Swire Pacific records $3.9b loss as pandemic hits Cathay Pacific

The airline is expected to incur recurring loss in the first half of 2021.

International conglomerate Swire Pacific Limited reported a $3.96b underlying loss in 2020 as the COVID-19 pandemic arrested its businesses.

The 2020 underlying loss is a huge drop from the $17.79b underlying profit generated in 2019.

“The deterioration in the results was primarily due to a significant reduction in profits on the sale of investment properties and to losses (including impairment charges and restructuring costs) at Cathay Pacific,” chairman Merlin Swire said.

Cathay Pacific had just reported a $21.6b worth of loss in 2020, down from the $1.69b profit in the previous year.

Further, Swire Pacific said the 2020 recurring underlying loss was recorded at $609m, compared with the $7.22b profit in 2019. This is expected to continue within the first half of 2021.

“We continue to face significant challenges and uncertainties in 2021 as a result of COVID-19,” Swire said.

“The effect on the Aviation Division, particularly Cathay Pacific, is severe. We expect to incur a recurring loss in the first half of 2021. But in the long run we remain confident of Swire Pacific’s prospects,” he added.

Operations of the Hong Kong flagship carrier Cathay Pacific were hit hard by the pandemic as it placed countries into a lockdown, restricting cross-border travel.

The pandemic affected the HAECO Group, resulting in an attributable profit of $96m in 2020 from $825m in 2019; the Swire’s Property Division was also affected due to higher losses from hotels.

Swire Pacific Offshore continues incurring losses, including impairment charges.

Meanwhile, Swire Coca-Cola posted a $2.07b recurring profit in 2020 despite slow down in the start of 2021.

“The profits of Swire Coca-Cola grew robustly in 2020. Business was adversely affected by COVID-19 in the early part of the year, but recovered well outside Hong Kong, particularly in the Chinese mainland,” Swire said.