Financial Performance - The company's equity return increased to 11.0% in 2023, up by 9.4 percentage points from 1.6% in 2022[4] - The basic profit attributable to shareholders rose to HKD 36,177 million, a 662% increase from HKD 4,748 million in 2022[4] - The revenue for 2023 was HKD 94,823 million, reflecting a 3% growth compared to HKD 91,693 million in 2022[4] - The operating profit surged to HKD 30,621 million, marking a 150% increase from HKD 12,241 million in the previous year[4] - The group’s net profit attributable to shareholders was HKD 28.85 billion, compared to HKD 41.19 billion in 2022, reflecting a decrease due to non-recurring items[20] - The group recorded a record basic profit of HKD 36.2 billion for the year 2023, driven by significant non-recurring items, including HKD 22.9 billion from the sale of the US Swire Coca-Cola business[14] - The group announced a special dividend of HKD 8.120 per 'A' share and HKD 1.624 per 'B' share following the sale of Swire Coca-Cola in 2023[28] - The group’s recurring basic profit, excluding investment property value changes, was HKD 10.44 billion in 2023, compared to HKD 3.8 billion in 2022, indicating a significant recovery[20] Dividends and Shareholder Returns - The company declared an 'A' share dividend of HKD 11.32, a significant increase of 277% from HKD 3.00 in 2022[4] - The group announced a new share buyback plan of HKD 6 billion in December 2023 to enhance shareholder returns[16] - The group’s gradual dividend policy resulted in a 7% increase in total dividends for 2023 compared to 2022[28] Employee and Operational Insights - The company employed over 32,000 staff in Hong Kong and more than 35,000 in mainland China, totaling over 78,000 employees globally[12] - The airline group operated a fleet of 230 aircraft and provided services to 92 destinations globally as of December 31, 2023[12] Investment and Growth Strategies - The company is actively seeking investment opportunities in the private healthcare sector, particularly in major urban areas in mainland China and Southeast Asia[12] - The group is optimistic about investment opportunities in mainland China and continues to focus on long-term investments in core markets[14] - Swire Properties is committed to investing nearly 60% of its HKD 100 billion plan in core market projects by March 2024[16] - The company plans to focus on the Hong Kong and mainland China markets for future developments, emphasizing high-quality residential properties and asset optimization strategies[46] Real Estate and Property Performance - The total floor area of investment properties and hotels as of December 31, 2023, is 34.4 million square feet, an increase from 29.9 million square feet in 2022[44] - The investment property portfolio includes approximately 24.4 million square feet of completed properties, with 12.1 million square feet in office space and 9.1 million square feet in retail space[44] - The total revenue from the property sector was HKD 14,670 million in 2023, an increase from HKD 13,826 million in 2022, representing a growth of approximately 6.1%[47] - The operating profit from property investment was HKD 8,253 million in 2023, compared to HKD 7,695 million in 2022, showing an increase of about 7.2%[47] Retail and Consumer Insights - The retail sector in mainland China showed strong recovery post-pandemic, contributing positively to the company's overall performance[54] - In 2023, the retail sales in mainland China significantly rebounded post-pandemic, exceeding pre-pandemic levels[61] - The retail sales in Hong Kong's major shopping malls, including Pacific Place, Cityplaza, and Taikoo City, increased by 44%, 43%, and 6% respectively in 2023, contributing to an overall retail sales growth of 16%[71] Beverage Segment Performance - In 2023, the beverage segment reported revenues of HKD 51,844 million, a decrease of 7.5% from HKD 54,225 million in 2022[120] - EBITDA for the beverage segment increased significantly to HKD 28,807 million from HKD 5,545 million in 2022, indicating a substantial improvement in operational efficiency[120] - The beverage segment's sales volume reached 1,940 million unit cases in 2023, with a per capita consumption of 48 ounces in mainland China[112] Aviation and Travel Insights - Cathay Pacific's revenue for 2023 reached HKD 55.951 billion, a 308.8% increase compared to HKD 13.686 billion in 2022[152] - The passenger load factor improved to 85.7% in 2023, up from 73.6% in 2022, representing an increase of 12.1 percentage points[149] - The group expects passenger flights to reach 80% of pre-pandemic levels by Q2 2024 and aims for 100% by Q1 2025[164] Sustainability Initiatives - The company has set sustainability goals for 2030, integrating them into its business planning and decision-making processes[118] - Cathay Pacific aims to increase the use of sustainable aviation fuel to 10% of total fuel consumption by 2030 and achieve net-zero carbon emissions by 2050[33] Challenges and Market Conditions - The company anticipates challenges in mainland China due to sluggish consumer spending, while expecting stable growth in Hong Kong and improvements in Cambodia[138] - The Hong Kong office market is expected to remain weak in 2024 due to soft demand and increased supply, with rental rates under pressure[104]

Financial Performance - The company reported a significant increase in profit attributable to shareholders, reaching HKD 4,221 million for the six months ended June 30, 2023, a 121% increase compared to HKD 1,914 million in the same period of 2022[8]. - Basic earnings rose to HKD 5,594 million, marking a 219% increase from HKD 1,752 million year-on-year[8]. - Revenue for the period was HKD 51,544 million, reflecting a 15% growth compared to HKD 44,808 million in the previous year[8]. - The operating profit decreased by 25% to HKD 5,079 million from HKD 6,794 million in the same period last year[8]. - The company experienced a 284% increase in recurring basic profit, reaching HKD 4,879 million compared to HKD 1,272 million in the same period of 2022[8]. - The company's consolidated profit attributable to shareholders for the first six months of 2023 was HKD 42.21 billion, compared to HKD 19.14 billion in the same period of 2022, reflecting a significant increase[15]. - The basic profit attributable to shareholders, excluding changes in investment property values, was HKD 55.94 billion, up from HKD 17.52 billion year-on-year[15]. - The attributable profit for the first half of 2023 was HKD 63 million, a decrease from HKD 166 million in the same period of 2022, primarily due to increased losses in the cabin business and reduced unrealized exchange gains from Xiamen Swire[147]. Debt and Financial Position - The net debt increased by 52% to HKD 66,915 million from HKD 43,911 million year-on-year[8]. - The net debt to equity ratio (excluding lease liabilities) rose to 21.4%, an increase of 7.7 percentage points from 13.7% in the previous year[8]. - The group's net debt-to-equity ratio as of June 30, 2023, was 21.4%, with available liquid funds amounting to HKD 35.9 billion[23]. - The anticipated sale of the US bottling business is expected to reduce the net debt-to-equity ratio to 14.9%, strengthening the balance sheet further[23]. - The total borrowings and bonds as of June 30, 2023, amounted to HKD 80,355 million, an increase from HKD 68,373 million at the end of December 2022[189]. - The total amount of borrowings and lease liabilities due within one year was HKD 9.75 billion, representing 11% of total borrowings[195]. - The group maintained undrawn committed funding totaling HKD 8.74 billion as of June 30, 2023[190]. Investments and Strategic Focus - The company announced the sale of 100% equity in Swire Coca-Cola USA for approximately HKD 30.4 billion, which is expected to enhance the balance sheet and provide immediate substantial returns to shareholders[11]. - The company continues to focus on long-term growth in the Greater China and Southeast Asia regions, with ongoing investments in real estate, beverages, and aviation sectors[3]. - The company is actively seeking investment opportunities in healthcare services and major cities in mainland China and Southeast Asia[21]. - The company is focusing on long-term investments in the Greater Bay Area, including projects in Guangzhou and Shenzhen, as part of its strategic expansion[12]. - The investment plan of HKD 100 billion announced in March 2022 aims to invest in property development projects in Hong Kong and mainland China over the next decade[48]. - As of August 4, 2023, the company has committed approximately HKD 390 billion of the planned investment amount, with HKD 170 billion allocated to mainland China and HKD 110 billion each to Hong Kong and residential sales projects[48]. Real Estate and Property Performance - The real estate segment reported a recurring basic profit of HKD 31.88 billion, a 6% increase from HKD 29.94 billion in the first half of 2022, driven by a strong recovery in retail and hotel businesses in Hong Kong[16]. - The attributable basic profit from the property sector for the first half of 2023 was HKD 18,220 million, down from HKD 35,630 million in the same period of 2022[45]. - The performance of retail properties in Hong Kong and mainland China improved significantly, driven by the lifting of travel restrictions and pandemic measures[46]. - The hotel business in Hong Kong and mainland China saw a substantial recovery following the easing of pandemic measures, with strong performance reported in the United States[47]. - The rental income from office properties was HKD 2.96 billion, while retail properties generated HKD 3.51 billion in the first half of 2023[34]. - The rental income from the Hong Kong retail portfolio for the first half of 2023 was HKD 1.23 billion, an increase of 17% year-on-year, indicating a recovery post-pandemic[56]. - The company plans to double the total floor area of retail-led developments in first-tier and emerging first-tier cities in mainland China[48]. Beverage Segment Performance - Swire Coca-Cola's recurring profit increased by 41% to HKD 16.27 billion, with total revenue rising 14% to HKD 30.44 billion and sales volume increasing by 18% to 1.055 billion standard cases[17]. - For the six months ended June 30, 2023, Swire's revenue was HKD 30,446 million, a 15.5% increase from HKD 26,331 million in the same period of 2022[92]. - The profit from the beverage segment was HKD 1,627 million for the six months ended June 30, 2023, compared to HKD 1,152 million in the same period of 2022[185]. - Swire Coca-Cola recorded a profit attributable to shareholders of HKD 1.423 billion for the first half of 2023, including a non-recurring loss of HKD 239 million from an investment impairment related to a plastic recycling joint venture[103]. Airline Performance - Cathay Pacific recorded a profit of HKD 42.68 billion for the first half of 2023, a significant improvement from a loss of HKD 49.99 billion in the same period of 2022, driven by strong market demand following the lifting of quarantine requirements[18]. - Passenger revenue reached HKD 25.013 billion, up 1,109.5% from HKD 2.068 billion in the first half of 2022[124]. - The total number of passengers carried was 7.816 million, a 2,233.1% increase from 335,000 in the same period last year[124]. - Cathay Pacific's passenger capacity is projected to reach 70% of pre-pandemic levels by the end of 2023, serving 80 destinations, and aims for 100% by the end of 2024[137]. - The passenger load factor improved to 87.2%, up 28 percentage points from 59.2% in the first half of 2022[124]. Operational Highlights - The cash generated from operations was HKD 7,206 million, a 17% increase from HKD 6,147 million year-on-year[8]. - The company completed a share buyback program with a total cash consideration of HKD 700 million, repurchasing 8,998,500 'A' shares and 15,107,500 'B' shares[22]. - The company has initiated the presale of the residential development project "Hae Ying Shan" located in Wong Chuk Hang, Hong Kong[54]. - The company has obtained full ownership of two industrial sites in Quarry Bay, with plans to redevelop them into office and commercial spaces, totaling approximately 779,000 square feet[60]. - The company expects stable demand for base maintenance services in the second half of 2023, with a rebound in line maintenance services as air traffic recovers[159].

