Announcing the financial results today, MTR Corporation Chief Executive Officer Chow Chung-kong said the company's financial results last year reflect the significant impact of the rail merger, despite the less than favourable economic climate due to the global financial turmoil.

Operating profit from railway and related businesses before depreciation rose 57.7% to $9.325 billion. The property development profit mainly came from sale of The Capitol at Lohas Park, The Palazzo in Sha Tin and inventory units at Harbour Green and The Arch.

"The rail merger was successfully implemented, and we have delivered on all of the promises we made to our passengers and stakeholders," Mr Chow said, adding the implementation of the pledged fare reduction has benefited 2.8 million passengers.

"In addition, we have achieved synergies of over $350 million in 2008, ahead of schedule. The rail merger has made MTRC a stronger company with confidence to face the future."

The net profit attributable to equity shareholders, excluding investment properties revaluation and related deferred tax, was $8.185 billion. Including investment properties revaluation and related deferred tax, the net profit attributable to equity shareholders was $8.284 billion, down 45.4% on a year earlier.

Reported earnings per share were $1.45 before investment property revaluation, and $1.47 after such revaluation. The corporation's board of directors has declared a final dividend of 34 cents per share. Combined with the 14 cents interim dividend, the full-year dividend is 48 cents, up 6.7% on 2007.

On the operational front, total patronage on the integrated MTR system - rail and bus passenger services - grew 56.6%, to 1.485 billion, due to the rail merger. The corporation's overall share of the franchised public transport market rose to 42.7% from 41.6%, with the share of cross-harbour traffic rising from 62.5% to 63.6%.

The company's domestic service - including the MTR lines and the Kowloon-Canton Railway lines - recorded a total patronage of 1.205 billion, up 31.6% on a year earlier. Patronage for cross-boundary service at Lo Wu and Lok Ma Chau rose 1.4%, to 93.4 million.

The average fare per passenger for the domestic service fell 3% to $6.58, due to a one-off fare cut on the rail merger day. For cross-boundary service, the average fare was $24.45, down 0.2% on 2007.

Passengers using the Airport Express rose 4.2%, to 10.6 million, due to an increase in its market share. Fare revenue was $673 million, up 2.7% on 2007, and the average fare per passenger dropped 1.4%, to $63.47.

Cautious outlook

Looking ahead, Mr Chow said the corporation's growth business will see a number of milestones this year, including the opening of the Tseung Kwan O Line extension in mid-2009 and the Kowloon Southern Link in the second half.

With the Government's approval last year for the planning and design of the Sha Tin to Central Link, the Kwun Tong Line Extension to Whampoa and the Guangzhou-Shenzhen-Hong Kong Express' Hong Kong section, together with the West Island Line and South Island Line (East), the corporation has five new lines in development.

"Economic conditions globally and in Hong Kong remain uncertain with forecasts of negative economic growth in Hong Kong for 2009. Given these conditions, we are taking a cautious approach to 2009," he said.

A fare review in July will be subject to the provisions of the fare-adjustment mechanism.