The MTR Corporation on Thursday reported a 77 percent jump in first-half profit thanks to strong earnings from several property development projects.

The company posted a net profit of HK$4.7 billion despite losses in its Hong Kong rail business as the fifth wave of Covid infections led to a drop in passenger numbers.

The local rail business suffered a loss of nearly HK$2.8 billion, but a HK$7.7 billion profit from property development helped the railway firm stay in the black.

Jacob Kam, the corporation's CEO, said passenger numbers fell by almost 12 percent in the first six months from the same period last year.

"The pandemic has severely affected the recurrent business, income from the stations and shopping malls," he told a press conference. "The diversified business portfolio, coupled with the rail plus property development model, plays a vital role in maintaining our financial stability and the long-term sustainable development of our corporation."

MTR officials also said an economic environment of rising interest rates and inflation would affect the company's business. But finance director Herbert Hui pointed out that a majority of the firm's debt is on fixed interest rates. He also said the fare adjustment mechanism, which takes into account changes in inflation and wages, may help to offset some of the negative effects of higher rates.

Kam meanwhile pointed out that the extension projects of the Tuen Ma Line and Tung Chung Line are set to begin next year.

He also said the upgrade of the signalling system of its four urban lines is still in progress, with no timetable yet when they will come on line after years of delay following a train crash during an overnight test of the system in 2019.

"The trackside hardware replacement works have been going on smoothly. However, the safety assurance process for the new signalling software is taking much longer than expected... We are looking at possible alternatives to try to accelerate this process in a safe manner," he said.