Urban Renewal Authority 2018-19 Annual Report

74 MANAGEMENT DISCUSSION AND ANALYSIS Financial Review (I) Review of 2018/19 Results (a) Revenue The revenue for the year ended 31 March 2019 was $3,423 million, which comprised upfront payments from tendered projects, share of surplus from joint development projects and proceeds from sale of flats at Kai Tak. The amount was lower than the revenue of $13,868 million in 2017/18 by $10,445 million. The upfront payments in 2018/19 of $2,833 million were significantly lower than that of 2017/18 as there were only two projects tendered during the year, namely Tung Chau Street/Kweilin Street and Castle Peak Road/Un Chau Street with a total site area of 3,540 m 2 , compared to three tendered projects in 2017/18 with a total site area of 4,755 m 2 and including a commercial/office/hotel development in Central area which brought in an upfront payment of $10 billion. The share of sales proceeds from joint development projects of $445 million in 2018/19 (2017/18: $1,128 million) was revenue from projects where the sales proceeds exceeded the thresholds stipulated in the development agreements. The decrease in the share of sales proceeds reflected that the majority of the residential units of the projects had been sold in prior years, and only a small number of unsold flats were left for proceeds sharing upon sale. The revenue from sale of properties of $144 million mainly related to the proceeds of $139 million from sale of 14 residential flats at Kai Tak (2017/18: $157 million for 18 flats) and these flats were sold at prevailing market price. (b) Other income Of the $536 million (2017/18: $451 million) in other income for 2018/19, $436 million (2017/18: $320 million) was interest income from bank deposits and fixed income investment products, with an average yield of 2.31% p.a. (2017/18: 1.60% p.a.). The higher average yield reflected the increase in interest rates in the money market during the year. Other income also included rental income from certain properties retained by the URA. (c) Administrative expenses Administrative expenses for 2018/19 of $449 million (2017/18: $423 million) mainly covered staff costs, accommodation costs and office expenses. Cost control measures were implemented whenever possible to minimise administrative expenses. To cope with the expansion of urban renewal activities, including the increased level of rehabilitation works arising from the new subsidy schemes, including the Operation Building Bright 2.0, the Fire Safety Improvement Works Subsidy Scheme and the Lift Modernisation Subsidy Scheme, the staffing level was increased from 501 at 31 March 2018 to 517 at 31 March 2019. Of the 517 staff, 15 (31 March 2018: 15) were employed on contracts of less than three years.