Corporate Statement Swire Pacific is a Hong Kong-based international conglomerate committed to long-term shareholder value growth, guided by core values and strategic focus on key Asian markets and emerging sectors [Company Overview and Objectives](index=3&type=section&id=Corporate%20Statement_Company%20Overview%20and%20Objectives) Swire Pacific is a Hong Kong-based international conglomerate with diversified, market-leading businesses, focused on long-term shareholder value growth and sustained dividend increases, with strategic emphasis on property, beverages, and aviation in Greater China and Southeast Asia - Swire Pacific is a Hong Kong-based international conglomerate with diversified, market-leading businesses, renowned in Greater China for over 150 years[3](index=3&type=chunk) - The company aims to achieve sustained shareholder value growth through long-term ideal equity returns and maintain continuous general dividend growth to reward shareholders[3](index=3&type=chunk) - Strategic focus is on Greater China and Southeast Asia, dedicated to developing core property, beverages, and aviation divisions, while exploring new areas like healthcare and sustainable food[3](index=3&type=chunk) [Core Values and Principles](index=3&type=section&id=Corporate%20Statement_Core%20Values%20and%20Principles) Swire Pacific upholds values of integrity, endeavor, excellence, humility, teamwork, and long-term development, with core principles including Asian market focus, flexible resource allocation, prudent financial management, talent development, robust partnerships, sustainable investments, and high corporate governance standards - Company values include integrity, endeavor, excellence, humility, teamwork, and long-term development[4](index=4&type=chunk) - Business concentrated in high-potential Asian regions, particularly Greater China, with years of experience and solid business relationships[4](index=4&type=chunk) - Flexible allocation of capital and talent within the group, fostering idea exchange and increasing investment opportunities[4](index=4&type=chunk) - Adopting prudent financial management to ensure long-term investment plans are unaffected by short-term financial market fluctuations[4](index=4&type=chunk) - Recruiting top talent, investing heavily in training and development, and prioritizing employee well-being[4](index=4&type=chunk) - Building mutually beneficial, stable, and lasting relationships with business partners[4](index=4&type=chunk) - Investing in sustainable development, believing it helps the group maintain long-term growth through innovation and efficiency improvements[4](index=4&type=chunk) - Committed to maintaining high corporate governance standards, preserving and developing the Swire brand and reputation[4](index=4&type=chunk) - Investment objective is to build a business portfolio capable of consistently providing stable dividends[5](index=5&type=chunk) - As a long-term investor, focusing on holding controlling interests in businesses and managing them for long-term growth[5](index=5&type=chunk) - Concentrating on developing businesses where expertise can contribute and create value[5](index=5&type=chunk) - Investing in businesses that offer excellent products and services and hold leading market positions[5](index=5&type=chunk) - Divesting from businesses that have fully realized their potential, reallocating capital into existing or new ventures[5](index=5&type=chunk) Performance Summary The company reported significant profit growth for H1 2023, driven by strong recurring underlying profit, despite a decline in operating profit due to investment property fair value changes, with increased net debt [Key Financial Data](index=4&type=section&id=Performance%20Summary_Key%20Financial%20Data) For H1 2023, profit attributable to shareholders surged **121% to HKD 4,221 million**, with recurring underlying profit up **284% to HKD 4,879 million**, revenue grew **15% to HKD 51,544 million**, but operating profit fell **25%** due to investment property fair value changes, and net debt increased **52%**, raising the net debt to capital ratio to **21.4%** Key Financial Data for the Six Months Ended June 30 | Indicator | 2023 (HKD million) | 2022 (HKD million) (Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to company shareholders | 4,221 | 1,914 | +121% | | Underlying profit | 5,594 | 1,752 | +219% | | Recurring underlying profit | 4,879 | 1,272 | +284% | | Revenue | 51,544 | 44,808 | +15% | | Operating profit | 5,079 | 6,794 | -25% | | Operating profit excluding fair value changes of investment properties | 6,409 | 6,091 | +5% | | Fair value changes of investment properties | (1,330) | 703 | -289% | | Cash generated from operations | 7,206 | 6,147 | +17% | | Net cash outflow before financing | (3,493) | (2,243) | -56% | | Total equity (including non-controlling interests) | 312,933 | 321,421 | -3% | | Net debt | 66,915 | 43,911 | +52% | | Net debt to capital ratio (excluding lease liabilities) | 21.4% | 13.7% | +7.7 percentage points | Per Share Data for the Six Months Ended June 30 | Indicator | 2023 (HKD) | 2022 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Earnings per share ('A' shares) | 2.91 | 1.28 | +127% | | Earnings per share ('B' shares) | 0.58 | 0.26 | - | | Underlying earnings per share ('A' shares) | 3.86 | 1.17 | +230% | | Underlying earnings per share ('B' shares) | 0.77 | 0.23 | - | | Dividend per share ('A' shares) | 1.20 | 1.15 | +4% | | Dividend per share ('B' shares) | 0.24 | 0.23 | - | | Equity attributable to company shareholders per share ('A' shares) | 177.89 | 175.80 | - | | Equity attributable to company shareholders per share ('B' shares) | 35.58 | 35.16 | +1% | Chairman's Statement The Chairman's report highlights a strong rebound in H1 2023 performance, driven by aviation, strategic investments in Asia, and the planned divestment of Swire Coca-Cola USA, while maintaining a robust financial position and commitment to sustainability [Overall Results and Strategic Development](index=5&type=section&id=Chairman%27s%20Statement_Overall%20Results%20and%20Strategic%20Development) In the first half of 2023, Swire Pacific's core divisions saw a comprehensive recovery, primarily driven by the strong rebound in the aviation sector, with the company continuing its long-term investment strategy in Hong Kong, mainland China, and Southeast Asia, and announcing the sale of Swire Coca-Cola USA, expected to yield significant shareholder returns and strengthen the balance sheet - In the first half of 2023, the Group's core divisions experienced a comprehensive recovery, with the aviation division being the main driver[8](index=8&type=chunk) - The company continues to steadfastly execute its strategic long-term plans for continuous investment in Hong Kong, mainland China, and Southeast Asia[8](index=8&type=chunk) - Announced the sale of 100% equity interest in Swire Coca-Cola USA for approximately **HKD 30.4 billion**, expected to bring immediate and substantial returns to shareholders and strengthen the Group's balance sheet[8](index=8&type=chunk) 2023 H1 Profit Attributable to Company Shareholders | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | Consolidated profit | 4,221 | 1,914 | | Underlying profit (excluding fair value changes of investment properties) | 5,594 | 1,752 | | Recurring underlying profit | 4,879 | 1,272 | - Recurring underlying profit significantly increased, primarily due to the continued recovery of Cathay Group's business, higher profits from Swire Coca-Cola, and increased profits from Swire Properties, while HAECO Group was affected by increased losses in cabin design and refurbishment solutions business[10](index=10&type=chunk) [Divisional Performance Overview](index=6&type=section&id=Chairman%27s%20Statement_Divisional%20Performance%20Overview) The Property division's recurring underlying profit grew **6%**, driven by strong recovery in Hong Kong retail and hotel businesses and improved retail sales in mainland China, while the Beverages division's recurring profit increased **41%**, benefiting from strong US performance and new Vietnam acquisitions, and the Aviation division achieved a significant turnaround to profit, with Cathay Group's attributable profit reaching **HKD 4.268 billion** and HK Express recording its first profit 2023 H1 Key Divisional Recurring Underlying Profit | Division | 2023 H1 (HKD million) | 2022 H1 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Property Division | 3,188 | 2,994 | +6% | | Beverages Division | 1,627 | 1,152 | +41% | | Aviation Division (Cathay Group attributable profit) | 4,268 | (4,999) | Turned to profit | | HAECO Group attributable profit | 63 | 166 | -62% | - Property division's performance improved, primarily driven by the strong recovery of Hong Kong's retail and hotel businesses and mainland China's shopping mall retail sales exceeding pre-pandemic levels[11](index=11&type=chunk) - Beverages division's profit significantly increased, with strong performance in the US business and new acquisitions in Vietnam beginning to contribute substantial profits[12](index=12&type=chunk)[13](index=13&type=chunk) - Aviation division's Cathay Group achieved a significant turnaround to profit, with HK Express recording its first profit, reflecting the recovery of Hong Kong's international aviation hub[14](index=14&type=chunk)[15](index=15&type=chunk) - Trading & Industrial division's recurring profit increased, mainly due to increased visitor arrivals in Hong Kong and improved local market sentiment[16](index=16&type=chunk) [Dividends, Financial Strength, and Sustainability](index=8&type=section&id=Chairman%27s%20Statement_Dividends%2C%20Financial%20Strength%2C%20and%20Sustainability) Swire Pacific declared a first interim dividend of **HKD 1.20 per 'A' share** and **HKD 0.24 per 'B' share**, a **4% increase** from the prior year, having completed a **HKD 4 billion** share repurchase program and planning a special dividend post-Swire Coca-Cola USA sale, while maintaining a robust financial position with a **21.4% net debt to capital ratio** and a commitment to sustainability through its SwireTHRIVE strategy 2023 First Interim Dividend | Share Class | Dividend per Share (HKD) | Change from 2022 First Interim Dividend (%) | | :--- | :--- | :--- | | 'A' shares | 1.20 | +4% | | 'B' shares | 0.24 | +4% | - Completed a **HKD 4 billion** share repurchase program and plans to distribute a special dividend after the sale of Swire Coca-Cola USA (**HKD 8.120 per 'A' share** and **HKD 1.624 per 'B' share**)[17](index=17&type=chunk) Financial Strength Indicators | Indicator | As at June 30, 2023 | | :--- | :--- | | Net debt to capital ratio | 21.4% | | Available liquidity | HKD 35.9 billion | | Estimated net debt to capital ratio after US bottling business sale | 14.9% | - The company has set specific goals through its SwireTHRIVE sustainability strategy, including reducing environmental footprint, promoting an accessible and inclusive corporate culture, and implementing impactful community work[19](index=19&type=chunk) [Outlook](index=8&type=section&id=Chairman%27s%20Statement_Outlook) Despite an uncertain economic outlook for the remainder of 2023, Swire Pacific anticipates the H1 performance rebound to continue into H2, driven by Cathay Group's recovery, with Swire Properties' flagship brands in mainland China and Hong Kong expected to remain popular amid ongoing market recovery, Swire Coca-Cola's business projected to be stable with substantial full-year contributions from new Vietnam acquisitions, and Cathay Pacific's passenger capacity expected to reach **70% of pre-pandemic levels by year-end** and **100% by end-2024**, while HAECO anticipates stable base maintenance demand and increased demand for line maintenance and engine overhaul services - The H1 2023 performance rebound is expected to continue into H2, primarily driven by the recovery of Cathay Group's business[20](index=20&type=chunk) - Swire Properties: Flagship brands in mainland China and Hong Kong will continue to be highly sought after, various development projects are ongoing, and core markets are expected to continue their recovery[20](index=20&type=chunk) - Swire Coca-Cola: Business is expected to remain stable, new acquisitions in Vietnam will contribute substantially for the full year, and Cambodia's business is anticipated to improve in H2[20](index=20&type=chunk) - Cathay Pacific: Business continues to recover, with passenger capacity expected to reach **70% of pre-pandemic levels by year-end**, serving 80 destinations, and **100% by end-2024**[21](index=21&type=chunk) - HAECO: Base maintenance demand is expected to be stable in H2 2023, with increasing demand for line maintenance and engine overhaul services[21](index=21&type=chunk) Business Review This section provides a detailed review of the performance and strategic developments across the Property, Beverages, Aviation, Healthcare, and Trading & Industrial divisions for the reporting period [Property Division](index=10&type=section&id=Business%20Review_Property%20Division) Swire Properties' business encompasses property investment, hotel investment, and property trading, primarily in Hong Kong, mainland China, and Miami, USA, with the division's attributable recurring underlying profit growing **6% to HKD 3.188 billion** in H1 2023, driven by strong recovery in Hong Kong retail and hotel businesses and significant improvement in mainland China retail sales, despite a weak Hong Kong office market, as the company executes a **HKD 100 billion** investment plan with multiple major development projects underway - Swire Properties' business comprises three main areas: property investment, hotel investment, and property trading, with primary markets in Hong Kong, mainland China, and Miami, USA[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) Property Division 2023 H1 Financial Summary | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) (Restated) | | :--- | :--- | :--- | | Total Revenue | 7,297 | 6,910 | | Total Operating Profit | 2,871 | 4,892 | | Attributable Profit | 2,222 | 4,347 | | Profit attributable to Swire Pacific | 1,822 | 3,563 | | Underlying profit attributable to Swire Pacific | 3,195 | 3,401 | | Recurring underlying profit attributable to Swire Pacific | 3,188 | 2,994 | - In H1 2023, the Property division's attributable recurring underlying profit was **HKD 3.188 billion**, an increase of **6%** compared to H1 2022, primarily reflecting the strong recovery in Hong Kong's retail and hotel businesses and increased rental income from mainland China's retail properties[11](index=11&type=chunk)[31](index=31&type=chunk) - Swire Properties is executing a **HKD 100 billion** investment plan, having committed approximately **HKD 39 billion** to property development and residential trading projects in Hong Kong, mainland China, and Southeast Asia[32](index=32&type=chunk) [Hong Kong Properties](index=14&type=section&id=Business%20Review_Property%20Division_Hong%20Kong%20Properties) Despite subdued demand in the Hong Kong office market, resulting in a **2% decrease** in gross rental income, Swire Properties' office portfolio remained resilient with a **90% occupancy rate**, while the retail property portfolio saw a significant rebound, with gross rental income increasing **17%**, driven by tourism recovery and eased anti-pandemic measures, with some mall sales returning to pre-pandemic levels, and residential property occupancy at approximately **77%**, with several development and planning projects underway Hong Kong Properties 2023 H1 Gross Rental Income | Property Type | 2023 H1 (HKD million) | 2022 H1 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Office | 2,778 | 2,835 | -2% | | Retail | 1,230 | 1,050 | +17% | - Hong Kong office portfolio was **90% leased** as at June 30, 2023, or **94% excluding Two Taikoo Place**, demonstrating resilience[34](index=34&type=chunk) - Retail sales at Pacific Place shopping mall, Cityplaza, and Citygate Outlets increased by **60%**, **12%**, and **62%** respectively in the first half[35](index=35&type=chunk) - One Taikoo Place is expected to be completed by the end of 2023, while Wah Ha Factory Building and仁孚工業大廈 (Yan Foo Industrial Building) in Quarry Bay will be redeveloped for office and other commercial uses[36](index=36&type=chunk)[37](index=37&type=chunk) [Mainland China Properties](index=15&type=section&id=Business%20Review_Property%20Division_Mainland%20China%20Properties) Mainland China's retail properties experienced significantly improved footfall and retail sales well above pre-pandemic levels after the easing of anti-pandemic measures, leading to a **30% increase** in gross rental income, with substantial growth across major retail properties, while office gross rental income decreased **6%** but increased **1%** excluding RMB currency fluctuations, and several development projects are in progress - Mainland China retail properties saw significant improvement in footfall, with retail sales well exceeding pre-pandemic levels, and Swire Properties' attributable retail sales increasing by **41%**[39](index=39&type=chunk) Mainland China