MTR (00066) to make HK$2.43bn provision to interim account

   In relation to the Shatin to Central Link project, the MTR Corporation Limited (00066) announced that the Hong Kong government has accepted the company's recommendation that the Tuen Ma Line should open in phases, with the first phase involving the opening of commercial service on the Tuen Ma Line from Tai Wai Station to Kai Tak Station targeted to occur in the first quarter of 2020.
  In order to progress the Shatin to Central Link project and to facilitate the opening of commercial service on the Tuen Ma Line from Tai Wai Station to Kai Tak Station in the first quarter of 2020, the company will fund, on an interim and without prejudice basis, the costs arising from the Hung Hom incidents and certain costs associated with the phased opening of the Tuen Ma Line, whilst reserving its position as to the ultimate liability for such costs. Currently, the company's best estimate of such costs is around HK$2 billion in aggregate. In light of this, the company will make a provision of HK$2 billion in its consolidated profit and loss account for the six months ended 30 June 2019. This amount does not take into account any potential recovery from any other party.
  Together with the provision of approximately GBP43 million (being approximately HK$430 million) in relation to First MTR South Western Trains Limited (a joint venture in which the company holds a 30% shareholding) that was announced before, the total charge to the company's consolidated profit and loss account in respect of these two matters for the six months ended 30 June 2019 amounts to HK$2.43 billion. Such total charge is equivalent to approximately 52% and 22% of the consolidated profit arising from the underlying businesses of the company and its subsidiaries for the six months ended 30 June 2018 and the year ended 31 December 2018 of HK$4,648 million and HK$11,263 million.