MTR Corporation 2008 Interim Results 5 Aug 2008 MTR Corporation Limited 2008/8/5 Forward-looking statements Certain statements contained in this presentation may be viewed as forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward- looking statements. MTR Corporation Page 2 Results highlights and business overview MTR Corporation Limited 2008/8/5 Solid First Half Achievements Success of Merger demonstrated in strong financial results Strong Recurring businesses see significant increases in Revenue and EBITDA Financial Net cash generated in 1H08 over HK$4.2 billion Results Successful pre-sales of the Capitol and Palazzo; profit booking dependent only on Occupation Permit issuance 6 new lines being developed 3 new approvals: Significant Shatin to Central Link (SCL), Kwun Tong Line Network Extension (KTE), and Express Rail Link (XRL) Extension Good progress on Kowloon Southern Link (KSL) , West Island Line (WIL) and South Island Line East (SIL(E)) MTR Corporation Page 4 Financial performance (HK$m) 1H1H 20082008 1H1H 20072007 ChangeChange TotalTotal revenuerevenue 8,527 4,852 75.7% EBITDAEBITDA 4,796 2,797 71.5% EBITDAEBITDA marginmargin 56.2% 57.6% 1.4% pt Property Property 348 1,664 79.1% developmentdevelopment profitprofit Underlying profit (excl post-tax Underlying profit (excl post-tax 2,731 2,050 investmentinvestment propertyproperty revaluation)revaluation) 33.2% Reported net profit Reported net profit 4,689 4,071 attributableattributable toto eequityquity shareholdersshareholders 15.2% ReportedReported EPSEPS (HK$)(HK$) 0.83 0.73 13.7% Underlying businesses Underlying businesses 0.49 0.37 EPSEPS (HK$)(HK$) 32.4% InterimInterim dividenddividend perper shareshare (HK$)(HK$) 0.14 0.14 MTR Corporation Page 5 Business Review - Railway MTR Corporation Limited 2008/8/5 Fare Revenue (HK$ in M) 0.9% 5,542 5,592 MTR 1H 2007 KCRC vs 1H2007 pre-merger MTR network % .2 vs 1H2007 pre-merger combined 2 7 3,247 network (MTR + KCRC) 1H2007 1H2008 MTR Corporation Page 7 Patronage Domestic Service (1) (m) Airport Express (m) 5.2 4.8 3% 1% 4. 8. 560.9 (2) 585.2 1H2007 1H2008 .3% 429.3 36 Cross Boundary Service (m) 43.9 9% 46.0 1H2007 1H2008 4. MTR vs 1H2007 pre-merger MTR network 1H 2007 KCRC vs 1H2007 pre-merger combined network (MTR + KCRC) 1H2007 1H2008 1. Domestic Service in 1H08 include Tsuen Wan, Island, Kwun Tong, Tung Chung, Tseung Kwan O, Disneyland Resort as well as East Rail Lines (excluding Cross Boundary), Ma On Shan Line and West Rail Line with effect from 2 Dec 07 2. Excluded 28.6m passengers who interchanged between the MTR and KCRC networks. Before the Rail Merger, passengers who interchange between MTR and KCRC lines would have been counted as one passenger under respective MTR and KCRC systems. With the Rail Merger such interchange passenger is only counted as one passenger MTR Corporation Page 8 Average fare Average Fare – Domestic Service (1) Average Fare – Airport Express HK$64.40 HK$64.72 5% 0. 4.7% HK$6.90 (2) HK$6.58 1H2007 1H2008 HK$6.84 3.8% Average Fare – Cross Boundary HK$24.51 HK$24.27 1 .0% 1H2007 1H2008 MTR vs 1H2007 pre-merger MTR network 1H 2007 KCRC vs 1H2007 pre-merger combined 1H2007 1H2008 network (MTR + KCRC) 1. Domestic Service in 1H08 include Tsuen Wan, Island, Kwun Tong, Tung Chung, Tseung Kwan O, Disneyland Resort as well as East Rail Lines (excluding Cross Boundary), Ma On Shan Line and West Rail Line with effect from 2 Dec 07 2. Excluded 28.6m passengers who interchanged between the MTR and KCRC networks. Before the Rail Merger, passengers who interchange between MTR and KCRC lines would have been counted as one passenger under respective MTR and KCRC systems. With the Rail Merger such interchange passenger is only counted as one passenger MTR Corporation Page 9 Market Share Hong Kong Franchised Public Transport Green Green minibuses minibuses 14.4% 14.8% Tram & Tram & ferries Buses Buses ferries 3.5% 41.5% 40.1% 3.5% MTR 25.0% MTR 41.6% KCRC 15.6% 1H2007 Jan – May 2008 Source: The Transport Department MTR Corporation Page 10 Business Review - Station commercial and rail related businesses MTR Corporation Limited 2008/8/5 Station commercial and rail related businesses Station commercial & rail related businesses: Merger created a step increase in scale, scope and profitability HK$1,448m* vs pre-merger combined network Advertising 97%97% 29%29% ¾Strong growth from buoyant 1H 2007 vs 1H2007 pre-merger MTR network advertising market and higher HK$m patronage 1H 2008 vs 1H2007 pre-merger combined network (MTR + KCRC) 1H 2007 KCRC ¾Innovative advertising formats introduced 65% 272% Station Retail 774 ¾Increased rentals from Retail and Duty Free shops ¾Total kiosks area at 52,727 sq m 469 20% 40% Telecommunications 346 ¾Negative impact from 3G/2G cannibalization 288 1.5% 17% 22% External Consultancy 131 129 248 ¾Reduction