Key Retail Properties 2023 H1 Retail Sales Growth | Property | Retail Sales Growth (%) | | :--- | :--- | | Taikoo Li Sanlitun, Beijing | +29% | | Sino-Ocean Taikoo Li Chengdu | +27% | | Taikoo Hui, Guangzhou | +16% | | INDIGO, Beijing | +34% | | HKRI Taikoo Hui, Shanghai | +72% | | Taikoo Li Qiantan, Shanghai | +169% | - Mainland China retail properties' gross rental income increased **30% to HKD 2.042 billion**, or **37%** excluding rental support and RMB currency fluctuations[40](index=40&type=chunk) - Office gross rental income decreased **6%**, but increased **1%** excluding RMB currency fluctuations, with occupancy rates of **90%** at Taikoo Hui, Guangzhou, **92%** at INDIGO Phase 1, Beijing, and **98%** at HKRI Taikoo Hui, Shanghai[40](index=40&type=chunk) - Major development projects include INDIGO Phase 2, Taikoo Li Xi'an, and a retail landmark project in Sanya, expected to be completed in phases starting from 2025[40](index=40&type=chunk) [US Properties and Hotel Business](index=17&type=section&id=Business%20Review_Property%20Division_US%20Properties%20and%20Hotel%20Business) Miami's Brickell City Centre shopping mall achieved a **90% occupancy rate** and a **7% increase** in retail sales in H1, with Swire Properties planning to develop the luxury residential project One Island Drive on Brickell Key, while hotel businesses in Hong Kong and mainland China saw strong recovery due to eased anti-pandemic measures, and US hotels performed well, with Swire Properties-managed hotels recording an operating profit before depreciation of **HKD 59 million**, reversing a loss from the prior year - Miami's Brickell City Centre shopping mall had a **90% occupancy rate** as at June 30, 2023, with retail sales increasing by **7%** in the first half[43](index=43&type=chunk)[44](index=44&type=chunk) - Swire Properties plans to develop the luxury residential project One Island Drive on Brickell Key in Miami, including private luxury residences and a new Mandarin Oriental hotel[32](index=32&type=chunk)[54](index=54&type=chunk) - Hong Kong and mainland China hotel businesses experienced strong recovery, and US hotels performed well, with Swire Properties-managed hotels recording an operating profit before depreciation of **HKD 59 million** in H1 2023, compared to a loss of **HKD 74 million** in H1 2022[46](index=46&type=chunk) - Hong Kong hotel business is expected to recover further, mainland China hotel business to grow, and US hotels to continue performing well[47](index=47&type=chunk) [Property Trading and Capital Commitments](index=18&type=section&id=Business%20Review_Property%20Division_Property%20Trading%20and%20Capital%20Commitments) Property trading operations include residential development projects in Hong Kong, Indonesia, Vietnam, and Thailand, with **33 units sold** at EIGHT STAR STREET in Hong Kong and **48 units pre-sold** at the Blue Coast project in Wong Chuk Hang, while the Group's total capital commitments as at June 30, 2023, amounted to **HKD 24.875 billion**, with **HKD 9.613 billion** in Hong Kong and **HKD 15.235 billion** in mainland China, and the Hong Kong residential market is expected to remain cautious in the short term but stable in the medium to long term, with optimistic outlooks for Southeast Asia and Miami - Of the 37 units in the EIGHT STAR STREET residential building in Hong Kong, **33 have been sold**, and **48 out of 432 units** in the Blue Coast residential project in Wong Chuk Hang have been pre-sold[49](index=49&type=chunk) - Residential development projects are underway or planned in Jakarta, Indonesia, Ho Chi Minh City, Vietnam, and Bangkok, Thailand[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) Investment Properties and Hotel Capital Commitments Overview (As at June 30, 2023) | Location | Total Commitment (HKD million) | | :--- | :--- | | Hong Kong | 9,613 | | Mainland China | 15,235 | | USA | 27 | | **Total** | **24,875** | - The Hong Kong residential market is expected to see cautious buyer sentiment in the short term but stable market sentiment in the medium to long term, while residential property markets in Jakarta, Indonesia, Ho Chi Minh City, Vietnam, and Bangkok, Thailand, are performing steadily, and the luxury residential property market in Miami has an optimistic outlook[52](index=52&type=chunk) [Beverages Division](index=20&type=section&id=Business%20Review_Beverages%20Division) Swire Coca-Cola holds Coca-Cola product franchises in mainland China, Hong Kong, Taiwan, Vietnam, Cambodia, and the western USA, covering a population of **877 million**, with the division's attributable recurring profit significantly increasing **41% to HKD 1.627 billion** in H1 2023, total revenue growing **14% to HKD 30.442 billion**, and sales volume up **18%**, driven by strong US performance and substantial contributions from new Vietnam acquisitions, and the company has signed an agreement to sell its entire interest in Swire Coca-Cola USA, expecting to record over **HKD 22 billion** in disposal gains - Swire Coca-Cola holds Coca-Cola product franchises in mainland China, Hong Kong, Taiwan, Vietnam, Cambodia, and the western USA, covering a population of **877 million**[56](index=56&type=chunk) Beverages Division 2023 H1 Financial Summary | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | Revenue | 30,446 | 26,331 | | Operating profit | 2,014 | 1,603 | | Attributable profit (including non-recurring items) | 1,423 | 1,152 | | Recurring profit | 1,627 | 1,152 | - In H1 2023, the Beverages division's attributable recurring profit was **HKD 1.627 billion**, an increase of **41%** compared to H1 2022, with total revenue rising **14% to HKD 30.442 billion** and sales volume increasing **18% to 1.055 billion standard cases**[12](index=12&type=chunk)[61](index=61&type=chunk) - An agreement has been signed to sell the entire interest in Swire Coca-Cola USA for a total consideration of **USD 3.9 billion**, with an expected consolidated disposal gain of over **HKD 22 billion**[62](index=62&type=chunk) [Regional Performance](index=22&type=section&id=Business%20Review_Beverages%20Division_Regional%20Performance) Mainland China operations saw a **5% increase** in attributable profit, with sales volume and business returning to normal and revenue growing **6%** in local currency, while Hong Kong's attributable profit decreased **10%** due to rising raw material costs and increased operating expenses, and Taiwan's attributable profit fell **11%** despite sales growth, impacted by unfavorable exchange rate movements, with Southeast Asia's attributable profit at **HKD 70 million** driven by strong Vietnam performance, and US operations' attributable profit surged **65%**, with revenue up **13%** in local currency due to price adjustments and improved product mix, despite a decline in sales volume Beverages Division 2023 H1 Regional Attributable Profit and Change | Region | 2023 H1 Attributable Profit (HKD million) | 2022 H1 Attributable Profit (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 616 | 586 | +5% | | Hong Kong | 56 | 62 | -10% | | Taiwan | 47 | 53 | -11% | | Southeast Asia | 70 | - | - | | USA | 913 | 554 | +65% | - Mainland China: Sales volume and business returned to normal, with revenue increasing **6%** in local currency, and growth across sparkling, water, juice, energy, coffee, and tea beverages[62](index=62&type=chunk) - Hong Kong: Sales volume recovered, but raw material costs, operating expenses, and depreciation increased, leading to a decrease in EBITDA margin from **14.6% to 13.1%**[63](index=63&type=chunk) - Taiwan: Sales volume and business continued to grow, but unfavorable exchange rate movements impacted profit, with EBITDA margin decreasing from **11.4% to 10.4%**[64](index=64&type=chunk) - Southeast Asia: Vietnam operations performed strongly, while the Cambodian beverage market remained challenging[65](index=65&type=chunk) - USA: Revenue growth reflected price adjustments and a better product mix, with EBITDA margin increasing from **10.8% to 13.9%**[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [Aviation Division](index=24&type=section&id=Business%20Review_Aviation%20Division) The Aviation division, comprising Cathay Group and HAECO Group, recorded an attributable profit of **HKD 1.796 billion** in H1 2023, reversing a loss from the prior year, with Cathay Group performing exceptionally well, achieving an attributable profit of **HKD 4.268 billion** driven by strong passenger demand post-reopening of Hong Kong and mainland China borders, and HK Express recording its first profit, while HAECO Group's attributable profit decreased to **HKD 63 million** due to increased losses in cabin business and reduced unrealized exchange gains, and Cathay Pacific is actively rebuilding its flight network, expecting passenger capacity to reach **70% of pre-pandemic levels by year-end** and **100% by end-2024** - The Aviation division comprises associate company Cathay Group and wholly-owned subsidiary Hong Kong Aircraft Engineering Company (HAECO) Group[71](index=71&type=chunk) Aviation Division 2023 H1 Financial Summary | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | HAECO Group attributable profit | 63 | 166 | | Cathay Group attributable profit/(loss) | 1,796 | (2,236) | - In H1 2023, the Aviation division's attributable profit was **HKD 1.796 billion**, reversing a loss of **HKD 2.236 billion** in H1 2022[76](index=76&type=chunk) - Cathay Group's attributable profit was **HKD 4.268 billion**, primarily benefiting from strong passenger demand following the full reopening of Hong Kong and mainland China borders, with HK Express recording its first profit[14](index=14&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - HAECO Group's attributable profit decreased to **HKD 63 million**, mainly due to increased losses in the cabin business and reduced unrealized exchange gains at HAECO Xiamen[15](index=15&type=chunk)[91](index=91&type=chunk) [Cathay Group](index=25&type=section&id=Business%20Review_Aviation%20Division_Cathay%20Group) Cathay Pacific's passenger revenue surged **1,110% to HKD 25.013 billion** in H1 2023, carrying **7.8 million passengers** with an **87.2% load factor**, while cargo revenue decreased **12% to HKD 10.741 billion** due to a weak global air cargo market, and total fuel costs increased **148%**, with the airline's fleet totaling **225 aircraft**, and the Cathay Group remains confident in Hong Kong's long-term future as an international aviation hub, expecting passenger capacity to reach **70% of pre-pandemic levels by year-end** and **100% by end-2024** Cathay Pacific 2023 H1 Passenger Data | Indicator | 2023 H1 | 2022 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Passenger revenue (HKD million) | 25,013 | 2,068 | +1109.5% | | Revenue passenger kilometers (million) | 32,308 | 1,810 | +1685.0% | | Revenue passengers carried (thousand) | 7,816 | 335 | +2233.1% | | Passenger load factor (%) | 87.2 | 59.2 | +28.0 percentage points | Cathay Pacific 2023 H1 Cargo Data | Indicator | 2023 H1 | 2022 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Cargo revenue (HKD million) | 10,741 | 12,148 | -11.6% | | Cargo revenue tonne kilometers (million) | 3,886 | 2,123 | +83.0% | | Cargo carried (thousand tonnes) | 651 | 526 | +23.8% | | Cargo load factor (%) | 63.8 | 75.8 | -12.0 percentage points | - Cathay Pacific's total fuel costs (before fuel hedging impact) increased by **HKD 6.085 billion (or 148%)** compared to H1 2022[81](index=81&type=chunk) - Cathay Group's total fleet comprises **225 aircraft** with an average age of **10.7 years**, and passenger capacity is expected to reach **70% of pre-pandemic levels by end-2023** and **100% by end-2024**[82](index=82&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) [HAECO Group](index=29&type=section&id=Business%20Review_Aviation%20Division_HAECO%20Group) HAECO Group, providing aircraft maintenance and repair services, reported an attributable profit of **HKD 63 million** in H1 2023, a decrease from the prior year, primarily due to increased losses in the cabin business and reduced unrealized exchange gains at HAECO Xiamen, while airframe business losses decreased and line maintenance services handled **52% more flights**, and the components business's attributable profit surged **252% to HKD 81 million**, with engine business attributable profit increasing **5%** driven by strong demand for engine overhaul services at HAECO Engine Services (Xiamen), and stable base maintenance demand is anticipated for H2, with rising demand for line maintenance and engine overhaul services - HAECO Group provides aircraft maintenance and repair services, with core businesses including airframe maintenance and modification, engine support, and overhaul engineering[87](index=87&type=chunk) HAECO Group 2023 H1 Attributable Profit | Business Segment | 2023 H1 Attributable Profit (HKD million) | 2022 H1 Attributable Profit (HKD million) | | :--- | :--- | :--- | | Airframe | (1) | (18) | | Cabin | (214) | (49) | | Components | 81 | 23 | | Engine | 263 | 250 | | Others | (66) | (40) | | **Total** | **63** | **166** | - The decrease in profit was primarily due to increased losses recorded in the cabin business and reduced unrealized exchange gains at HAECO Xiamen[91](index=91&type=chunk) - Airframe business: Losses decreased, with line maintenance services handling **52% more flights** and base maintenance service hours increasing **7%**[92](index=92&type=chunk) - Components business: Attributable profit increased **252% to HKD 81 million**, with significant improvement in component repair and overhaul business performance[96](index=96&type=chunk) - Engine business: Attributable profit increased **5%**, primarily driven by strong demand for engine overhaul services at HAECO Engine Services (Xiamen)[97](index=97&type=chunk) - Outlook: Base maintenance service demand is expected to be stable in H2, line maintenance services will continue to rebound, and engine overhaul service demand is projected to be higher than in H1[98](index=98&type=chunk)[102](index=102&type=chunk) [Healthcare](index=33&type=section&id=Business%20Review_Healthcare) Swire Pacific's healthcare involvement is primarily through associate investments in the Yangtze River Delta and Greater Bay Area, including Columbia China, Shenzhen New Frontier United Family Hospital and C-Mer Medical Group, and DeltaHealth, with the Group's share of losses from healthcare companies decreasing to **HKD 80 million** in H1 2023 as hospitals began to recover from the pandemic, and the Group has invested **HKD 1.7 billion** and is actively expanding its service platform, seeking investment opportunities in major city clusters across mainland China and Southeast Asia - The Group holds associate investments in Columbia China, SHH Core Holding Limited (which owns Shenzhen New Frontier United Family Hospital and C-Mer Medical Group), and DeltaHealth China Limited (which operates Shanghai Delta Hospital and DeltaWest Clinic)[103](index=103&type=chunk)[104](index=104&type=chunk) Healthcare Business 2023 H1 Share of Loss | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | Share of loss | 80 | 95 | - The reduction in loss was mainly due to hospitals beginning to recover from the pandemic, with patient numbers and revenue expected to continue rising[105](index=105&type=chunk) - The Group has invested **HKD 1.7 billion** in healthcare businesses and is actively expanding its service platform, continuing to seek investment opportunities in major city clusters across mainland China and Southeast Asia[106](index=106&type=chunk) [Trading & Industrial](index=34&type=section&id=Business%20Review_Trading%20and%20Industrial) The Trading & Industrial division, comprising Swire Resources, Swire Motors, Swire Foods, and Swire Waste Management, recorded an attributable profit of **HKD 185 million** in H1 2023, reversing a loss from the prior year, with Swire Resources' revenue increasing **27%** benefiting from border reopening and consumption voucher schemes, Swire Motors' sales volume growing **21%** and revenue up **25%**, Swire Foods' loss significantly narrowed, while Swire Sugar's profit decreased, and Swire Waste Management's attributable profit remained stable, with H2 recurring profit expected to be lower than H1 Trading & Industrial 2023 H1 Financial Summary | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | Revenue | 5,393 | 4,534 | | Operating profit | 245 | (255) | | Attributable profit/(loss) | 185 | (311) | | Recurring profit | 185 | 113 | - In H1 2023, the Trading & Industrial division's attributable profit was **HKD 185 million**, reversing an attributable loss of **HKD 311 million** in H1 2022[109](index=109&type=chunk) - Swire Resources: Attributable profit increased to **HKD 65 million**, with revenue up **27%**, benefiting from border reopening and consumption voucher schemes[110](index=110&type=chunk) - Swire Motors: Attributable profit increased to **HKD 118 million**, with sales volume rising **21% to 10,065 vehicles** and revenue up **25%**[111](index=111&type=chunk) - Swire Foods: Attributable loss narrowed to **HKD 9 million**, with Qinyuan Bakery's