SWIRE PACIFIC A(HK:00019)2021-09-06 08:31Financial 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, a significant recovery from a loss of HKD 3.65 in the previous year [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 turnaround from an operating loss of HKD 1,670 million in the prior year [5]. - The group recorded a consolidated loss attributable to shareholders of HKD 7.92 billion in the first half of 2021, an improvement from a loss of HKD 77.37 billion in the same period of 2020 [10]. - The recurring basic profit for the first half of 2021 was HKD 786 million, compared to a recurring basic loss of HKD 1.23 billion in the same period of 2020 [10]. - The profit attributable to shareholders was HKD 1,992 million, up from HKD 1,045 million, marking an increase of 90.5% year-on-year [18]. - The group reported a total comprehensive income of HKD 1,639 million for the period, compared to a loss of HKD 792 million in the previous period [169]. Cash Flow and Debt Management - Cash generated from operations doubled to HKD 10,657 million, up 106% from HKD 5,176 million [5]. - The net debt decreased by 21% to HKD 39,081 million compared to HKD 49,277 million in the previous year [5]. - The company maintained a capital net debt ratio of 12.2%, down from 15.6% [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 had total borrowings of HKD 63,114 million as of June 30, 2021, down from HKD 68,164 million at the beginning of the year [101]. - The net cash used in investment activities was HKD (6,198) million, reflecting a decrease from HKD (1,925) million in the previous year [100]. - The company’s cash and short-term deposits decreased to HKD 24,033 million from HKD 29,264 million at the end of 2020 [119]. - The group’s total liabilities reached HKD 110,556 million as of June 30, 2021, with non-controlling interests at HKD 56,307 million [128]. Dividends and Shareholder Returns - The interim dividend for 'A' shares was increased by 43% to HKD 1.00 from HKD 0.70 in the previous year [5]. - The first interim dividend declared is HKD 1.00 per 'A' share and HKD 0.20 per 'B' share, to be distributed on October 6, 2021 [11]. - The company aims to maintain a dividend policy that ensures sustainable growth, targeting to distribute at least half of recurring basic profits as dividends in the future [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]. Sector Performance - The property division was the largest source of profit for the group, with 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 beverage segment, Swire Coca-Cola, saw profits increase by 55% and 97% compared to the first half of 2020 and 2019, respectively [8]. - The aviation sector recorded a loss of HKD 3.25 billion in the first half of 2021, compared to a loss of HKD 9.25 billion in the same period of 2020 [10]. - The hotel business showed improvement, with performance in mainland China and the United States recovering [10]. - The property segment in mainland China recorded a valuation gain of HKD 1.181 billion, while the Hong Kong investment properties experienced a valuation loss of HKD 34.33 billion [8]. Future Outlook and Strategic Initiatives - The company is focused on sustainable development and long-term growth, emphasizing innovation and operational excellence [4]. - The company plans to continue investing in the healthcare sector and has identified multiple investment opportunities in the real estate sector in mainland China [6]. - The company expects the performance of Swire Properties to continue improving, particularly in mainland China, with several new real estate projects announced [6]. - The company plans to enhance its property portfolio through strategic partnerships and new developments in key markets [23]. - The company plans to invest at least HKD 20 billion in the healthcare sector by 2030, establishing it as a significant business [11]. Market Conditions and Challenges - The hotel business in Hong Kong remains challenging due to COVID-19 and travel restrictions, with recovery dependent on vaccination progress and border reopening [39]. - The real estate sector is expected to see strong retail market prospects in mainland China, while the outlook for Hong Kong remains uncertain [12]. - The anticipated completion of the redevelopment project "Taikoo Place Two" is expected in the first half of 2022, with a total floor area of approximately 1 million square feet [28]. - The company is adapting to market conditions and managing costs prudently, with expectations for the second half of 2021 to be similar to the first half [87].