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Kowloon-Canton Rail (BF20)

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Thursday 02 August, 2001

Kowloon-Canton Rail

Interim Results

Kowloon-Canton Railway Corporation
2 August 2001

                                                              1 August 2001 
Re: Kowloon-Canton Railway Corporation ('KCRC')
    Interim Financial Results
    For the Half-year ended 30 June 2001 (Unaudited)
 
 
           KCRC's profit goes up by 14.7% in the first half of 2001

 
The Kowloon-Canton Railway Corporation (KCRC) continues to enjoy steady growth
in the first six months of 2001, said KCRC Chairman and Chief Executive K Y
Yeung in announcing the 2001 half-yearly financial results.

Mr Yeung said total East Rail ridership during the first half of the year grew
to 143 million passenger trips, 1.4% over the same period last year. Light Rail
ridership, at 58 million passenger trips, was the same as that last year.

He said in parallel with the growth rate of East Rail ridership, fare revenues
grew by 1.68% to $1,932 million. Total revenues went up by 1.74% to $2,342
million. 

Mr Yeung said, 'In contrast to this modest growth, however, retained profits
went up by 14.7% to $1,189 million, compared with $1,037 million last year. This
was due in part to increased transport, commercial, investment and property
earnings, and in part to a continuing decline in operating costs.'

He noted that after public consultations, KCRC decided to introduce a weighted
average fare increase of 3.1% with effect from 1 April 2002.

Mr Yeung said West Rail, Phase I, and the East Rail Extensions had progressed
steadily. More than 80% of West Rail's civil engineering works had been
completed by mid-year. All major milestones had been reached on time or ahead of
schedule, and operational readiness planning had begun.  

'There are indications that West Rail will be able to start running a few months
ahead of its target opening date of December 2003,' he said.

Civil engineering works on the East Rail Extensions were also on target. 
Construction of the 11.4 kilometre Ma On Shan Rail viaduct began in February,
while construction of the one-kilometre extension of East Rail to Tsim Sha Tsui
began in April.

The Corporation also submitted proposals for the Kowloon Southern Link and a bid
for the Shatin to Central Link in July.  KCRC is now planning to build the
former and waiting for the Government to make a decision on the award of the
latter. 
 
Note to Editors:

The 2001 half-yearly financial results will be faxed and posted on KCRC's
website www.kcrc.com.


                   Kowloon-Canton Railway Corporation
           Consolidated Profit and Loss Account - HK$ million
                for the half-year ended 30 June (Unaudited)


Year-ended                                              Half-year ended 
31 Dec 2000                                      30 Jun 2001     30 Jun 2000
                                                          (Unaudited)

      3,906    Fare revenue                            1,932           1,900    

        825    Freight, rental, advertising and          410             402
               other revenue

      4,731    Total revenue                           2,342           2,302

      2,830    Operating costs                         1,370           1,399

      1,901    Operating profit before net investment    972             903
               income

        302    Net investment income                     186             127

      2,203    Profit after net investment income      1,158           1,030
 
         87    Profit on property development             24               7

         (1)   Share of profit/(loss) of associate         7               -

      2,289    Profit before taxation                  1,189           1,037

          1    Taxation                                    -               -

      2,288    Profit after taxation                   1,189           1,037

         87    Transfer to development reserve             -               -

      2,201    Retained profit for the period          1,189           1,037    
   


   As at                                            As at          As at 
31 Dec 2000                                      30 Jun 2001     30 Jun 2000
                                                          (Unaudited)

               Non-current assets

     13,236    Fixed assets                           12,947          13,151
 
     16,491    Construction in progress - 
                     West Rail, Phase 1               21,035          12,952
 
        909          Others                            1,520             827

      1,104    Deferred expenditure -
                     East Rail Extensions              2,682             598

         91    Property under development                330              91

          -    Amount due from the Government              -             336

         16    Interest in associate                      23              17

        602    Loan to subsidiary                        858               -

     27,789    Investments in securities              29,555          29,036 

     10,181    Current assets                         12,328          11,351

     (4,454)   Current liabilities                    (5,940)         (4,050)