loss decreasing, while Swire Sugar's profit decreased[112](index=112&type=chunk) - Swire Waste Management: Attributable profit was **HKD 22 million**, similar to the prior year[113](index=113&type=chunk) - Recurring profit for the Trading & Industrial division is expected to be lower in H2 2023 than in H1, with Swire Motors facing intensified market competition and Qinyuan Bakery continuing to integrate its retail network[113](index=113&type=chunk)[114](index=114&type=chunk) Financial Review The financial review details the reconciliation of profit, departmental contributions, and key financial adjustments for the reporting period [Profit Reconciliation and Divisional Contributions](index=37&type=section&id=Financial%20Review_Profit%20Reconciliation%20and%20Divisional%20Contributions) In H1 2023, profit attributable to company shareholders was **HKD 4.221 billion**, adjusted to an underlying profit attributable to company shareholders of **HKD 5.594 billion** after accounting for investment property valuation changes and related deferred tax, and further adjusted to a recurring underlying profit of **HKD 4.879 billion** after excluding significant non-recurring items, with the Property division contributing **HKD 3.188 billion** in recurring underlying profit, Beverages **HKD 1.627 billion**, Aviation (Cathay Group) **HKD 782 million**, and Trading & Industrial **HKD 185 million** Reconciliation of Profit Attributable to Company Shareholders to Underlying Profit (For the Six Months Ended June 30, 2023) | Indicator | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Profit attributable to company shareholders | 4,221 | 1,914 | | Valuation loss/(gain) on investment properties | 1,646 | (757) | | Deferred tax on investment properties | 347 | 213 | | Realised valuation gains on disposal of interests in investment properties | 29 | 299 | | Depreciation of investment properties for own use | 14 | 14 | | Amortisation of right-of-use assets reported under investment properties | (41) | (42) | | Remeasurement gain on interests in joint ventures becoming subsidiaries upon acquisition completion | (306) | - | | Adjustments attributable to non-controlling interests | (316) | 111 | | **Underlying profit attributable to company shareholders** | **5,594** | **1,752** | Reconciliation of Recurring Underlying Profit to Significant Non-Recurring Items (For the Six Months Ended June 30, 2023) | Indicator | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Underlying profit attributable to company shareholders | 5,594 | 1,752 | | Significant non-recurring items: | | | | Gains on disposal of interests in investment properties and properties held for sale | (7) | (407) | | Gains on disposal of property, plant and equipment, intangible assets and other investments | (853) | (79) | | Impairment of property, plant and equipment, right-of-use assets, intangible assets and investments | 145 | 424 | | Remeasurement gains and disposal of assets classified as held for sale | - | (418) | | **Recurring underlying profit** | **4,879** | **1,272** | Recurring Underlying Profit by Division (For the Six Months Ended June 30, 2023) | Division | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Property | 3,188 | 2,994 | | Beverages | 1,627 | 1,152 | | Aviation (Cathay Group) | 782 | (2,385) | | Aviation (HAECO Group and others) | 52 | 149 | | Trading & Industrial | 185 | 113 | | Head Office, Healthcare and Others | (955) | (768) | | **Total Recurring Underlying Profit** | **4,879** | **1,272** | Financing This section outlines the company's cash flow, financing activities, debt structure, and financial strength, including capital commitments and net debt ratios [Cash Flow and Financing Changes](index=38&type=section&id=Financing_Cash%20Flow%20and%20Financing%20Changes) In H1 2023, Swire Pacific's cash generated from operations was **HKD 7.206 billion**, with net interest paid at **HKD 1.336 billion**, and net cash used in investing activities amounted to **HKD 8.646 billion**, resulting in a net cash outflow before financing of **HKD 3.493 billion**, while net cash generated from financing activities was **HKD 4.126 billion**, primarily from increased borrowings, leading to a **HKD 633 million increase** in cash and cash equivalents during the period, with total borrowings and bonds rising to **HKD 80.355 billion** and lease liabilities to **HKD 4.957 billion** 2023 H1 Cash Flow Summary | Indicator | 2023 H1 (HKD million) | 2022 H1 (HKD million) | | :--- | :--- | :--- | | Cash generated from operations | 7,206 | 6,147 | | Net interest paid | (1,336) | (915) | | Cash used in investing activities | (8,646) | (6,504) | | Net cash outflow before financing | (3,493) | (2,243) | | Net cash generated from/(used in) financing activities | 4,126 | (6,922) | | Increase/(decrease) in cash and cash equivalents | 633 | (9,165) | 2023 H1 Financing Changes Analysis | Indicator | As at June 30, 2023 (HKD million) | As at December 31, 2022 (HKD million) | | :--- | :--- | :--- | | Borrowings and bonds (period-end balance) | 80,355 | 68,373 | | Lease liabilities (period-end balance) | 4,957 | 4,916 | | Drawdown of borrowings and refinancing | 13,508 | 25,676 | | Repayment of borrowings and bonds | (4,556) | (18,866) | | Principal portion of lease payments | (445) | (880) | [Funding Sources and Debt Structure](index=39&type=section&id=Financing_Funding%20Sources%20and%20Debt%20Structure) As at June 30, 2023, Swire Pacific's committed borrowing facilities and debt securities totaled **HKD 102.953 billion**, with **22% unutilized**, and the Group held bank balances and short-term deposits of **HKD 13.44 billion**, while total borrowings and lease liabilities amounted to **HKD 85.312 billion**, with **57% repayable within 2 to 5 years**, and the currency mix showed **85% in HKD** and **10% in RMB**, with **64% of total borrowings at fixed rates**, and the net debt to capital ratio stood at **21.4%**, rising to **28.7%** when including net debt of joint ventures and associates Funding Sources as at June 30, 2023 | Category | Total Available (HKD million) | Utilized (HKD million) | Total Unutilized (HKD million) | | :--- | :--- | :--- | :--- | | Total committed facilities | 102,953 | 80,470 | 22,483 | | Total uncommitted facilities | 8,969 | 222 | 8,747 | | **Total** | **111,922** | **80,692** | **31,230** | - The Group held bank balances and short-term deposits of **HKD 13.44 billion** as at June 30, 2023[121](index=121&type=chunk) Total Borrowings and Lease Liabilities Repayment Schedule (As at June 30, 2023) | Period | Borrowings and Bonds (HKD million) | Lease Liabilities (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | | Within one year | 9,004 | 750 | 9,754 | | Between one and two years | 14,857 | 614 | 15,471 | | Between two and five years | 45,442 | 1,200 | 46,642 | | Over five years | 11,052 | 2,393 | 13,445 | | **Total** | **80,355** | **4,957** | **85,312** | Total Borrowings and Lease Liabilities Currency Mix (As at June 30, 2023) | Currency | Borrowings and Bonds (%) | Lease Liabilities (%) | Total (HKD million) | | :--- | :--- | :--- | :--- | | HKD | 85% | 58% | 71,068 | | USD | 5% | 4% | 4,510 | | RMB | 10% | 23% | 8,785 | | Others | 0% | 15% | 949 | | **Total** | **100%** | **100%** | **85,312** | - **64%** of the Group's total borrowings are at fixed rates, and **36%** are at floating rates[126](index=126&type=chunk) Net Debt to Capital Ratio and Interest Cover | Indicator | As at June 30, 2023 | As at December 31, 2022 | | :--- | :--- | :--- | | Net debt to capital ratio (excluding lease liabilities) | 21.4% | 18.0% | | Net debt to capital ratio (including lease liabilities) | 23.0% | 19.5% | | Interest cover | 4.8 | 8.3 | | Cash interest cover | 3.6 | 6.0 | | Underlying cash interest cover | 4.7 | 6.1 | - If the net debt of joint ventures and associates were added to the Group's net debt, the net debt to capital ratio would increase to **28.7%** as at June 30, 2023 (December 31, 2022: **27.6%**)[129](index=129&type=chunk) Review Report on Condensed Interim Financial Statements PwC's review concludes that the condensed interim financial statements for H1 2023 are prepared in all material respects in accordance with HKAS 34, without expressing an audit opinion [Review Conclusion](index=43&type=section&id=Review%20Report%20on%20Condensed%20Interim%20Financial%20Statements_Review%20Conclusion) PricewaterhouseCoopers has reviewed Swire Pacific Limited's condensed interim financial statements for the six months ended June 30, 2023, conducted in accordance with Hong Kong Standard on Review Engagements 2410, and while the scope is less than an audit, no matters were identified that would lead the auditor to believe the statements are not prepared in all material respects in accordance with HKAS 34 - PricewaterhouseCoopers has reviewed Swire Pacific Limited's condensed interim financial statements for the six months ended June 30, 2023[131](index=131&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope less than an audit, thus no audit opinion is expressed[132](index=132&type=chunk) - The review concluded that no matters were identified that would lead the auditor to believe the condensed interim financial statements are not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[133](index=133&type=chunk) Condensed Interim Financial Statements This section presents the company's consolidated income statement, comprehensive income, financial position, cash flows, and equity changes for the interim period [Consolidated Income Statement](index=44&type=section&id=Condensed%20Interim%20Financial%20Statements_Consolidated%20Income%20Statement) For the six months ended June 30, 2023, Swire Pacific reported revenue from continuing operations of **HKD 51.544 billion** and operating profit of **HKD 5.079 billion**, with profit for the period at **HKD 4.867 billion**, of which **HKD 4.221 billion** was attributable to company shareholders, and earnings per share (A shares) were **HKD 2.91** Consolidated Income Statement Summary (For the Six Months Ended June 30, 2023) | Indicator | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Revenue | 51,544 | 44,284 | | Gross profit | 19,208 | 16,936 | | Operating profit | 5,079 | 6,297 | | Net finance expenses | (1,057) | (683) | | Profit before tax | 6,516 | 3,912 | | Profit from continuing operations | 4,867 | 2,582 | | Profit for the period | 4,867 | 3,029 | | Profit attributable to company shareholders (from continuing operations) | 4,221 | 1,472 | | Profit attributable to non-controlling interests (from continuing operations) | 646 | 1,110 | | Earnings per share ('A' shares) | 2.91 | 0.98 | | Earnings per share ('B' shares) | 0.58 | 0.20 | [Consolidated Statement of Comprehensive Income](index=45&type=section&id=Condensed%20Interim%20Financial%20Statements_Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2023, Swire Pacific's profit for the period was **HKD 4.867 billion**, with a net other comprehensive loss of **HKD 3.447 billion**, primarily due to net exchange differences on overseas operations and cash flow hedge losses, resulting in a total comprehensive income for the period of **HKD 1.420 billion**, of which **HKD 1.285 billion** was attributable to company shareholders Consolidated Statement of Comprehensive Income Summary (For the Six Months Ended June 30, 2023) | Indicator | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Profit for the period | 4,867 | 3,029 | | Items that will not be reclassified to profit or loss (net) | (453) | (356) | | Items that may be reclassified subsequently to profit or loss (net) | (2,994) | (2,270) | | Other comprehensive loss for the period, after tax | (3,447) | (2,626) | | Total comprehensive income/(loss) for the period | 1,420 | 403 | | Total comprehensive income/(loss) attributable to company shareholders (from continuing operations) | 1,285 | (608) | | Total comprehensive income/(loss) attributable to non-controlling interests (from continuing operations) | 135 | 526 | - Net exchange differences on overseas operations recognized a loss of **HKD 1.481 billion** during the period, and cash flow hedges recognized a loss of **HKD 175 million** during the period[139](index=139&type=chunk) [Consolidated Statement of Financial Position](index=46&type=section&id=Condensed%20Interim%20Financial%20Statements_Consolidated%20Statement%20of%20Financial%20Position) As at June 30, 2023, Swire Pacific's total assets were **HKD 451.83 billion**, comprising **HKD 397.45 billion** in non-current assets and **HKD 54.38 billion** in current assets, while total liabilities amounted to **HKD 138.897 billion**, with **HKD 46.29 billion** in current liabilities and **HKD 92.607 billion** in non-current liabilities, resulting in net assets of **HKD 312.933 billion**, and equity attributable to company shareholders of **HKD 256.386 billion** Consolidated Statement of Financial Position Summary (As at June 30, 2023) | Indicator | As at June 30, 2023 (HKD million) | As at December 31, 2022 (HKD million) | | :--- | :--- | :--- | | Non-current assets | 397,450 | 394,027 | | Current assets | 54,380 | 40,739 | | **Total Assets** | **451,830** | **434,766** | | Current liabilities | 46,290 | 41,532 | | Non-current liabilities | 92,607 | 77,298 | | **Total Liabilities** | **138,897** | **118,830** | | **Net Assets** | **312,933** | **315,936** | | Equity attributable to company shareholders | 256,386 | 258,456 | | Non-controlling interests | 56,547 | 57,480 | | **Total Equity** | **312,933** | **315,936** | - The carrying amount of investment properties was **HKD 283.963 billion**, accounting for **71.4%** of non-current assets[140](index=140&type=chunk) - Bank balances and short-term deposits amounted to **HKD 13.44 billion**[141](index=141&type=chunk) [Consolidated Statement of Cash Flows](index=47&type=section&id=Condensed%20Interim%20Financial%20Statements_Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2023, Swire Pacific's net cash generated from operating activities was **HKD 5.153 billion**, while net cash used in investing activities amounted to **HKD 8.646 billion**, primarily for additions to investment properties and purchases of property, plant and equipment, and net cash generated from financing activities was **HKD 4.126 billion**, mainly from drawdowns and refinancing of borrowings, with cash and cash equivalents at the end of the period totaling **HKD 11.117 billion** Consolidated Statement of Cash Flows Summary (For the Six Months Ended June 30, 2023) | Indicator | 2023 (HKD million) | 2022 (HKD million) | | :--- | :--- | :--- | | Net cash generated from operating activities | 5,153 | 4,261 | | Net cash used in investing activities | (8,646) | (6,504) | | Net cash outflow before financing | (3,493) | (2,243) | | Net cash generated from/(used in) financing activities | 4,126 | (6,922) | | Increase/(decrease) in cash and cash equivalents | 633 | (9,165) | | Cash and cash equivalents at end of period | 11,117 | 12,862 | - Net cash used in investing activities was primarily for the purchase of property, plant and equipment and right-of-use assets (**HKD 1.721 billion**) and additions to investment properties (**HKD 1.332 billion**)[142](index=142&type=chunk) - Net cash generated from financing activities mainly came from drawdowns and refinancing of borrowings (**HKD 13.508 billion**), partially offset by repayment of borrowings and bonds (**HKD 4.556 billion**) and dividends paid (**HKD 3.697 billion**)[142](index=142&type=chunk) [Consolidated Statement of Changes in Equity](index=48&type=section&id=Condensed%20Interim%20Financial%20Statements_Consolidated%20Statement%20of%20Changes%20in%20Equity) As at June 30, 2023, Swire Pacific's share capital was **HKD 1.294 billion**, with equity attributable to company shareholders decreasing from **HKD 258.456 billion** at the beginning of the year to **HKD 256.386 billion**, primarily due to the combined effect of increased profit for the period, other comprehensive losses, share repurchases, and dividend payments, while non-controlling interests decreased from **HKD 57.48 billion** to **HKD 56.547 billion** Consolidated Statement of Changes in Equity Summary (For the Six Months Ended June 30, 2023) | Indicator | Balance as at January 1, 2023 (HKD million) | Balance as at June 30, 2023 (HKD million) | | :--- | :--- | :--- | | Share capital | 1,294 | 1,294 | | Retained earnings attributable to company shareholders | 255,167 | 256,039 | | Other reserves attributable to company shareholders | 1,995 | (947) | | **Total Equity attributable to company shareholders** | **258,456** | **256,386** | | Non-controlling interests | 57,480 | 56,547 | | **Total Equity** | **315,936** | **312,933** | - Profit for the period was **HKD 4.221 billion**, and other comprehensive loss was **HKD 2.942 billion**[143](index=143&type=chunk) - During the period, **HKD 680 million** was paid for share repurchases, and **HKD 2.675 billion** was paid for dividends[143](index=143&type=chunk) Notes to the Condensed Interim Financial Statements This section provides detailed notes on segment information, accounting policies, financial risk