Swire Pacific underlying profit jumps 12% to HK$4.8b

Thanks to property, aviation, and beverages divisions.

Swire Pacific’s consolidated profit attributable to shareholders for the first half of 2015 was HK$7,977 million, HK$1,493 million higher than for the first half of 2014.

According to a release from Swire Pacific, further, underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, increased by HK$503 million or 12% to HK$4,833 million.

The increase in underlying profit reflects higher profits from the Property, Aviation and Beverages Divisions and profits on the sale of two units at OPUS HONG KONG, offset in part by a loss from the Marine Services Division and lower profits from the Trading & Industrial Division.

Here’s more from Swire Pacific:

Property Division
 • Attributable underlying profit was HK$3,208 million, an increase of 5% compared with the first half of 2014.
 • Property investment benefited from higher rents from office properties in Hong Kong and from retail properties in Mainland China.
• Occupancy rose at Pacific Place offices and there were positive reversions at Taikoo Place and Cityplaza offices.
• There were lower retail sales at Pacific Place mall but a better performance at Cityplaza, following an enhancement project and changes to the tenant mix.
• Property trading profits arose mainly from the sale of 96 units at the AREZZO residential development in Hong Kong.
• The hotel results were weaker than in the first half of 2014, in particular in Hong Kong.

Aviation Division
• Attributable profit from the Aviation Division was HK$1,063 million in 2015, compared with a profit of HK$357 million in the first half of 2014.
• The Cathay Pacific group’s attributable profit was HK$887 million, compared with an attributable profit of HK$156 million in the first half of 2014.
• Cathay Pacific and Dragonair benefited from generally stronger passenger and cargo demand and lower fuel prices (partially offset by hedging losses). However, yield remained under pressure.
• Air China’s results improved significantly, reflecting lower fuel prices, strong passenger demand and lower exchange losses on the Renminbi.
• The HAECO group’s attributable profit was HK$190 million, 10% lower than in the first half of 2014.
• 2% fewer airframe services manhours were sold in Hong Kong, Xiamen and the USA.
• HAESL and SAESL contributed lower profits due to fewer engines being overhauled.

Beverages Division
• Attributable profit from the Beverages Division increased by 13% to HK$456 million.
• Overall sales volume rose by 9% to 551 million unit cases. • Volumes rose in all territories and raw material costs were generally lower.
• Mainland China sales volume increased by 6% but profits were affected by lower juice sales.
• The USA business benefited from new territories assumed in Colorado in May 2014
• The acquisition of minority interests from CITIC in Mainland China businesses was announced in July. It is subject to regulatory approval.
• A letter of intent was signed in April with The Coca-Cola Company to assume additional territory in Arizona.