Swire Pacific (19) H2 2023 earnings summary

Executive summary

• Underlying profit reached HK$36.2bn, including HK$22.9bn of gains from the US beverage business disposal and One Island East property transaction; recurring underlying profit was HK$10.4bn.

• Core businesses remained solid amid difficult economic conditions; aviation rebounded strongly, while long-term investment remained focused on Hong Kong, the Chinese Mainland and South East Asia.

Financial highlights

• Revenue was HK$94.8bn, up 3% YoY; statutory profit was HK$28.9bn versus HK$4.2bn in 2022, and underlying profit was HK$36.2bn versus HK$4.7bn.

• Recurring underlying profit rose 175% to HK$10.449bn from HK$3.800bn; cash generated from operations increased 20% to HK$14.479bn.

Outlook and guidance

• Continue long-term investment in Hong Kong and the Chinese Mainland property markets, with beverage and healthcare expansion in South East Asia; shareholder value remains a 2024 focus.

• Cathay Pacific targets 80% of pre-pandemic passenger flights in Q2 2024 and 100% in Q1 2025; passenger and cargo yields are expected to normalise or decline from 2023 levels.

• Hong Kong retail footfall and sales are expected to improve; office conditions remain subdued, while Chinese Mainland retail-space demand is expected to be stable.

• Beverage outlook: challenging Chinese Mainland conditions, stable Hong Kong, growth in Taiwan, steady Vietnam profits and improved Cambodia performance; Thailand and Laos investment is expected to contribute immediately.

• HAECO expects stable base-maintenance demand, higher line maintenance and strong engine-services demand; healthcare will pursue investments in the Chinese Mainland and South East Asia.