management, revenue, expenses, taxation, dividends, earnings per share, and asset movements [Segment Information](index=49&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Segment%20Information) Swire Pacific's business is segmented into Property, Beverages, Aviation, and Trading & Industrial, with the Head Office also considered a reportable segment, and for H1 2023, the Property division reported external revenue of **HKD 7.276 billion** and operating profit of **HKD 2.871 billion**, Beverages **HKD 30.445 billion** and **HKD 2.014 billion**, Aviation **HKD 8.464 billion** and **HKD 175 million**, and Trading & Industrial **HKD 5.355 billion** and **HKD 245 million**, with total Group assets at **HKD 451.83 billion** and total liabilities at **HKD 138.897 billion** - The Group's business is segmented into Property, Beverages, Aviation, and Trading & Industrial divisions, with the Head Office also considered a reportable segment[161](index=161&type=chunk) 2023 H1 External Revenue and Operating Profit by Division | Division | External Revenue (HKD million) | Operating Profit (HKD million) | | :--- | :--- | :--- | | Property | 7,276 | 2,871 | | Beverages | 30,445 | 2,014 | | Aviation | 8,464 | 175 | | Trading & Industrial | 5,355 | 245 | | Head Office, Healthcare and Others | 4 | (226) | | **Total** | **51,544** | **5,079** | Group Total Assets Analysis (As at June 30, 2023) | Division | Segment Assets (HKD million) | Joint Ventures (HKD million) | Associates (HKD million) | Bank Deposits (HKD million) | Total Assets (HKD million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property | 307,719 | 33,580 | 535 | 4,247 | 346,081 | | Beverages | 45,822 | 1,072 | 534 | 4,732 | 52,160 | | Aviation | 16,419 | 4,757 | 20,349 | 2,631 | 44,156 | | Trading & Industrial | 4,416 | 43 | - | 640 | 5,099 | | Head Office, Healthcare and Others | 1,101 | - | 2,043 | 1,190 | 4,334 | | **Total** | **375,477** | **39,452** | **23,461** | **13,440** | **451,830** | Group Total Liabilities and Non-controlling Interests Analysis (As at June 30, 2023) | Division | Segment Liabilities (HKD million) | External Borrowings (HKD million) | Lease Liabilities (HKD million) | Total Liabilities (HKD million) | Non-controlling Interests (HKD million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property | 9,938 | 33,098 | 653 | 47,472 | 52,476 | | Beverages | 19,435 | 88 | 653 | 27,212 | 433 | | Aviation | 4,284 | 42 | 2,552 | 9,534 | 1,784 | | Trading & Industrial | 1,770 | 92 | 1,099 | 2,985 | - | | Head Office, Healthcare and Others | 1,091 | 47,025 | - | 41,292 | - | | **Total** | **36,518** | **80,355** **4,957** | **138,897** | **56,547** | [Basis of Preparation](index=57&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Basis%20of%20Preparation) The condensed interim financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and the HKEX Listing Rules, using consistent accounting policies and methods as the 2022 annual financial statements, except for certain revised standards adopted from January 1, 2023, which had no significant impact on the Group's consolidated financial statements or accounting policies, and the Group has retrospectively applied accounting policy changes due to "Lessor Forgiveness of Lease Payments" and restated comparative figures for H1 2022 - The condensed interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules of The Stock Exchange of Hong Kong Limited[162](index=162&type=chunk) - The accounting policies and methods of computation used are consistent with those in the 2022 annual financial statements, except for certain revised standards adopted from January 1, 2023, which had no significant impact on the Group's consolidated financial statements or accounting policies[162](index=162&type=chunk)[163](index=163&type=chunk) - The Group has retrospectively applied the accounting policy changes due to "Lessor Forgiveness of Lease Payments" and restated the comparative figures for H1 2022[164](index=164&type=chunk) [Financial Risk Management](index=58&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Financial%20Risk%20Management) Swire Pacific is exposed to financial risks arising from interest rates, currency, credit, and liquidity in its normal business operations, and while the condensed interim financial statements do not include all financial risk management information and disclosures required by annual financial statements, the Group's financial risk management framework, policies, and procedures have not changed since year-end - The Group is exposed to financial risks arising from interest rates, currency, credit, and liquidity in its normal business operations[166](index=166&type=chunk) - The condensed interim financial statements do not include all financial risk management information and disclosures required by annual financial statements, but the Group's financial risk management framework, policies, and procedures have not changed since year-end[166](index=166&type=chunk) [Revenue](index=58&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Revenue) For the six months ended June 30, 2023, Swire Pacific's total revenue from continuing operations was **HKD 51.544 billion**, including gross rental income from investment properties of **HKD 6.656 billion**, revenue from sales of goods of **HKD 36.078 billion**, and revenue from aircraft and engine maintenance services of **HKD 7.622 billion** Revenue from Continuing Operations (For the Six Months Ended June 30, 2023) | Revenue Source | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Gross rental income from investment properties | 6,656 | 6,193 | | Property sales | 89 | 383 | | Hotels | 476 | 262 | | Sales of goods | 36,078 | 30,908 | | Aircraft and engine maintenance services | 7,622 | 5,883 | | Provision of other services | 623 | 655 | | **Total** | **51,544** | **44,284** | [Net Other (Losses)/Gains](index=59&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Net%20Other%20(Losses)%2FGains) For the six months ended June 30, 2023, Swire Pacific recorded a net other loss of **HKD 104 million**, compared to a net gain of **HKD 103 million** in the prior year, primarily driven by a **HKD 551 million gain** from the acquisition of an interest in a joint venture, but offset by a **HKD 411 million loss** from fair value changes of assets classified as held for sale, a net exchange loss of **HKD 79 million**, and a **HKD 239 million provision** for amounts due from a joint venture and other payables Net Other (Losses)/Gains (For the Six Months Ended June 30, 2023) | Item | 2023 (HKD million) | 2022 (HKD million) | | :--- | :--- | :--- | | Gain arising from acquisition of an interest in a joint venture | 551 | - | | Loss on disposal of property, plant and equipment | (18) | (3) | | Fair value changes of assets classified as held for sale | (411) | 49 | | Net exchange (loss)/gain | (79) | 159 | | Fair value loss on cross currency swaps transferred from cash flow hedge reserve | (99) | (82) | | Reversal of impairment losses recognised/(impairment losses) (property, plant and equipment) | 4 | (20) | | Reversal of impairment losses recognised/(impairment losses) (intangible assets) | (3) | (369) | | Provision for amounts due from a joint venture and other payables | (239) | - | | Government grants | 70 | 180 | | **Total** | **(104)** | **103** | [Expenses by Nature](index=60&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Expenses%20by%20Nature) For the six months ended June 30, 2023, Swire Pacific's total cost of sales, distribution costs, administrative expenses, and other operating expenses amounted to **HKD 45.031 billion**, including cost of goods sold of **HKD 24.07 billion**, staff costs of **HKD 9.754 billion**, and depreciation of property, plant and equipment of **HKD 1.536 billion** Expenses by Nature (For the Six Months Ended June 30, 2023) | Expense Item | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Direct lease expenses relating to investment properties | 1,483 | 1,382 | | Cost of goods sold | 24,070 | 20,380 | | Write-down of inventories and work-in-progress | 67 | 58 | | Impairment losses on trade receivables | 22 | 7 | | Depreciation of property, plant and equipment | 1,536 | 1,324 | | Depreciation of right-of-use assets | 483 | 414 | | Amortisation of intangible assets | 157 | 133 | | Staff costs | 9,754 | 8,907 | | Other lease expenses | 132 | 72 | | Other expenses | 7,233 | 6,014 | | **Total** | **45,031** | **38,793** | - Direct lease expenses relating to investment properties include impairment losses of **HKD 13 million** related to expected credit losses on waived operating lease receivables[169](index=169&type=chunk) [Net Finance Expenses](index=60&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Net%20Finance%20Expenses) For the six months ended June 30, 2023, Swire Pacific's net finance expenses amounted to **HKD 1.057 billion**, including interest expenses on bank borrowings and overdrafts of **HKD 700 million**, other borrowings and bonds of **HKD 719 million**, and lease liabilities of **HKD 102 million**, partially offset by capitalized interest of **HKD 340 million** and interest income of **HKD 226 million** Net Finance Expenses (For the Six Months Ended June 30, 2023) | Item | 2023 (HKD million) | 2022 (HKD million) | | :--- | :--- | :--- | | Interest expense on bank borrowings and overdrafts | 700 | 72 | | Interest expense on other borrowings and bonds | 719 | 807 | | Fair value (gain)/loss on derivative instruments | (23) | (14) | | Amortisation of borrowing costs | 52 | 44 | | Interest expense on lease liabilities | 102 | 93 | | Other finance costs | 66 | 65 | | Capitalised (investment properties and properties held for sale) | (340) | (274) | | Less: Interest income | (226) | (133) | | **Net finance expenses** | **1,057** | **683** | [Taxation](index=61&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Taxation) For the six months ended June 30, 2023, Swire Pacific's total tax expense was **HKD 1.649 billion**, comprising current tax of **HKD 1.373 billion** (including Hong Kong profits tax of **HKD 291 million** and overseas tax of **HKD 1.073 billion**) and deferred tax expense of **HKD 276 million**, mainly from fair value changes of investment properties and the origination and reversal of temporary differences, with the Group's share of tax expense from joint ventures and associates being **HKD 195 million** and **HKD 204 million**, respectively Tax Expense (For the Six Months Ended June 30, 2023) | Item | 2023 (HKD million) | 2022 (HKD million) (Restated) | | :--- | :--- | :--- | | Current tax (Hong Kong profits tax) | 291 | 280 | | Current tax (Overseas tax) | 1,073 | 886 | | Under/(over) provision in prior years | 9 | (2) | | Deferred tax (fair value changes of investment properties) | 88 | (34) | | Deferred tax (origination and reversal of temporary differences) | 188 | 203 | | **Total** | **1,649** | **1,330** | - The Group's share of tax expense from joint ventures was **HKD 195 million**, and from associates from continuing operations was **HKD 204 million**[172](index=172&type=chunk) [Dividends](index=61&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Dividends) Swire Pacific's Board of Directors has declared a first interim dividend for the year ending December 31, 2023, of **HKD 1.20 per 'A' share** and **HKD 0.24 per 'B' share**, totaling **HKD 1.73 billion**, an increase from the 2022 first interim dividend, with payment scheduled for October 13, 2023, to shareholders registered as at September 15, 2023 Declared First Interim Dividend | Share Class | Dividend per Share (HKD) | Total (HKD million) | | :--- | :--- | :--- | | 'A' shares | 1.20 | 1,730 | | 'B' shares | 0.24 | | | **Total** | | **1,730** | - Dividends will be paid on Friday, October 13, 2023, to shareholders registered on the register of members at the close of business on Friday, September 15, 2023[174](index=174&type=chunk) [Earnings Per Share (Basic and Diluted)](index=62&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Statements_Earnings%20Per%20Share%20(Basic%20and%20Diluted)) For the period en

Business Operations - Swire Properties operates over 2,200 retail outlets in its shopping malls, employing approximately 72,000 people in its office buildings in Hong Kong[7]. - Swire Coca-Cola distributes products to 782 million people across Greater China, the United States, and Cambodia, including 21 carbonated beverage brands[6]. - Cathay Pacific, along with its subsidiaries, operated a fleet of 222 aircraft by the end of 2022, providing services to 81 destinations across 30 countries and regions[7]. - Swire Group employs over 29,000 staff in Hong Kong and more than 35,000 in mainland China, with a global workforce of nearly 80,000[7]. - The company has established a solid business presence in key cities in mainland China, including Beijing, Guangzhou, Chengdu, Shanghai, Xi'an, and Sanya[7]. Financial Performance - The profit attributable to shareholders rose by 25% to HKD 4,195 million in 2022, compared to HKD 3,357 million in 2021[8]. - The basic earnings per share for 'A' shares increased by 25% to HKD 2.81 in 2022, up from HKD 2.24 in 2021[8]. - The total revenue decreased by 1% to HKD 91,693 million in 2022, down from HKD 92,830 million in 2021[8]. - The net cash generated from operations fell by 22% to HKD 12,043 million in 2022, compared to HKD 15,453 million in 2021[8]. - The net debt increased by 47% to HKD 56,759 million in 2022, up from HKD 38,655 million in 2021[8]. - The company's equity return increased to 1.6% in 2022 from 1.3% in 2021, representing a rise of 0.3 percentage points[8]. Investment and Development - The company aims to invest in the healthcare sector, particularly in private healthcare services in major urban areas in mainland China and Southeast Asia[7]. - The company is a long-term investor, focusing on maintaining controlling interests in its businesses to achieve sustainable returns[4]. - The company has made significant progress in its investment plan of HKD 100 billion announced in March 2022, with HKD 39 billion already allocated to new large property projects[19]. - Swire Properties has entered into a joint venture to develop the Xi'an Taikoo Li project, marking its seventh development project in mainland China[17]. - The company plans to invest HKD 100 billion over the next decade in property development projects in Hong Kong and mainland China, with HKD 30 billion allocated for Hong Kong projects[45]. Sustainability and Corporate Governance - Swire Group emphasizes sustainable development and long-term growth, focusing on core sectors in Greater China and Southeast Asia[4]. - The company maintains a strong commitment to corporate governance and sustainable practices, believing that these contribute to long-term growth[4]. - The company's sustainable development performance showed an 11% reduction in greenhouse gas emissions to 649 thousand tons of CO2 equivalent in 2022, down from 728 thousand tons in 2021[8]. - The group aims to achieve net-zero carbon emissions by 2050, with interim targets to reduce greenhouse gas emissions by 50% by 2030 compared to 2018 levels[21]. Market Challenges and Opportunities - The beverage segment faced challenges due to pandemic measures and rising costs, with Swire Coca-Cola reporting a profit of HKD 23.92 billion in 2022, down 6% from HKD 25.49 billion in 2021[19]. - The retail market in mainland China faced challenges due to pandemic-related measures, impacting sales and rental income[40]. - The group is actively seeking opportunities in mainland China and Southeast Asia for further growth in 2023[22]. - The company is optimistic about opportunities in the Greater Bay Area and continues to strengthen its position as an international financial and aviation hub[17]. Dividends and Share Repurchases - The company announced a second interim dividend of HKD 1.85 per 'A' share and HKD 0.37 per 'B' share, resulting in a total annual dividend of HKD 3.00 per 'A' share and HKD 0.60 per 'B' share, which is a 15% increase from 2021[19]. - The company repurchased 39,383,000 'A' shares and 44,425,000 'B' shares during 2022, with a total cash consideration of HKD 2.6 billion[18]. Sector-Specific Performance - The healthcare segment recorded a loss of HKD 170 million in 2022, compared to a loss of HKD 85 million in 2021, including a goodwill impairment of HKD 163 million related to Colombia China[191]. - The hotel segment reported a loss of HKD 259 million, compared to a loss of HKD 174 million in 2021[34]. - The automotive segment reported revenue of HKD 5.636 billion, a slight decrease from HKD 5.689 billion in 2021[192]. - The food segment recorded a loss of HKD 487 million in 2022, compared to a loss of HKD 45 million in 2021[192]. Future Outlook - The group expects significant positive impacts on its business in 2023 as COVID-19 restrictions are lifted in Hong Kong and mainland China, leading to a strong recovery in airline operations[22]. - The company anticipates a recovery in sales volume starting in the fourth quarter of 2022[143]. - The company expects the retail market in Hong Kong to recover following the reopening of borders with mainland China[196].