      5,727    Net current assets                      6,388           7,301

   (17,064)    Non-current liabilities               (17,235)        (16,692)

    48,901     NET ASSETS                             58,103          47,617

    31,120     Share capital                          39,120          31,120

     6,417     Development reserve                     6,417           6,330

       242     Investment property revaluation reserve    242             231

        16     Investment revaluation reserve             29             (6)

    11,106     Retained profits                       12,295           9,942

    48,901     CAPITAL AND RESERVES                   58,103          47,617   


                       Kowloon-Canton Railway Corporation
                                Key Statistics
                       For the half-year ended 30 June 2001

Year-ended                                              Half-year ended 
31 Dec 2000                                      30 Jun 2001     30 Jun 2000
                                                          
               East Rail

       288     Total number of passengers (million)      143             141

       789     Average number of weekday passengers      790             770
                (thousands) 

       8.8%    Proportion of total franchised public     8.7%            8.7%
               transport boarding in Hong Kong

               HK$ per passenger carried

      11.65    Fare revenue                             11.62           11.58

       4.55    Operating costs excluding depreciation    4.31            4.48

       7.10    Operating result                          7.31            7.10

               Light Rail

       118     Total number of passengers (million)        58              58

       329     Average number of weekday passengers       327             328
                (thousands)        

       3.6%    Proportion of total franchised public      3.5%            3.6%
               transport boarding in Hong Kong 

               HK$ per passenger carried

       3.59    Fare revenue                               3.59            3.59

       3.86    Operating costs excluding depreciation     3.84            3.81

      (0.27)   Operating result                          (0.25)          (0.22)

Certain comparative statistical figures have been restated to conform to current
period's presentation.

Note:

The financial information set out above does not constitute the Corporation's
statutory financial statements. The financial information for the 6 months ended
30 June 2001 and 2000 is unaudited, and that for the year ended 31 December 2000
is derived from the Corporation's statutory financial statements for that year,
which contained an unqualified auditor's report.

 
                           Chairman's Statement

    KCRC continued to enjoy steady growth in the first six months of 2001

Total East Rail ridership during the first half of the year grew to 143 million
passenger trips, a gain of 2 million or 1.4% over the same period last year. The
average weekday patronage on East Rail was 790,000 passenger trips, 20,000 more
than last year's average. Light Rail ridership, at 58 million passenger trips,
was the same as that last year.

In parallel with the growth rate of East Rail ridership, fare revenues grew by
1.68% to $1,932 million, compared with $1,900 million for the same period the
year before. Total revenues were $2,342 million, compared with $2,302 million
last year, reflecting an increase of 1.74%. In contrast to this modest growth,
however, retained profits went up by 14.7% to $1.189 million, compared with
$1,037 million last year. This was due in part to increased transport,
commercial, investment and property earnings, and in part to a continuing
declined in operating costs.

In June, the Corporation launched public consultations on its intention to end a
three-year moratorium on fare adjustments, by proposing a weighted average fare
increase of 3.1%. Following consultations, the Corporation decided to introduce
this fare increase with effect from 1 April 2001.

West Rail, Phase 1, and the East Rail Extensions have progressed steadily. More
than 80% of the West Rail's civil engineering works had been completed by
mid-year. The tunnels were 95% finished, the viaducts 75% erected and the
station structures 50% built. All major milestones had been reached on time or
ahead of schedule, and operational readiness planning had begun. There are
indications that West Rail will be able to start running a few months ahead of
its target opening date of December 2003. Civil engineering works on the East
Rail extensions were also on target. Construction of the 11.4 kilometre Ma On
Shan Rail viaduct began in February, while construction of the one-kilometre
extension of East Rail to Tsim Sha Tsui began in April.

Of the six new railway corridors identified in the Government's Railway
Development Strategy 2000, the Corporation submitted proposals for the Kowloon
Southern Link and a bid for the Shatin to Central Link in July. KCRC is now
planning to build the former and waiting for the Government to make a decision
on the award of the latter.

K Y Yeung
Chairman and Chief Executive
2 August 2001