in the first half of this year. We maintained world-class levels of 99.9% in both train service delivery and passenger journeys on time for our heavy rail network in Hong Kong.
For cross-boundary service to meet the growing demand and changing consumer behavior following the pandemic, we have enhanced train service on the East Rail line in weekends and holidays. On the high-speed rail Hong Kong section, we introduced a new route connecting popular tourist destinations in Hunan province and launched the overnight sleeper trains connecting Beijing and Shanghai, offering more convenience for cross-boundary long-haul journeys.
The cooperation is committed to embracing innovation and technology to drive a smart railway for the future. Our technology development efforts in smart Railway were recognized with multiple awards at the 49th International Exhibition of Inventions at Geneva this year. We have also launched a trial of the smart service model at stations, further enhancing customer experience.
As a renewal plan aims to ensure that the railway system not only meets the needs of future operations, but also enhances the overall customer experience. In late July, we successfully completed a major terminal asset renewal project on the Kwun Tong line. Moreover, about 20% of the new trains have entered into service on the Kwun Tong line and Island line.
The new signaling system for the [ Kwun Tong ] line is now in the on-site train testing phase. We have also initiated as a renewal projects for the Disneyland Resort line. We consistently make use of the Golden 2 hours window during non-traffic hours for asset maintenance renewal and works on the new railway projects. We are making every effort to minimize the impact on passengers from our extensive asset replacement and new railway construction work.
The corporation is progressing with several railway projects to strengthen the city's long-term and sustainable development. These new projects will help create more long-term employment opportunities and support the sustainable development of Hong Kong. Construction works for the Tung Chung Line Extension, Kwu Tung Station on the East Rail line, Tuen Mun South Extension, and Oyster Bay Station have commenced since middle of last year.
The advanced work of Hung Shui Kiu Station on the Tuen Ma Line commenced this year, while the Northern Link has been gazetted. Part of the Tung Chung Line extension project involves diverting a section of track to connect to the future Tung Chung East station. Our team will plan and carry out the work meticulously to minimize the impacts on passengers.
In our property business, we expect to book profits from the sales of several property development projects this year. In June, the south side shopping mall at Wong Chuk Hang station launched a full-scale soft opening, and we officially open at the end of this year. We are making progress on 14 residential property projects. We will continue to explore property development opportunities along our existing and future railway lines, making optimum use of all land resources.
Revenue from property development plays a critical role in sustaining railway investment, construction and operations. However, revenue from property development fluctuates year-by-year while the railway requires long-term and continuous investment to renew and upgrade railway assets. The corporation has adopted the Rail Plus property integrated development model to maintain a solid financial foundation, ensuring that the corporation has sufficient resources to build new railways and to operate and maintain safe, reliable and efficient railway services.
In our Mainland China and international businesses, the remaining sections of Beijing Metro Line 17 are under construction and the initial section of Shenzhen Metro Line 13 Phase 1 project is planned to open within this year. In Sydney, we look forward to the opening of the city section of the City Metro City and Southwest Line. Our concession for Melbourne metropolitan railway service has been extended to November 2027. The Elizabeth line railway service in U.K. achieved a stable performance with the concession extended to May 2025. We will continue pursuing opportunities for railway and transit-oriented development in the Mainland of China, including the Greater Bay Area and overseas.
MTR has been growing alongside the community over the years. To celebrate our 45th anniversary of metro service commencement, we launched the Station Rail Voyage exhibition at Hung Hom Station in April, showcasing retired trains and interesting historical railway artifacts. We are delighted that the exhibition has been well received by the community. The exhibition will be extended to next year. The corporation also launched Doraemon themed trains on several railway lines, along with Doraemon sculptures at various stations, bringing joy to people across the districts.
We are committed to implementing and promoting our environmental, social and governance vision. Our first electric bus was launched in early June. We will soon -- we will also conduct a research study with the hydrogen fueled light rail vehicle to collect data and information to help explore the feasibility of using hydrogen fuel in the MTR network. We are pleased that the science-based target initiative organization has approved our carbon emission reduction targets for our railway and property business in Hong Kong. We aim at cutting around half of the greenhouse gas emissions by 2030, supporting our long-term goal of achieving carbon neutrality by 2050. We are committed to incorporating green designs and features into our new railway and property development projects.
Many of our railway facilities have been in use since the commencement of service. The corporation will be moving forward with major railway asset renewal based on the asset conditions and life cycle. At the same time, we will, of course, push forward the various new railway projects. We will exercise prudent financial management to support the sustainable development of the corporation and of Hong Kong.
Given the uneven pace of global economic recovery and interest rate movements, and the shift in travel and consumption patterns after the pandemic, the corporation is managing similar challenges that are faced by many other companies in Hong Kong. We are adopting a forward-looking approach to consolidate our financial strength, ensuring that we have sufficient financial resources to expand our railway network and maintain high-quality services amidst the new normal and increased competition. After taking into full account the corporation's financial position and future capital requirements, the MTR Board has declared an interim ordinary dividend of HKD 0.42 per share.
I'll now pass to Michael to report some of our financial highlights.