Financial Performance - Company's attributable profit for 2022 was HKD 1,891 million, compared to a loss of HKD 792 million in 2021[6] - Basic profit increased by 38% to HKD 1,729 million in 2022 from HKD 1,256 million in 2021[6] - Revenue decreased by 5% to HKD 44,596 million in 2022 from HKD 46,738 million in 2021[6] - Operating profit rose by 42% to HKD 6,760 million in 2022 from HKD 4,751 million in 2021[6] - Earnings per share for 'A' shares increased by 38% to HKD 1.15 in 2022 from HKD 0.84 in 2021[6] - Dividend per share for 'A' shares increased by 15% to HKD 1.15 in 2022 from HKD 1.00 in 2021[6] - Total equity (including non-controlling interests) increased by 1% to HKD 321,941 million in 2022 from HKD 319,136 million in 2021[6] - Cash flow from operations decreased by 42% to HKD 6,147 million in 2022 from HKD 10,657 million in 2021[6] - Swire Properties' basic profit for the first half of 2022 was HK$1.729 billion, compared to HK$1.256 billion in the same period last year[7] - Swire Coca-Cola's attributable profit for the first half of 2022 was HK$1.152 billion, a 22% decrease compared to the same period last year[9] - Cathay Pacific's loss decreased by 34% to HK$5 billion in the first half of 2022[10] - The company's attributable profit for the first half of 2022 was HKD 1.891 billion, compared to a loss of HKD 792 million in the first half of 2021[15] - The company's basic attributable profit, excluding investment property revaluations, was HKD 1.729 billion in the first half of 2022, compared to HKD 1.256 billion in the first half of 2021[15] - The company's recurring basic profit was HKD 1.249 billion in the first half of 2022, compared to HKD 786 million in the first half of 2021[15] - The company's property sector recorded a recurring basic profit of HKD 2.971 billion in the first half of 2022, compared to HKD 3.029 billion in the first half of 2021[15] - The company's Coca-Cola business recorded a profit of HKD 1.152 billion in the first half of 2022, a 22% decrease compared to HKD 1.471 billion in the first half of 2021[15] - The company's Coca-Cola business revenue increased by 0.5% to HKD 26.592 billion in the first half of 2022, while sales volume decreased by 8% to 896 million cases[15] - The company's aviation business achieved positive cash flow in the second quarter of 2022, with passenger capacity improving to 11% of pre-pandemic levels[15] - The group generated HKD 6.1 billion from operating activities and HKD 1 billion from business disposals in the first half of 2022[16] - Total revenue for the six months ended June 30, 2022, was HKD 6,698 million, compared to HKD 9,068 million in the same period in 2021[20] - The company's attributable profit for the six months ended June 30, 2022, was HKD 4,318 million, up from HKD 1,992 million in the same period in 2021[20] - The company's basic attributable profit for the six months ended June 30, 2022, was HKD 4,120 million, compared to HKD 4,490 million in the same period in 2021[22] - The company's recurring basic attributable profit for the six months ended June 30, 2022, was HKD 3,623 million, slightly down from HKD 3,693 million in the same period in 2021[22] - The company's property investment segment recorded a recurring basic profit of HKD 2,971 million for the six months ended June 30, 2022, down from HKD 3,029 million in the same period in 2021[23] - The company's retail property portfolio in Hong Kong was adversely affected by the fifth wave of the COVID-19 pandemic, particularly in the first quarter of 2022, but saw a recovery in foot traffic and tenant sales in May and June due to the easing of social distancing measures and the government's consumption voucher scheme[23] - The company's shopping malls in mainland China were affected by new waves of COVID-19 outbreaks, with malls in Shanghai closing in April and May and retail sales in Beijing being adversely impacted by outbreaks in May and June[24] - Swire Coca-Cola's revenue for the first half of 2022 was HKD 26.331 billion, with EBITDA of HKD 2.773 billion and operating profit of HKD 1.603 billion[43] - In Mainland China, Swire Coca-Cola's revenue for the first half of 2022 was HKD 13.029 billion, with EBITDA of HKD 1.514 billion and attributable profit of HKD 586 million[44] - Revenue in the US increased to HKD 10,567 million in the first half of 2022, up from HKD 9,269 million in the same period in 2021[45] - Total revenue for the first half of 2022 was HKD 26,592 million, a slight increase of 0.5% compared to HKD 26,466 million in the first half of 2021[45] - EBITDA margin for the first half of 2022 decreased to 11.1% from 12.4% in the first half of 2021[46] - EBIT margin for the first half of 2022 dropped to 6.8% from 8.5% in the first half of 2021[46] - Total sales volume decreased by 10% to 896 million cases in the first half of 2022[48] - Revenue from carbonated drinks decreased by 4%, while revenue from water and juice drinks fell by 27% and 3% respectively in the first half of 2022[48] - Revenue from energy drinks decreased by 3%, while revenue from premium categories such as coffee and tea drinks increased by 24% and 19% respectively in the first half of 2022[48] - Revenue in Hong Kong decreased by 8%, with sales volume dropping by 10% in the first half of 2022[48] - EBITDA increased by 12%, while EBIT decreased by 10%[49] - Total sales volume increased by 1%[49] - EBITDA margin rose from 12.0% in H1 2021 to 14.6% in H1 2022, while EBIT margin decreased from 7.6% to 7.4%[49] - Taiwan business profit decreased by 12% to HKD 53 million in H1 2022[49] - US business profit increased by 34% to HKD 554 million in H1 2022[49] - Revenue in local currency increased by 13% in the US, driven by price increases and slight volume growth[49] - Aviation sector recorded a loss of HKD 2.236 billion in H1 2022, compared to a loss of HKD 3.254 billion in H1 2021[51] - Cathay Pacific Group's loss attributable to shareholders was HKD 4.999 billion in H1 2022, compared to HKD 7.565 billion in H1 2021[52] - Revenue from carbonated drinks increased by 19%, while non-carbonated drinks increased by 5%[49] - Passenger revenue increased by 177.6% to HKD 2,068 million in the first half of 2022 compared to the same period in 2021[53][54] - Cargo revenue rose by 9.3% to HKD 12,148 million in the first half of 2022, with cargo yield increasing by 69.7% to HKD 5.72[53][57] - Available seat kilometers decreased by 26.6% to 3,059 million, while revenue passenger kilometers increased by 129.7% to 1,810 million in the first half of 2022[53] - Passenger load factor improved by 40.3 percentage points to 59.2% in the first half of 2022 compared to the same period in 2021[53][54] - Fuel costs increased by 55% to HKD 1,458 million in the first half of 2022, while non-fuel costs decreased by 5% to HKD 16,056 million[55] - Cargo load factor decreased by 5.6 percentage points to 75.8% in the first half of 2022, with cargo volume decreasing by 4.2% to 526 thousand tons[53][57] - The total fleet size of Cathay Pacific, HK Express, and Air Hong Kong was 228 aircraft as of June 30, 2022[56] - HK Express recorded a loss in the first half of 2022 due to strict travel restrictions and quarantine requirements affecting its operations[56] - Air Hong Kong reported a profit in the first half of 2022, despite challenges from quarantine requirements for Hong Kong-based crew[57] - The cost per available tonne kilometer (including fuel) increased by 32.4% to HKD 5.88 in the first half of 2022[53] - Cathay Pacific aims to increase passenger capacity to up to 25% of pre-pandemic levels and cargo capacity to up to 65% of pre-pandemic levels by the end of the year[60] - Cathay Pacific's total fleet as of June 30, 2022, consists of 228 aircraft, with an average age of 10.9 years[58] - Cathay Pacific has 21 Boeing 777-9 aircraft on order, with deliveries expected from 2024 onwards[58] - Cathay Pacific holds an 18.13% stake in Air China and a 24% stake in Air China Cargo as of June 30, 2022[59] - Air China's financial performance for the six months ended March 31, 2022, was negatively impacted by the COVID-19 pandemic[59] - Cathay Pacific expects improved performance in the second half of 2022 compared to the first half, but challenges remain for affiliated companies[60] - Revenue for the first half of 2022 reached HKD 6,557 million, a 21.4% increase compared to HKD 5,402 million in the same period of 2021[62] - Engine segment revenue grew significantly to HKD 2,569 million in H1 2022, up 52.2% from HKD 1,688 million in H1 2021[62] - Share of profits attributable to the company was HKD 166 million in H1 2022, compared to HKD 310 million in H1 2021, excluding non-recurring items[62] - Total base maintenance sold hours increased by 3% to 4.37 million hours in H1 2022 compared to 4.25 million hours in H1 2021[63] - Xiamen Taikoo's base maintenance sold hours grew 18% to 1.79 million hours in H1 2022[63] - HAECO Americas' base maintenance sold hours decreased by 11% to 1.29 million hours in H1 2022[63] - Engine overhaul volume at HAESL increased by 19% to 129 engines in H1 2022[63] - Cabin business recorded a loss of HKD 49 million in H1 2022, a 2% increase in loss compared to HKD 48 million in H1 2021[64] - HAECO Hong Kong's line maintenance handled 23,600 flights in H1 2022, a 7% increase from 22,100 flights in H1 2021[63] - Xiamen Taikoo benefited from unrealized foreign exchange gains in H1 2022, offsetting the impact of reduced government support in HAECO Americas[64] - The components business recorded a profit of HKD 230 million in the first half of 2022, a 32% decrease compared to the same period in 2021, while revenue increased by 23%[65] - The engine business saw a profit of HKD 250 million in the first half of 2022, an 81% increase year-over-year, with revenue rising by 52% due to increased demand for engine overhaul services[65] - Hong Kong Aircraft Engineering Company (HAECO) Xiamen completed 25 performance restoration projects and 6 quick-turn projects for GE90 engines in the first half of 2022, compared to 13 and 5 respectively in the same period in 2021[65] - The trading and industrial segment reported a loss of HKD 311 million in the first half of 2022, including non-recurring losses of HKD 367 million from goodwill impairment and HKD 57 million from long-term asset impairment at Qinyuan Food Company[69][70] - Swire Resources recorded a profit of HKD 13 million in the first half of 2022, compared to a loss of HKD 14 million in the same period in 2021, benefiting from the Hong Kong government's consumption voucher scheme and employment support program[71] - Global engine support services saw reduced profits in the first half of 2022 due to pandemic-related travel restrictions and decreased engine storage revenue[65] - The company expects stable demand for base maintenance services in the second half of 2022, with a gradual recovery in Hong Kong's line maintenance workload depending on the lifting of travel restrictions[65] - HAECO Xiamen is undergoing pre-construction work for the relocation to Xiamen's new airport, which is critical for its operations from 2026 onwards[65] - Net profit of Taikoo Environmental Services decreased to HKD 23 million in the first half of 2022 from HKD 41 million in the same period last year, primarily due to the absence of non-recurring gains from acquiring the remaining 50% equity of a joint venture[72] - Taikoo Motors' net profit increased to HKD 970 million in the first half of 2022 from HKD 820 million in the same period last year, with car sales rising by 3% to 8,330 units, despite a 3% decline in revenue due to unfavorable sales mix[72] - Taikoo Food Group recorded a net loss of HKD 437 million in the first half of 2022, compared to a net loss of HKD 31 million in the same period last year, with Qinyuan Food Company contributing a net loss of HKD 444 million, including non-recurring losses of HKD 367 million for goodwill impairment[72] - Taikoo Sugar Company's net profit decreased to HKD 7 million in the first half of 2022 from HKD 9 million in the same period last year, with a 6% decline in sugar product sales in Hong Kong but an increase in mainland China[72] - The company sold 6.7% of its equity in Cadeler A/S in February 2022, reducing its stake to 18.13%, and completed the sale of its 100% interest in Taikoo Offshore Group (excluding Cadeler) to Tidewater Inc. in April 2022[73] - Basic profit attributable to shareholders was HKD 1,729 million in the first half of 2022, compared to HKD 1,256 million in the same period last year, with adjustments for investment property valuation changes and deferred taxes[74] - The company expects Taikoo Motors to receive more car supplies in the second half of 2022, but performance is anticipated to be weaker due to unfavorable sales mix and exchange rate fluctuations[72] - Taikoo Environmental Services' performance is expected to be worse in the second half of 2022 compared to the first half[72] - Qinyuan Food Company plans to continue integrating its retail network and product categories, enhancing supply chain flexibility and efficiency to improve long-term performance[72] - Taikoo Sugar Company's food service business is expected to perform better in the second half of 2022 due to price increases, despite ongoing challenges from COVID-19 restrictions[72] - The company's basic profit attributable to shareholders for the six months ended June 30, 2022, was HKD 1,729 million, compared to HKD 1,256 million in the same period in 2021[75] - The recurring basic profit for the six months ended June 30, 2022, was HKD 1,249 million, up from HKD 786 million in the same period in 2021[75] - The property division contributed HKD 2,971 million to the recurring basic profit for the six months ended June 30, 2022, slightly down from HKD 3,029 million in the same period in 2021[76] - The beverage division's recurring basic profit for the six months ended June 30, 2022, was HKD 1,152 million, compared to HKD 1,471 million in the same period in 2021[76] - The Cathay Pacific Group reported a loss of HKD 2,385 million for the six months ended June 30, 2022, an improvement from a loss of HKD 3,146 million in the same period in 2021[76] - Cash generated from operations for the six months ended June 30, 2022, was HKD 6,147 million, down from HKD 10,657 million in the same period in 2021[77] - The company's total borrowings and lease liabilities as of June 30, 2022, were HKD 57,508 million and HKD 5,059 million, respectively[78] - As of June 30, 2022, the company had HKD 83,108 million in committed financing, of which HKD 25,464 million (31%) remained undrawn[79] - The company held HKD 13,597 million in bank balances and short-term deposits as of June 30, 2022, compared to HKD 22,894 million as of December 31, 2021[79] - Total

