Hong Kong rail operator MTR was already reeling from its worst financial performance in 2019, after months of protests. Now, with the coronavirus outbreak that's spread throughout the world, 2020 looks to be another challenging year — but its CEO is confident his company will be "resilient" in the coming months.
"2019 has been the most challenging year in the 40 years history of MTR ... our transportation business suffered severely under the social unrest and of course, with the recent coronavirus outbreak," Jacob Kam, CEO of MTR Corporation, told CNBC's "Squawk Box Asia" on Friday.
However, Kam added: "We believe, overall, our business is resilient, a lot of our business are to do with the essential day to day economic activities of the people of Hong Kong, so we think we have a balanced portfolio."
MTR's net profit was down by 26% in 2019, at $1.53 billion, even though total revenue jumped 1.1%. Based on preliminary accounts, the impact of the coronavirus outbreak in the first 2 months of 2020 also caused net profit to tumble by 1.3 billion Hong Kong dollars ($167 million), MTR said in a press statement.
Entering into 2020, Hong Kong — like the rest of the world — faced fresh challenges from the COVID-19 outbreak, which has killed more than 3,600 and sickened at least 106,000 people. As of Mar. 10, Hong Kong recorded 115 confirmed cases of the coronavirus disease and three deaths, according to latest situation report by the World Health Organization.
In the second half of 2019, due to the social unrest which saw train stations vandalized and services suspended, MTR's passenger numbers fell by over 11%. Despite some recovery in January's numbers, the coronavirus outbreak has now become a double whammy.
MTR saw a further 40% to 50% reduction in ridership since the virus outbreak.
As people regained confidence to resume work and go out on leisure trips, there appear to be a recovery in passenger numbers, said Kam. However, he qualified that it was still "early days."
As part of relief measures to help Hong Kongers through the difficult times, MTR has introduced a fare freeze for the rest of the year, as well as rent cuts for small and medium-sized companies.
In a bid to keep Hong Kong moving, the rail-operator has also maintained regular train services — except for some "small adjustments" made to non-peak and low passenger volume train times, Kam added.
Rather than to suspend lines in the current outbreak, MTR is also looking at introducing new lines, according to Kam.
"We have opened new lines in mainland China, Australia, Macau and of course, in Hong Kong in recent months. And we are going to open new lines and we have new business in the coming years."