 |
HONG KONG. Hong Kong railway operator MTR has posted a +8.5% increase in revenue from its station commercial businesses in the first half of 2015, to HK$2.58 billion (US$333 million).
The increase was mainly due to higher station shop rental rates as well as turnover rents. Related expenses rose +9.3% to HK$247 million (US$31.9 million), attributed to higher government rent and rates.
Operating profit increased by +8.4% in the first half of 2015 to HK$2.33 billion (US$301 million), representing an operating margin of 90.4%.
Station retail revenue for the period increased by +11.2% to HK$1.74 billion (US$225 million). MTR said the performance reflected rental increases, higher turnover rent, particularly from the Lok Ma Chau Station Duty Free Shops (run by Sky Connection), as well as rent earned from shops in the new stations of the Island Line’s Western extension.
There are currently 1,356 station shops in MTR’s network, covering 55,768sq m of retail space. Nine new shops were added at Sai Ying Pun Station in March 2015, while renovation works were underway at Fo Tan, Yau Ma Tei, Tseung Kwan O, Lo Wu and Hung Hom stations, with a temporary loss of 186sq m of retail space.
Advertising revenue in the first half of 2015 rose +2.3% to HK$497 million (US$64.1 million), with the number of advertising units in stations and trains reaching 45,284. MTR said new 40″ digital escalator panels had been introduced in the first half of the year, replacing existing 32″ models.
Overall, the group posted an increase in total revenue of +3.8% to HK$20.21 billion (US$2.6 billion). Revenue excluding Mainland of China and international subsidiaries increased +6.9% to HK$14.03 billion (US$1.8 billion).
MTR Chief Executive Officer Lincoln Leong Kwok-kuen said that future results of its station retail business would be affected by rental renewals and reversions, which would depend on market conditions.
Nevertheless, further economic growth in Hong Kong in the second half of 2015, as well as the full year effect of the opening of the Western extension of MTR’s Island Line, would drive continued growth in patronage of its transport business, he said.
