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Financial Performance


The capital intensive nature of our industry has traditionally made it difficult for railway companies to secure the financing that they need to operate and grow. In this context, it is crucially important that we are able to deliver financial returns for our shareholders while also generating steady revenue streams to finance asset maintenance and service enhancements, construct new railways, and to do so in a way that is consistent with corporate responsibility.

We use a number of proven financing models such as the Rail plus Property model, Public-Private Partnerships and operating franchises to support delivery of high quality railway services over the long term. The Rail plus Property model and fares for Hong Kong transport operations are two particularly important components of our financial performance that are highlighted in this section.

In other sections of this report, you can read about how we invest continuously to maintain, improve and expand our services for customers, and learn about our plans for construction of new railway lines.

Financial Performance Highlights

In 2014, we recorded satisfactory financial performance in our businesses. Total revenue for 2014 grew by 3.7 per cent to HK$40,156 million. Operating profit before Hong Kong property developments, depreciation, amortisation and variable annual payments also increased by 7.1 per cent to HK$15,423 million. Excluding our Mainland of China and international subsidiaries, revenue increased by 8.1 per cent and operating profit rose by 7.4 per cent, while operating margin decreased slightly by 0.3 percentage point to 53.1 per cent.

Total revenue from Hong Kong transport operations in 2014 was HK$16,223 million, a 7.0 per cent increase over 2013. Operating costs of the Hong Kong transport operations increased by 9.3 per cent to HK$9,236 million, resulting in a 4.0 per cent rise in operating profit for this business to HK$6,987 million, with an operating margin of 43.1 per cent.

Total Hong Kong fare revenue in 2014 was HK$16,066 million, a 7.0 per cent increase over 2013. Of this total, the Domestic Service accounted for HK$11,318 million or 70.4 per cent. The average fare per passenger on our Domestic Service increased by 2.6 per cent to HK$7.31. This increase was offset by fare promotions that were provided to passengers throughout the year.

Consolidated data on financial and economic performance is available in the Performance Metrics section of this report.


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Please also refer to the Annual Report to learn more about the financial performance of the Company in 2014.


Did you know?


In 2014, we spent over HK$6 billion to maintain and upgrade our railway network in Hong Kong. This amount is expected to increase significantly in future years as our network continues to mature.


Financial Performance Benchmarking

According to CoMET Benchmarking, we consistently outperform all other participating metros on financial performance measured by capacity provision and utilisation. This result reflects some attributes of the situation in Hong Kong, such as high density of population, as well as the success of our Rail plus Property model, which allows us to operate on a self-sustaining basis while also maintaining fares at an affordable level.