SWIRE PACIFIC A(00019)2024-08-08 04:00Financial Performance - The company's profit attributable to shareholders for the first half of 2024 is HKD 3,914 million, a decrease of 7% compared to HKD 4,221 million in the same period last year[6]. - Revenue for the first half of 2024 is HKD 39,563 million, down 23% from HKD 51,544 million in the previous year[6]. - The operating profit for the first half of 2024 is HKD 4,945 million, a decline of 3% from HKD 5,079 million in the same period last year[6]. - The company's cash generated from operations is HKD 5,307 million, a decrease of 26% compared to HKD 7,206 million in the previous year[6]. - The group's consolidated profit attributable to shareholders for the first half of 2024 was HKD 31.914 billion, compared to HKD 42.221 billion in the same period of 2023, reflecting a decrease of approximately 24.4%[9]. - The recurring basic profit attributable to shareholders, excluding changes in investment property values, was HKD 55.776 billion, slightly down from HKD 55.994 billion in the first half of 2023[9]. - The company reported a net profit attributable to shareholders of HKD 543 million for the first half of 2024, down from HKD 651 million in the same period of 2023[61]. - The company reported a profit attributable to shareholders of HKD 597 million for the first half of 2024, including a non-recurring gain of HKD 197 million from the disposal of non-current assets in a joint venture in mainland China[86]. Dividends and Earnings Per Share - The basic earnings per share for 'A' shares is HKD 3.90, an increase of 1% from HKD 3.86 in the previous year[6]. - The interim dividend per share for 'A' shares is HKD 1.25, up 4% from HKD 1.20 in the previous year[6]. - The company declared an interim dividend of HKD 1.25 per 'A' share and HKD 0.25 per 'B' share, representing a 4% increase from the previous interim dividend[14]. - Basic earnings per share for 'A' shares was HKD 2.74, compared to HKD 2.91 in the same period last year, reflecting a decrease of 5.8%[122]. Debt and Financial Position - The net debt is HKD 63,479 million, down 5% from HKD 66,915 million in the previous year[6]. - The capital net debt ratio, excluding lease liabilities, is 19.8%, a decrease of 1.6 percentage points from 21.4% last year[6]. - The company has a strong financial position with available liquid funds of HKD 46.8 billion and a net debt-to-equity ratio of 19.8% as of June 30, 2024[15]. - The total borrowings and debt securities as of June 30, 2024, amounted to HKD 109,723 million, with HKD 30,046 million remaining undrawn[109]. - The weighted average debt maturity decreased to 2.8 years from 3.2 years in 2023, while the weighted average cost of debt increased to 4.0% from 3.8%[111]. - The net debt-to-equity ratio as of June 30, 2024, was 19.8%, a decrease from 21.4% as of December 31, 2023[115]. Sector Performance - The aviation sector continued to drive strong performance, with Cathay Pacific achieving a profit of HKD 36.613 billion in the first half of 2024, compared to HKD 42.668 billion in the same period of 2023[12]. - Swire Properties reported a recurring basic profit of HKD 28.998 billion for the first half of 2024, down 9% from HKD 31.888 billion in the same period of 2023[10]. - Swire Coca-Cola recorded a recurring profit of HKD 8.778 billion in the first half of 2024, a decrease from HKD 16.727 billion in the same period of 2023, primarily due to the sale of Swire Coca-Cola USA[11]. - The beverage segment reported revenues of HKD 17,139 million for the six months ended June 30, 2024, compared to HKD 30,446 million for the same period in 2023, reflecting a decrease of approximately 43%[60]. - The company anticipates challenges in revenue due to sluggish local consumption in mainland China, but stable raw material costs and effective cost management efforts are expected to alleviate profit pressure[66]. Investment and Expansion Plans - The company aims to focus on long-term growth in the Greater China and Southeast Asia regions, with plans to expand into healthcare and other new sectors[3]. - The group has committed 65% of its HKD 100 billion investment plan in property development projects in core markets as of August 2, 2024[8]. - The company plans to invest over HKD 100 billion in the next seven years across fleet, cabin products, digital upgrades, and sustainability initiatives[20]. - The group is focusing on expanding its healthcare services platform and seeking investment opportunities in major urban areas in mainland China and Southeast Asia[20]. - The company has committed HKD 9.39 billion in capital contributions for joint ventures in mainland China[53]. Market Conditions and Challenges - The hotel business in Hong Kong is recovering slower than expected, while performance in mainland China remains relatively stable[30]. - The outlook for the Hong Kong office market remains weak, with rental pressures expected to continue in the second half of 2024[38]. - The company anticipates continued pressure on sales in the second half of 2024 due to ongoing trends of local residents traveling abroad and reduced tourist spending[104]. - The company expects market confidence and sentiment to take time to recover after interest rate hikes, despite a stable outlook for the premium residential property market in Shanghai[57]. Operational Efficiency and Cost Management - The company plans to focus on expanding its market presence and enhancing product offerings in the upcoming quarters[63]. - The company has initiated new strategies for operational efficiency and cost management to improve profitability moving forward[63]. - The company plans to continue its management and operational strategies to enhance revenue growth and control costs effectively[66]. Real Estate and Property Investments - The company has nine residential development projects underway, with four located in Hong Kong and five in other countries including Indonesia and Vietnam[24]. - The company reported a total operating profit from property investment of HKD 4,385 million, up from HKD 4,250 million in the previous year[25]. - The investment property portfolio was valued at HKD 279.54 billion as of June 30, 2024, down from HKD 280.59 billion as of December 31, 2023, reflecting a decline in fair value of investment properties[49]. - The company has successfully completed the acquisition of a 49.895% equity interest in the Yidi Port Phase II project, increasing its stake from 35%[31]. Healthcare Sector Developments - The group completed the acquisition of a controlling stake in Dada Healthcare in April 2024, marking its first major investment in the healthcare sector[13]. - The company reported a loss of HKD 132 million in its healthcare business for the first half of 2024, compared to a loss of HKD 80 million in the same period of 2023[97]. - The company made an investment in Indonesia Healthcare Corporation (IHC) in July 2024, marking its first entry into the Southeast Asian healthcare market[98]. Share Repurchase and Capital Management - The group repurchased 26,380,000 'A' shares and 29,112,500 'B' shares in the first half of 2024, totaling HKD 2.014 billion[14]. - The company repurchased shares amounting to HKD 2,006 million during the six months ended June 30, 2024[107].