Railway operator and property developer MTRC (0066) will be relying on sales of inventory flats to prop up the contributions from its property development business for the 2013 financial year.
“Based on the existing construction programme, we do not expect to book profits relating to any of our current property development projects that are under development,” MTRC deputy chief executive officer Lincoln Leong Kwok-kuen said.
“However sales of inventory units that we have on our books will contribute to property development bookings in 2013.”
The inventory units are mostly located at The Riverpark project at Che Kung Temple Station with some remaining units at the Palazzo in Fo Tan.
Its current property projects under development include three sites at Tsuen Wan West Station and three sites at Tsuen Wan West Station(North).
On upcoming tenders for property development for 2013, the company said it would, subject to market conditions, tender out the Tai Wai Station site, the Tin Shui Wai Light Rail site, and another site at LOHAS Park Package 4.
On West Rail where the MTRC acts as agent for the government owned KCRC, it will tender out the Long Ping Station (South Site).
Two of these tenders will in fact be replays.
Tai Wai Station site was tendered out in May last year but the company decided not to accept any of the tenders received.
The Tin Shui Wai Light Rail site was tendered out in January this year but saw no offers at all.
Property director David Tang Chi-fai said the company would be reviewing the two sites based on the market response.
Tang said the Tin Shui Wai site was a special case as it involved more work such as relocating existing facilities, laying new rail tracks and piling for a podium.
Asked whether it would reduce the size of the Tai Wai site before tendering out again, Tang said there were technical difficulties in doing so as the site was at a location where the East Rail line, the Ma On Shan line and the future Shatin-Central Link all meet.
In 2013 the company expects to pre-sell about 5,000 units from projects at Tsuen Wan TW7, Austin Road and in Tuen Mun Lung Mun site.
For the year to 31 December 2012, the company which is 77 percent owned by the government recorded a 13 percent drop in profit attributable to shareholders to HK$13.53 billion compared with a year ago despite total revenue climbing 6.9 percent to HK$35.74 billion.
The company said while profit attributable to shareholders arising from its underlying businesses such as railway operations went up 13.3 percent to HK$7.07 billion, the profit arising from property developments plunged 34.4 percent to HK$2.7 billion.
The profit form property development came mainly from pre-sales at The Riverpark project of which over 83 percent of units have been sold.
The balance of the profit attributable to shareholders came from the revaluation of its investment properties that came to HK$3.76 billion compared with HK$5.09 billion recorded for 2011.
The company declared a final dividend of 54 HK cents giving a total dividend of 79 HK cents, representing an increase of 3.9 percent year on year.
On its railway expansion projects, the company reported that the West Island Line, the South Island Line (East), the Kwun Tong Line Extension and Express Rail Link were respectively 65 percent, 30 percent, 31 percent and 30 percent complete.
Asked about progress of discussions on the Fare Adjustment Mechanism which is used to calculate its railway fares, chief executive officer Jay Walder said the mechanism was open and transparent and there was provision for a review every five years with the government which it was doing now.
“The discussions have been ongoing with government. We expect them to be concluded by the end of this month,” Walder said.
He declined to give details of the discussions.