Financial Performance - In 2021, the company's equity return improved to 1.3%, up from -4.1% in 2020, representing a 5.4 percentage point increase [7]. - The company reported a profit attributable to shareholders of HKD 3,364 million, a significant recovery from a loss of HKD 10,999 million in the previous year [8]. - Basic profit for the year was HKD 5,300 million, compared to a loss of HKD 3,969 million in 2020 [8]. - The company achieved a recurring basic profit of HKD 4,885 million, a recovery from a loss of HKD 609 million in the previous year [8]. - Revenue increased to HKD 92,403 million, up 15% from HKD 80,032 million [9]. - Operating profit surged to HKD 10,522 million, a 290% increase from HKD 2,695 million [9]. - The company reported a significant reduction in losses for its aviation segment, with a notable decrease in impairment charges [15]. - The company reported a net profit of HKD 15.5 billion from operations, with an additional HKD 7.4 billion generated from asset sales and capital investments totaling HKD 13.2 billion [29]. - The group reported a consolidated profit attributable to shareholders of HKD 3.36 billion in 2021, a significant improvement from a loss of HKD 10.99 billion in 2020 [28]. - The company reported a loss of HKD 1,931 million from investment property valuation in 2021, an improvement from a loss of HKD 4,421 million in 2020 [44]. Dividends and Shareholder Returns - The 'A' share dividend per share increased by 53% to HKD 2.60, compared to HKD 1.70 in 2020 [7]. - Basic earnings per share for 'A' shares improved to HKD 3.53 from a loss of HKD 2.64 [10]. - Basic earnings per share for 'B' shares increased to HKD 0.71 from a loss of HKD 0.53 [10]. - The company aims to maintain a dividend policy that targets continuous growth, planning to distribute no less than 1/3 of its earnings [15]. - The group plans to maintain a dividend policy that ensures at least half of the recurring net profit is distributed as dividends, excluding contributions from Cathay Pacific [28]. Business Segments and Investments - The beverage division distributed Coca-Cola products to a population of 762 million in Greater China and the United States [5]. - The company is focusing on expanding its business in healthcare and sustainable food sectors under a new division called "Swire Investments" [4]. - The company plans to continue seeking investment opportunities in private healthcare services, particularly in major urban areas in mainland China [5]. - Swire Properties plans to invest over HKD 100 billion in various development projects over the next decade, with more than half allocated to mainland China [18]. - The company plans to invest HKD 7 billion in a new retail-led integrated development project in Xi'an, China [15]. - Swire Group aims to invest over HKD 20 billion in healthcare businesses in mainland China over the next decade [18]. Market and Operational Insights - The beverage sector, specifically Swire Coca-Cola, achieved a record profit, increasing by 23% compared to the previous year, with overall sales rising by 8% [16]. - The company emphasized digital innovation and improved product offerings as key drivers for future growth [28]. - The company is actively developing new products to meet changing consumer preferences, particularly in the beverage sector [29]. - The retail market in Hong Kong showed signs of recovery in 2021, but the resurgence of COVID-19 in early 2022 has impacted this recovery [116]. - The company is committed to sustainable development, integrating environmental, social, and governance elements into its operations [16]. Real Estate and Property Development - The recurring basic profit for the real estate sector remained stable at HKD 58.24 billion, compared to HKD 58.34 billion in the previous year [16]. - The real estate sector's recurring net profit, excluding gains from property sales, was HKD 5.82 billion in 2021, stable compared to HKD 5.83 billion in 2020 [28]. - The total floor area of completed properties in Hong Kong is 12 million square feet, with an additional 1.2 million square feet under construction [39]. - The total area of properties under development and planned reached 27,046 thousand square feet, indicating ongoing expansion efforts [43]. - The company has a 50% interest in the South Island Place project, which had an occupancy rate of 88% as of December 31, 2021 [56]. Aviation Sector Performance - Cathay Pacific recorded a significant reduction in losses, down 74% to HKD 5.5 billion from HKD 21.6 billion, attributed to strong cargo performance and effective cost management [16]. - Cathay Pacific recorded a loss attributable to shareholders of HKD 55.27 billion in 2021, compared to a loss of HKD 216.48 billion in 2020 [162]. - The airline's passenger revenue for 2021 was HKD 4.34 billion, a decrease of 62% compared to 2020, with passenger traffic down 85% [163]. - Cargo revenue increased by 32% to HKD 32.37 billion in 2021, with a cargo load factor rising by 8.1 percentage points to 81.4% [165]. - The average age of the fleet increased to 10.5 years in 2021 from 10.1 years in 2020 [160]. Challenges and Future Outlook - The company anticipates maintaining passenger capacity at approximately 20% of pre-pandemic levels if current restrictions persist [175]. - The company expects significant revenue growth in mainland China for 2022, driven by improved product and packaging mix [145]. - The company anticipates that raw material costs and operating expenses will increase, putting pressure on profits [145]. - The hotel business in Hong Kong is facing challenges due to COVID-19, but domestic tourism in mainland China is expected to continue recovering [116]. - The company continues to focus on effective cash and cost management amid ongoing operational challenges [171].

Financial Performance - The company reported a loss attributable to shareholders of HKD 792 million for the six months ended June 30, 2021, compared to a loss of HKD 7,737 million in the same period last year, representing a 90% decrease[5]. - Basic earnings per share for 'A' shares was HKD 0.84, recovering from a loss of HKD 3.65 in the previous year, while 'B' shares reported HKD 0.17, compared to a loss of HKD 0.73[5]. - Revenue increased by 20% to HKD 46,738 million from HKD 39,056 million year-on-year[5]. - Operating profit reached HKD 4,751 million, a significant recovery from a loss of HKD 1,670 million in the previous year[5]. - The company generated cash from operations of HKD 10,657 million, up 106% from HKD 5,176 million in the prior year[5]. - The group reported a recurring basic profit of HKD 786 million for the first half of 2021, compared to a loss of HKD 123 million in the same period of 2020[6]. - The group’s total revenue for the six months ended June 30, 2021, was HKD 46,738 million, an increase from HKD 39,056 million for the same period in 2020, representing a growth of approximately 19.3%[130]. - The total profit for the group was HKD 17,884 million, compared to HKD 14,962 million for the same period in 2020, reflecting a growth of approximately 19.4%[117]. Debt and Equity - The net debt decreased by 21% to HKD 39,081 million from HKD 49,277 million, improving the capital net debt ratio to 12.2%[5]. - The net debt-to-equity ratio as of June 30, 2021, was 12.2%, with available liquid funds amounting to HKD 54.6 billion[6]. - The company’s total borrowings and bonds decreased to HKD 63,114 million as of June 30, 2021, from HKD 68,164 million at the beginning of the year[101]. - The company’s total liabilities decreased to HKD 110,000 million from HKD 115,000 million, reflecting improved financial stability[119]. - The net debt-to-equity ratio was 12.2% as of June 30, 2021, down from 15.6% in 2020[109]. - The total amount of borrowings and lease liabilities due within one year was HKD 17.956 billion, representing 27% of total liabilities[105]. Dividends - The company declared an interim dividend of HKD 1.00 per 'A' share, a 43% increase from HKD 0.70 in the previous year[5]. - The interim dividend was increased by 43% to HKD 1.00 per 'A' share and HKD 0.20 per 'B' share, compared to the first interim dividend in 2020[6]. - The company aims to maintain a dividend policy of distributing at least half of recurring basic profit, excluding contributions from its associate company, Cathay Pacific[6]. - The company paid dividends amounting to HKD (2,386) million during the period, compared to HKD (3,360) million in the previous year[100]. Real Estate and Property - The property division generated a recurring basic profit of HKD 3.29 billion in the first half of 2021, compared to HKD 3.67 billion in the same period of 2020[10]. - The real estate sector was the largest source of profit for the group, contributing HKD 6.53 billion from recurring basic profit excluding gains from the sale of investment properties[10]. - The property investment portfolio in Hong Kong totals 12 million square feet, with an additional 1.2 million square feet under construction[13]. - The total revenue for the real estate segment reached HKD 9,068 million, a significant increase from HKD 6,551 million in the previous year, representing a growth of 38.5%[16]. - The valuation loss on investment properties was HKD 2,513 million, a decrease from HKD 2,601 million, indicating improved asset performance[18]. Aviation Sector - Cathay Pacific's losses decreased from HKD 99 billion to HKD 76 billion, aided by strong cargo performance and cost-saving measures[9]. - The aviation sector recorded a loss of HKD 3.25 billion in the first half of 2021, while the loss for the same period in 2020 was HKD 9.25 billion, showing a reduction in losses[10]. - Cathay Pacific expects to adjust passenger capacity to 30% of pre-pandemic levels by Q4 2021, depending on operational and passenger restrictions[12]. - The aviation segment generated revenue of HKD 9,047 million, reflecting a decrease of 3% compared to the previous period[123]. - Cathay Pacific's passenger revenue for the first half of 2021 was HKD 745 million, a decrease of 92.8% compared to the same period in 2020[47]. Beverage Segment - The beverage segment, Swire Coca-Cola, saw profits increase by 55% and 97% compared to the first half of 2020 and 2019, respectively[8]. - The beverage segment reported revenues of HKD 26,832 million for the six months ended June 30, 2021, compared to HKD 21,251 million for the same period in 2020, representing a growth of approximately 26.5%[65]. - In mainland China, the attributable profit for the first half of 2021 was HKD 1.02 billion, a 75% increase year-on-year, with revenue in local currency up by 25%[71]. - Total revenue from Hong Kong increased by 28% to HKD 27.55 billion, with sales volume rising by 16% to 974 million cases[71]. - The EBITDA margin for the beverage segment improved to 12.0% in the first half of 2021, compared to 11.3% in the same period of 2020[70]. Investment and Future Plans - The company aims to maintain long-term growth through sustainable development and innovation, focusing on the Greater China region[4]. - The company plans to continue investing in the healthcare sector and has identified multiple investment opportunities in mainland China[6]. - The group plans to invest at least HKD 20 billion in the healthcare sector by 2030, establishing it as a significant business[11]. - The company has ongoing development projects in Hong Kong, Indonesia, and Vietnam, with land reserves in Miami, USA, indicating a strategic focus on market expansion[15]. - The company is exploring potential mergers and acquisitions to enhance its market position[123].

