SWIRE PACIFIC A(HK:00019)2020-04-07 08:30Financial 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] - The return on equity for 2019 was 3.3%, down from 9.0% in 2018, reflecting a decline of 5.7 percentage points[7] - 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 from HKD 5.68, while 'B' shares rose to HKD 2.37 from HKD 1.14[10] - The adjusted recurring profit for 2019 was HKD 10.59 billion, compared to HKD 9.51 billion in 2018, reflecting a significant increase[29] - The company reported a net profit attributable to shareholders of HKD 11,007 million in 2019, a significant decrease of 53% compared to HKD 23,437 million in 2018[47] Debt and Equity - Total equity, including non-controlling interests, rose by 1% to HKD 329,494 million from HKD 325,115 million[8] - 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%, a decrease of 5.1 percentage points from 19.3%[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] Dividends - 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] - The company announced a second interim dividend of HKD 1.65 per 'A' share and HKD 0.33 per 'B' share, totaling HKD 3.00 per 'A' share and HKD 0.60 per 'B' share for the year[30] Sector Performance - The real estate sector was the largest source of profit, contributing HKD 62.69 billion in recurring profit, up from HKD 61.77 billion in 2018[29] - The aviation sector reported a profit of HKD 1.55 billion in 2019, down from HKD 1.78 billion in 2018, primarily due to challenges faced by Cathay Pacific[29] - The recurring profit from Swire Coca-Cola in 2019 was HKD 1.58 billion, an increase from HKD 1.35 billion in 2018[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] Market Challenges - 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 noted a significant decline in office rental demand in Hong Kong starting in the second half of 2019 due to social events[29] - The retail sales in Hong Kong have been adversely affected by the COVID-19 pandemic, social events, and economic uncertainty, with a forecasted decline in aircraft maintenance demand due to reduced flight numbers[33] - The company anticipates a decline in rental income from retail properties and serviced apartments due to the impact of the COVID-19 pandemic[32] Property Development - 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 sale of its 100% interest in two office buildings in Taikoo City in April 2019 and a 50% interest in another office building in July 2019[58] - A joint venture was established in July 2019 to acquire land in Jakarta for a residential project expected to provide over 400 units, slated for completion in 2023[58] - The company plans to relocate its facilities to a new airport in Xiamen, with discussions ongoing with local authorities[31] Future Outlook - The company plans to continue its long-term growth strategy, reflecting ongoing growth in mainland China and maintaining Hong Kong's status as a major international financial center[20] - The company expects stable office rental rates in Shanghai due to high occupancy rates in the Jing'an core business district despite weak demand[32] - The company anticipates that the demand for residential properties in the medium to long term will remain stable despite current weaknesses in the market[33] - The company plans to continue expanding its property portfolio in the future[61] Cathay Pacific Performance - 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 operating profit for Cathay Pacific Group was HKD 1,048 million in 2019, down from HKD 1,140 million in 2018, reflecting a decrease of 8.1%[133] - The passenger revenue for Cathay Pacific Group was HKD 72,168 million, a decline of 1.3% from HKD 73,119 million in 2018[135] - The cargo revenue for the group decreased by 15.9% to HKD 23,810 million from HKD 28,316 million in 2018[135] - Cathay Pacific's financial performance for the year ending September 30, 2019, showed improvement compared to the previous year, with a significant gain from the sale of part of its stake in China Cargo Airlines, recording a profit of HKD 114 million[149] HAECO Performance - The revenue for Hong Kong Aircraft Engineering Company (HAECO) was HKD 15,901 million in 2019, an increase from HKD 14,892 million in 2018, reflecting a growth of approximately 6.8%[152] - HAECO's attributable profit for 2019 was HKD 825 million, up from HKD 760 million in 2018, indicating an increase of about 8.6%[155] - HAECO's operating profit for 2019 was HKD 1,048 million, down from HKD 1,140 million in 2018, reflecting a decrease of approximately 8.1%[152] - HAECO's share of profit from Hong Kong Aircraft Engineering Company increased by 11% to HKD 415 million, driven by an increase in the number of engines serviced[161] Swire Coca-Cola Performance - In 2019, Swire Coca-Cola recorded attributable profit of HKD 1.686 billion, including non-recurring gains of HKD 85 million from the sale of a factory in Yunnan, China, and HKD 17 million from the sale of a sales center in the US[180] - Total revenue increased by 5% to HKD 44.719 billion, with sales volume rising by 2% to 1.786 billion standard boxes[180] - In mainland China, attributable profit was HKD 941 million, with a 35% increase in profit after excluding non-recurring gains from the sale of a factory[191] - In Hong Kong, attributable profit decreased by 10% to HKD 207 million, with total sales volume down by 3%[193]