of consultancy 208 82 64 revenue as the result of a more 110 focused strategy Advertising Station Retail Telecom Consultancy *Excludes Services to KCRC revenue of $197m MTR Corporation Page 12 Business Review - Property and other businesses MTR Corporation Limited 2008/8/5 Property development Major profit contributors: Property development profit • Disposal of properties held for HK$348m sale include The Arch and Harbour Green • Deferred income from Coastal Skyline, Caribbean Coast and Elements Deferred Pre-sales of The Capitol was income successfully completed with all Disposal of 38% units sold properties held for sale Pre-sales of The Palazzo in May 62% with over 80% sold Profit to be recognized upon issuance of Occupation Permits Che Kung Temple awarded in 1H 2008 April MTR Corporation Page 14 Property rental and management Property rental & management revenues: HK$1,222m 54.7%54.7% Growth driven by Elements vs. pre-merger Phase 1 and favourable rental 30% combined network 30% reversions MTR vs 1H2007 pre-merger MTR network 1H 2007 KCRC vs 1H2007 pre-merger combined Average of 21% increase on network (MTR + KCRC) rental reversion at shopping 1,222 HK$m centres % 103 30 Management Income Investment portfolio at Jun 08 938 attributable share of lettable floor area amounted to 252,086 sq m 80 Management 1,119 Income Retail: 12 shopping centres Rental revenue 7% 4. totalling 200,668 sq m 710 5 Rental revenue Office: 2 offices totalling 41,215 sq m 1H2007 1H2008 Others: 10,203 sq m MTR Corporation Page 15 Other businesses 17.4M cards in circulation with average daily transaction value of HK$86.2M up to Jun 08 Octopus MTR’s share of net profit amounted to HK$78M, up 85.7% Contributed revenue of HK$68M Over 770k guests carried for the first six months of Ngong Ping 360 2008 A number of attractions and events launched to promote usage MTR Corporation Page 16 Growth opportunities MTR Corporation Limited 2008/8/5 New projects in Hong Kong Express Rail Link Shatin to Central Link Kwun Tong Line Extension Kowloon Southern Link West Island Line South Island Line (E) MTR Corporation Page 18 New projects in Hong Kong – “Rail +Property” Model Kwun Tong Line Extension South Island Line (E) MTR Corporation Page 19 New projects in Hong Kong – Capital Grant by Government West Island Line MTR Corporation Page 20 New projects in Hong Kong – Service Concession Express Rail Link Shatin to Central Link Kowloon Southern Link MTR Corporation Page 21 New projects in HK - Service Concession - Shatin-to-Central Link Lo Wu Lok Ma Chau East West Corridor East Rail Line Wu Kai Sha Ma On Shan Line North South Corridor Tuen Mun Tai Wai Tai Wai West Rail Line Diamond Hill Diamond Hill Nam Cheong SCL(Tai Wai to Hung Hom Kowloon Southern Link Section) Hung Hom Hung Hom Admiralty Admiralty SCL (Cross Harbour Section) MTR Corporation Page 22 New projects in Hong Kong – Service Concession Express Rail Link MTR Corporation Page 23 Growth outside of Hong Kong Mainland of China Europe Beijing Metro Line 4 London (LOROL) Construction progressing Cost based operating concession for 7 Target completion by end 2009 years started Nov 07 Financial and operating performance Shenzhen Metro Line 4 on target Progress being made in NDRC approval Other potential projects Submitted bid in Hangzhou Continue to pursue opportunities in Shenyang, Suzhou and Wuhan MTR Corporation Page 24 Financial Results MTR Corporation Limited 2008/8/5 Income statement (HK$m) 1H 2008 1H 2007 % change Fare revenue 5,592 3,247 72.2 Non-fare and rental and management income 2,935 1,605 82.9 Turnover 8,527 4,852 75.7 Operating expenses (3,731) (2,055) (81.6) EBITDA 4,796 2,797 71.5 Property development profit 348 1,664 (79.1) Total operating profit 5,144 4,461 15.3 Depreciation & amortisation (1,517) (1,348) (12.5) Merger related expenses (24) - NA Interest and finance charges (1,078) (654) (64.8) Investment properties revaluation gain 2,080 2,450 (15.1) Share of profit of non-controlled subsidiaries & associates 91 42 116.7 Profit before tax 4,696 4,951 (5.2) Taxation (8) (879) 99.1 Reported net profit attributable to equity shareholders* 4,689 4,071 15.2 Reported earnings per share (HK$) 0.83 0.73 13.7 Profit from underlying businesses (excl. inv. property revaluation net of deferred tax) 2,731 2,050 33.2 Underlying businesses EPS (HK$) 0.49 0.37 32.4 Interim dividend per share (HK$) 0.14 0.14 * Exclude minority interest of HK$1 million MTR Corporation Page 26 Segmental income statement of underlying businesses (HK$m) 1H2008 1H2007 Railway and related businesses 1,265 206 Property ownership, management and 913 615 other businesses Property developments 347 1,638 Tax and others (1) (2) 206 (409) Underlying net profit attributable to equity 2,731 2,050 shareholders Note: All segmental incomes shown are pre-tax profits.