Company Operations - The company operates over 2,000 retail points in its shopping malls under the property division, with an estimated 70,000 people working in its office buildings[10]. - At the end of 2020, the beverage division distributed Coca-Cola products to a population of 741 million in Greater China and the United States, including 15 carbonated and 45 non-carbonated beverage brands[10]. - Cathay Pacific, along with its subsidiaries, operated a fleet of 239 aircraft by the end of 2020, connecting Hong Kong to 119 destinations across 35 countries[10]. - The company employed over 34,000 staff in Hong Kong and over 30,000 in mainland China, with a total global workforce exceeding 86,000[10]. - The marine services division operated a fleet of 61 vessels by the end of 2020, providing support services to the offshore energy industry[10]. - The group’s bakery business operated 546 stores in Southwest China by the end of 2020[10]. - The company has developed six retail-focused integrated projects in major cities in mainland China, including Beijing, Shanghai, Guangzhou, and Chengdu[10]. Financial Performance - The company's return on equity decreased to -4.1% from 3.3%, a decline of 7.4 percentage points[12]. - The earnings per share for 'A' shares dropped to -7.32 HKD from 6.00 HKD, while 'B' shares fell to -1.46 HKD from 1.20 HKD[12]. - Total revenue for the year was 80,032 million HKD, a decrease of 7% from 85,652 million HKD[12]. - Operating profit plummeted by 80% to 2,695 million HKD from 13,792 million HKD[12]. - The net cash inflow from operations increased by 18% to 15,124 million HKD from 12,817 million HKD[12]. - The net debt decreased by 17% to 38,900 million HKD from 46,688 million HKD[12]. - The total equity, including non-controlling interests, declined by 3% to 319,146 million HKD from 329,494 million HKD[12]. - The basic loss per share for 'A' shares was -2.64 HKD compared to a profit of 11.85 HKD in the previous year[12]. - The company recorded a basic loss of HKD 3.969 billion in 2020, compared to a profit of HKD 17.797 billion in 2019, marking the first basic loss since its listing in 1959[19]. - The regular basic loss for 2020 was HKD 609 million, a significant decline from a profit of HKD 7.221 billion in 2019[19]. - The capital debt ratio at the end of 2020 was 12.2%, down from 14.2% at the end of 2019, indicating a stable financial position[19]. - The company’s property portfolio value slightly decreased, contributing to a drop in equity return from 3.3% in 2019 to -4.1% in 2020[19]. - The aviation sector, particularly Cathay Pacific, faced severe challenges, resulting in a loss of HKD 21.6 billion for the year[19]. - The company reported a consolidated loss attributable to shareholders of HKD 10.99 billion for 2020, compared to a profit of HKD 9.07 billion in 2019[32]. - The recurring basic loss after excluding significant non-recurring items for 2020 was HKD 6.09 billion, while in 2019, it recorded a profit of HKD 72.21 billion[32]. - The real estate sector contributed the largest share of the company's performance, with recurring basic profit of HKD 58.34 billion in 2020, down from HKD 62.69 billion in 2019[32]. - The aviation sector recorded a loss of HKD 9.75 billion in 2020, compared to a profit of HKD 1.55 billion in 2019, significantly impacted by the COVID-19 pandemic[32]. - The company’s regular profit from the trading and industrial sector was HKD 1.2 billion in 2020, compared to HKD 4.1 billion in 2019[32]. - The company announced a second interim dividend of HKD 1.00 per 'A' share and HKD 0.20 per 'B' share for 2020[32]. Sustainability and Governance - The company is committed to sustainable development and long-term growth, focusing on creating stable dividend returns for shareholders[9]. - The company maintains a strong corporate governance standard and aims to enhance its brand and reputation[9]. - The company is a long-term investor, emphasizing holding controlling interests in businesses for sustained growth[9]. - Greenhouse gas emissions reduced by 57% to 8.4 million tons CO2 equivalent from 19.3 million tons[12]. - Energy consumption decreased by 58% to 112.1 million gigajoules from 264.3 million gigajoules[12]. - The company launched "SwireTHRIVE 2.0" in 2020, focusing on five priority areas including climate, water resources, waste, employees, and community[19]. Market Outlook and Challenges - The company anticipates regular losses in the first half of 2021 due to ongoing challenges from the COVID-19 pandemic[23]. - The company remains confident in its long-term development, supported by the vibrant economic growth in Mainland China and its solid financial position[23]. - The company expects a substantial increase in revenue from its U.S. operations in 2021[34]. - The company anticipates that the demand for high-end residential properties in Jakarta will remain stable due to urbanization and a growing middle class[34]. - The hotel business in Hong Kong is facing challenges, with recovery dependent on travel restrictions and vaccination progress[34]. - The company expects a moderate recovery in the office market in Guangzhou, Shanghai, and Beijing, but faces challenges due to new supply and weak demand[113]. - The company plans to invest heavily in capital expenditures despite the weak market conditions[34]. - The company plans to focus on investment opportunities in the Greater China region, with a total capital commitment of HKD 26.7 billion[19]. Retail and Property Performance - The total floor area of completed properties in Hong Kong is 12 million square feet, with an additional 1.2 million square feet under construction[50]. - The total area of completed properties was 22,681 thousand square feet, down from 22,950 thousand square feet in 2019[55]. - The total area of properties under development and awaiting development is 27,046 thousand square feet, an increase from 26,520 thousand square feet in 2019[55]. - The occupancy rate for Taikoo Place was 98% as of December 31, 2020, while the overall office portfolio was 96% leased[72][71]. - The occupancy rate for South Island Place was 87% as of December 31, 2020, with the company holding a 50% interest in this development[73]. - The rental income for the newly completed retail development in Shanghai, Qiantan Taikoo Li, is expected to begin trial operations in the second half of 2021[79]. - The company provided rental support to tenants during the pandemic, which was amortized over the remaining lease terms[74]. - The rental income from mainland China properties for 2020 was HKD 2.491 billion, an increase of 5% compared to 2019[78]. - The rental income for Guangzhou Taikoo Hui, Chengdu Ocean Taikoo Li, and Shanghai Xingye Taikoo Hui increased by 36%, 6%, and 15% respectively in 2020[78]. - The rental income for Beijing Yintai Center was HKD 358 million, a decrease of 6% from 2019[79]. - The occupancy rates for Guangzhou Taikoo Hui and Beijing Yintai Center were 95% and 70% respectively as of December 31, 2020[79]. - The company plans to expand the Yintai Center in Beijing, with a total gross floor area of 4.083 million square feet, expected to be completed in phases by the end of 2025 and 2027[69]. Aviation Sector Performance - The company experienced a significant decline in passenger revenue, which dropped to only 2% to 3% of pre-pandemic levels in 2020[32]. - The company received government support of HKD 26.89 billion related to the COVID-19 pandemic[32]. - The company’s operational environment in 2020 was extremely challenging, with a substantial reduction in passenger flights and cargo capacity[32]. - The average age of the fleet was 10.1 years, slightly down from 10.3 years in 2019, indicating a stable fleet management strategy[135]. - The company recorded a significant reduction in flight operations, with aircraft utilization dropping by 63.9% to 4.3 hours per day[135]. - The cargo revenue increased by 16.2% to HKD 24.573 billion, with cargo yield rising by 58.3% to HKD 2.96 per ton kilometer[135]. - The company implemented a capital restructuring plan amounting to HKD 39 billion in August 2020 to ensure operational continuity[137]. - The total number of aircraft in the Cathay Pacific Group fleet as of December 31, 2020, was 239, with 92 passenger aircraft (44% of the fleet) relocated outside Hong Kong[143]. - The company plans to modernize its fleet and enhance efficiency through the introduction of new aircraft models[142]. - The company has entered into agreements with Airbus and Boeing regarding the delivery schedules of new aircraft, indicating a strategic focus on fleet modernization[142]. Beverage Division Performance - The beverage division reported annual sales of 1.743 billion standard cases in 2020[172]. - The company aims to expand its product portfolio and enhance digitalization across its markets as part of its strategic goals[164]. - Total revenue increased by 2% to HKD 45,657 million, while sales volume decreased by 2% to 1.743 billion cases[177]. - Revenue from the mainland China segment was HKD 22,942 million, a 1% increase from HKD 22,087 million in 2019, while operating profit was HKD 1,041 million, up from HKD 856 million[174]. - The company experienced a decline in sales volume in Hong Kong by 12%, while Taiwan and the US saw revenue and sales volume increases of 9% and 7%, respectively[176]. - The energy drink segment saw a revenue increase of 24% in mainland China, indicating strong demand for premium beverage categories[184]. - The attributable profit for the U.S. business was HKD 797 million, a 45% increase after excluding non-recurring gains from the sale of a sales center in 2019[188]. - The company successfully launched new products and improved its product mix, leading to a 9% increase in soft drink revenue in Hong Kong[188].

Financial Performance - The company reported a loss attributable to shareholders of HKD 7,737 million for the six months ended June 30, 2020, a decrease of 197% compared to a profit of HKD 7,939 million in the same period last year[8]. - Basic loss per share for 'A' shares was HKD (5.15), down 197% from HKD 5.29 in the previous year[8]. - Revenue for the period was HKD 39,056 million, representing a 9% decrease from HKD 42,870 million in the prior year[8]. - Operating loss was HKD (1,670) million, a decline of 115% compared to an operating profit of HKD 10,866 million in the previous year[8]. - The group recorded a profit attributable to shareholders of HKD 534 million for the first half of 2020, a decrease from HKD 535 million in the same period of 2019[57]. - The total profit for the period was HKD 14,962 million, down 8.3% from HKD 16,317 million year-on-year[120]. - The group reported a net loss of HKD 3,951 million from other income/expenses for the six months ended June 30, 2020[140]. Dividends - The company declared an interim dividend of HKD 0.70 per 'A' share, a decrease of 48% from HKD 1.35 in the previous year[8]. - The board declared an interim dividend of HKD 0.70 per 'A' share and HKD 0.14 per 'B' share, reflecting a reduction in dividends due to the challenging business environment[10]. - The company declared dividends totaling HKD 2,478 million during the six months ended June 30, 2020, a decrease of 8.3% compared to HKD 2,703 million in the previous year[123]. Cash Flow and Liquidity - The net cash inflow from operations was HKD 5,176 million, an increase of 18% from HKD 4,368 million in the previous year[8]. - The company’s net cash flow from financing activities showed an increase of HKD 3,830 million during the six months ended June 30, 2020[105]. - The cash and cash equivalents held by the company were HKD 22,432 million as of June 30, 2020, compared to HKD 21,345 million as of December 31, 2019[106]. - The company’s total assets as of June 30, 2020, were HKD 67.832 billion, reflecting changes in currency exchange rates and asset sales[150]. Debt and Liabilities - The net debt was HKD 49,277 million, reflecting a 1% increase from HKD 48,630 million in the previous year[8]. - The total liabilities increased to HKD 71,709 million as of June 30, 2020, from HKD 68,033 million as of December 31, 2019[105]. - The company has 74% of its borrowings arranged at fixed interest rates and 26% at floating rates as of June 30, 2020, compared to 73% and 27% respectively as of December 31, 2019[111]. - The total borrowings for the Cathay Pacific Group reached HKD 55,154 million as of June 30, 2020, up from HKD 41,904 million at the end of 2019[114]. Segment Performance - The aviation segment, specifically Cathay Pacific Group, reported an operating loss of HKD 4,440 million for the period[125]. - The property investment segment generated external revenue of HKD 6,121 million, with an operating profit of HKD 4,317 million, while the hotel segment reported an external revenue of HKD 274 million and an operating loss of HKD 197 million[125]. - The beverage segment in mainland China achieved external revenue of HKD 10,904 million, with an operating profit of HKD 867 million[125]. - The trading and industrial segment reported an operating profit of HKD 1,287 million, with a significant loss of HKD 611 million attributed to other expenses[126]. Impairments and Valuations - The company incurred a significant impairment loss of HKD 5,380 million on property, plant, and equipment for the six months ended June 30, 2020[103]. - The group recognized an impairment loss of HKD 4,361 million on property, plant, and equipment for the six months ended June 30, 2020[140]. - The fair value loss on investment properties for the six months ended June 30, 2020, was HKD 2.601 billion, resulting in a carrying amount of HKD 272.684 billion[152]. Market Outlook - The company anticipates a soft demand for office space in Hong Kong in the second half of 2020 due to economic weakness[14]. - The beverage market in Hong Kong is expected to be negatively impacted by the COVID-19 pandemic in the second half of 2020, leading to increased depreciation and operating costs[76]. - The company plans to continue focusing on strategic expansions and new product developments to enhance market presence and recover from the impacts of the pandemic[134].

Financial Performance - Total revenue for 2019 was HKD 85,652 million, a 1% increase from HKD 84,606 million in 2018[8] - Operating profit decreased by 55% to HKD 13,792 million from HKD 30,888 million in the previous year[8] - Profit attributable to shareholders dropped by 62% to HKD 9,007 million compared to HKD 23,629 million in 2018[8] - Cash generated from operations fell by 30% to HKD 12,817 million from HKD 18,328 million in 2018[8] - Net cash inflow before financing increased by 28% to HKD 22,910 million from HKD 17,919 million in the previous year[8] - Total equity, including non-controlling interests, rose by 1% to HKD 329,494 million from HKD 325,115 million[8] - The company's attributable basic profit reached HKD 17,797 million, representing a 109% increase compared to HKD 8,523 million in the previous year[10] - Basic earnings per share for 'A' shares increased by 109% to HKD 11.85, while 'B' shares rose to HKD 2.37, also a 109% increase[10] - The company reported a profit attributable to shareholders of HKD 11,007 million in 2019, a significant decrease of 53% from HKD 23,437 million in 2018[47] Debt and Equity Management - Net debt decreased by 25% to HKD 46,688 million from HKD 62,667 million in 2018[8] - The net debt to equity ratio improved to 14.2%, down by 5.1 percentage points from 19.3% in the previous year[8] - The net debt-to-capital ratio at the end of 2019 was 14.2%, down from 19.3% at the end of 2018, with cash and undrawn financing amounting to HKD 40 billion[13] - The company maintained a dividend of HKD 3.00 per share, unchanged from the previous year[7] - The company maintained its dividend at the same level as 2018, distributing approximately 48% of basic profit as dividends over the past five years[14] Sector Performance - The company reported stable overall performance in the property sector, with encouraging rental income growth from retail properties in mainland China[11] - The real estate sector was the largest source of profit, contributing HKD 62.69 billion in recurring profit, compared to HKD 61.77 billion in 2018[29] - The aviation sector recorded a profit of HKD 1.55 billion in 2019, down from HKD 1.78 billion in 2018, mainly due to the poor performance of Cathay Pacific[29] - The marine services sector recorded a recurring loss of HKD 1.34 billion in 2019, compared to a loss of HKD 1.12 billion in 2018[29] - The trading and industrial sector's recurring profit was HKD 41 million in 2019, up from HKD 16.4 million in 2018[29] Challenges and Future Outlook - The company anticipates significant challenges in 2020 due to the adverse effects of the COVID-19 pandemic, particularly impacting Cathay Pacific, with expected recurring losses in the first half of 2020[20] - The company is committed to sustainable development, focusing on reducing carbon footprint and responsible water usage among other priorities[18] - The company plans to continue its strategy of maintaining a diversified business portfolio to navigate market challenges effectively[11] - The company expects an increase in office vacancy rates in Hong Kong and mainland China due to rising supply and weak demand, leading to downward pressure on rental prices[118] Property Development and Management - The total floor area of completed properties in Hong Kong, including hotels, is 12.6 million square feet, with an additional 1.2 million square feet under construction[41] - In mainland China, the total area of commercial developments will reach 9.8 million square feet, with 9 million square feet already completed[41] - The company completed the acquisition of low-cost airline Hong Kong Express in July 2019 to support long-term investment plans[31] - The company is actively managing its assets through optimization, redevelopment, and acquisition strategies to enhance profitability[45] - The company plans to continue expanding its property portfolio in both Hong Kong and mainland China[61] Retail and Hospitality Performance - The retail sales in Hong Kong have been adversely affected by social events and economic uncertainty, with a notable impact from the COVID-19 pandemic on aircraft usage and maintenance demand[33] - The hotel segment reported a revenue of HKD 1,296 million in 2019, down from HKD 1,404 million in 2018, a decline of 7.7%[47] - The occupancy rates and revenue of Taikoo Properties' hotels have significantly declined due to the pandemic[32] - The company is providing temporary rental support to retail tenants on a case-by-case basis[119] Aviation Sector Insights - Cathay Pacific Group's revenue for 2019 was HKD 15,901 million, an increase from HKD 14,892 million in 2018, representing a growth of 6.8%[133] - The passenger revenue for Cathay Pacific Group was HKD 72,168 million in 2019, a decline of 1.3% compared to HKD 73,119 million in 2018[135] - The cargo revenue for the group decreased by 15.9% to HKD 23,810 million in 2019 from HKD 28,316 million in 2018[135] - Cathay Pacific expects significant losses in the first half of 2020 due to a sharp decline in travel demand and the impact of the COVID-19 pandemic[150] Beverage Sector Performance - In 2019, the company's revenue reached HKD 43,317 million, an increase of 5% from HKD 41,190 million in 2018[176] - The energy drink category saw significant growth, with revenue increasing by 101% and sales volume by 99%[184] - The beverage market in Hong Kong is anticipated to face challenges in 2020, with rising operating costs impacting profitability[197] - The company plans to expand its market presence and enhance product offerings in the coming years[178]