Financial Performance - Total revenue for 2018 was HKD 84,606 million, representing a 5% increase from HKD 80,289 million in 2017[8] - Operating profit decreased by 14% to HKD 30,888 million from HKD 35,864 million in the previous year[8] - Profit attributable to shareholders was HKD 23,629 million, down 9% from HKD 26,070 million in 2017[8] - Cash generated from operations was HKD 18,328 million, a decrease of 7% compared to HKD 19,605 million in 2017[8] - The total equity, including non-controlling interests, increased by 6% to HKD 325,115 million from HKD 306,094 million[8] - Net debt decreased by 14% to HKD 62,667 million from HKD 72,514 million in the previous year[8] - The net debt to equity ratio improved to 19.3%, down 4.4 percentage points from 23.7%[8] - Earnings per share for 'A' shares increased by 43% to HKD 3.00 from HKD 2.10 in 2017[7] - Return on equity for 2018 was 9.0%, down from 10.9% in 2017, a decline of 1.9 percentage points[7] - The company reported a basic profit of HKD 10,160 million for 2018, compared to HKD 7,809 million in 2017, marking an increase of approximately 30%[48] - The net profit attributable to the company was HKD 23,437 million in 2018, down from HKD 27,731 million in 2017, a decrease of about 15.5%[47] Dividends and Shareholder Returns - The total dividend declared for the year is HKD 3.00 per 'A' share and HKD 0.60 per 'B' share, representing a 43% increase from the previous year[14] - The company aims to achieve a dividend payout ratio of 53%, down from 67% in the previous year, as part of its strategy for sustainable growth[14] Business Segments and Operations - The company operates a diversified business across five sectors: property, aviation, beverages, marine services, and trading and industrial[5] - The real estate sector was the largest source of profit for the group, contributing HKD 61.77 billion in recurring basic profit, compared to HKD 63.86 billion in 2017[28] - The aviation sector turned a profit in 2018, reflecting improved operating performance from Cathay Pacific and Hong Kong Aircraft Engineering Company, which reported a recurring profit of HKD 7.28 billion[28] - Swire Beverages expanded its product and packaging portfolio and invested in production assets and logistics infrastructure in 2018[30] Capital Expenditures and Investments - Swire Properties is investing HKD 15 billion to redevelop Taikoo Place in Hong Kong, with the first phase completed in 2018 and the second phase expected to be completed in 2021 or 2022[29] - The group’s capital allocation in 2018 included HKD 18.3 billion from operating activities and HKD 14 billion from business disposals, with total capital investments of HKD 14.6 billion[30] - The company plans to expand its retail properties in mainland China, particularly in Beijing and Guangzhou, where demand remains strong[52] Market Conditions and Outlook - The company remains cautiously optimistic about maintaining good momentum in most businesses in 2019 despite macroeconomic uncertainties[21] - The real estate sector in Hong Kong is expected to maintain stable rental rates due to high occupancy rates, while retail sales are projected to remain steady[31] - Cathay Pacific anticipates a challenging business environment in 2019, with a strong US dollar and geopolitical tensions negatively impacting cargo demand[31] - The beverage sector in mainland China, Hong Kong, and Taiwan is expected to see revenue growth in 2019, outpacing volume growth, while the US beverage market is projected to show moderate growth[31] Sustainability and Corporate Responsibility - The company reported a 55% increase in water consumption to 17.1 million cubic meters, indicating a focus on sustainability[11] - The company is committed to sustainability, focusing on reducing water usage and waste generation[170] - The company is establishing a joint venture to set up Hong Kong's first dedicated PET and HDPE plastic recycling facility[190] Challenges and Risks - The business environment for 2019 is expected to remain challenging, with a strong US dollar and geopolitical tensions negatively impacting cargo and passenger demand[153] - Operational constraints and increased costs are anticipated due to competitive pressures, particularly in long-haul economy cabins[153] Performance of Subsidiaries - Cathay Pacific Group reported a net profit of HKD 6 billion in 2018, with a return on capital employed of 8%[127] - The group reported a revenue of HKD 14,892 million for 2018, an increase from HKD 14,546 million in 2017, representing a growth of 2.4%[133] - The group’s revenue from Hong Kong Aircraft Engineering Company (HAECO) was HKD 4,253 million in 2018, an increase from HKD 4,041 million in 2017[155] Future Plans and Strategies - The group aims to strengthen Hong Kong's position as a hub for aviation services, including passenger and cargo operations[132] - The group plans to maintain high service quality in passenger, cargo, and aircraft engineering services[132] - The airline will expand its route network to more destinations not currently served from Hong Kong and increase frequencies on popular routes[153]
太古股份公司B(00087) - 2018 - 年度财报