Thank you, Jacob. Recurrent businesses in Hong Kong recorded a profit of $3.5 billion mainly attributable to the recovery in patronage. This recovery was particularly strong in the first couple of months of the period, but it did moderate thereafter, especially during holiday periods. Recurrent businesses outside Hong Kong recorded a profit of $0.5 billion. This improvement over 2023 was mainly due to our successful exit from two loss-making franchises in Sweden, for which provisions had already been made in 2023.
Property development profit after tax was $1.7 billion. Our property profits, in particular, which are more significant in some years than in others are a vital part of our ability to finance our long-term investment in long-term projects. Underlying business profit was $5.8 billion. Together with changes in fair value measurement, total net profit attributable to shareholders for the first half of 2024 was $6 billion. While this number does not represent a full return to pre-pandemic levels, it does demonstrate good improvement over last year. The group's financial position remains robust. This is a good starting point for our upcoming program of investment and growth, both in terms of new projects, and in terms of ongoing asset replacement and upgrades.
As at the end of June 2024, the combined total of our available cash balances and undrawn committed facilities exceeded $50 billion. Our net debt-to-equity ratio remained at a healthy level of 27.5%. I now turn to the profits of our various business segments. In Hong Kong, the EBIT generated by our transport operations was $0.4 billion compared to a loss of $0.8 billion last year. This was principally due to the recovery in patronage, reflecting that the first half of 2023 still had some months of pandemic-related restrictions, something that was not relevant in 2024, but also due to the fact that the patronage increase now includes improving numbers on both cross-border and high-speed rail services.
Our station commercial EBIT increased by 5.5%, mainly due to the increase in station retail rental revenue. The EBIT of our Property rental and management business increased by 8.2%, mainly due to the additional contributions from our new shopping malls the Y and the SOUTHSIDE. Performance of the international business was steady with the improvement in profitability, driven by the changes in our Swedish business.
In terms of our consolidated balance sheet, total assets increased by $15 billion to $361 million, mainly due to the increase in cash balances and the additions of railway construction in progress. Total liabilities increased by $14 billion to $182 billion, largely on account of the net drawdown of loans and the accrual for the 2023 final dividend. As such, total equity was essentially flat at $179 billion. As for our consolidated cash flows, our operating activities generated $8.2 billion of net cash inflow. After including $9.6 billion of CapEx and other items, our net cash outflow before financing was $1.4 billion. Finally, after net debt drawdown, the increase in cash was $8.9 billion.
With regard to our financing and credit position, total group borrowings increased by $10.9 billion to $70.4 billion. This is on a gross basis. Net borrowings increased by a much lower amount of only $2 billion. Almost 2/3 of our borrowings were on a fixed rate basis, which has helped to mitigate the adverse impact of interest rate hikes in recent years. Our average borrowing cost for the first half of 2024 was 3.8%, 0.5 percentage points higher than that for the first half of last year, but still low by historical standards and in absolute terms. We continue to enjoy access to the capital markets at a competitive cost.
MTR's interest cover ratio stood at a solid 11.6x, an improvement on the first half of 2023. The total CapEx from 2024 to 2026 is estimated to be $89.6 billion, of which 46% or $41 million will be used for Hong Kong railway maintenance CapEx. This is higher than previous years, mainly because several railway maintenance and asset replacement projects are taking place at the same time, including train, signaling and power systems. 34% will be used for new Hong Kong railway projects, including Oyster Base Station, Tung Chung Line Extension, Kwun Tung Station and Tuen Mun South Extension, 16% will be allocated to the Hong Kong property business, while the remaining 4% is for Mainland China and overseas investments.
With that, I will now hand back to Jacob to present our outlook.
Thank you, Michael. MTR has been serving Hong Kong for almost half a century. Our teams are ready to lead the way forward with smart railway in order to keep cities moving. To provide a more caring traveling experience, we'll continue to allocate resources to upgrade and renew our railway assets and we will continue to explore innovation and technology solutions in all our businesses.
Regarding the enhanced strategic railways under the Hong Kong major transport infrastructure development blueprint published by the Hong Kong government, we will support the government according to the sustainable development principle and will provide citizens with an enhanced railway system in the future. On property development, subject to the construction and sales progress we expect to book property development profits from the sell-side packages, 4 and 5 Ho Man Tin Station Packages 1 and 2 and LOHAS Park Package 11.
Against the background of uncertainties in the global economy and in pace of interest rate changes, we will continue to closely monitor market conditions and develop appropriate tender plans for property development projects. We anticipate tendering for Tung Chung E Station Package 1 with the next 12 months. Our Mainland China and overseas businesses, the initial section of Shenzhen Metro Line 13 Phase 1 project is planned to open within the year. We look forward to the opening of City section of Sydney Metro City and Southwest Line. We'll continue to pursue development opportunities in the Mainland and including the GBA and overseas.
Finally, I want to express my sincere appreciation and gratitude to every colleague for their unwavering dedication to serving the public over the past 45 years. We have achieved numerous milestones for the corporation. As we look towards the future, we remain committed to exercising prudent financial management and maximizing the value of our resources, leveraging innovation, technology to keep cities moving and to Go Smart Go Beyond with the community.
