国泰航空(00293) - 2025 - 中期业绩

Announcement Overview This section provides a high-level summary of Cathay Group's business, financial performance, and fleet information Company and Business Scope Cathay Pacific Airways Limited and its subsidiaries (Cathay Group) primarily offer products and services across four business areas: Cathay Pacific, Cathay Cargo, Lifestyle Business, and HK Express - Cathay Group's four core businesses include Cathay Pacific (passenger), Cathay Cargo, Lifestyle Business, and HK Express (low-cost airline)[3] Financial and Operating Summary Cathay Group achieved HKD 54.309 billion in revenue for H1 2025, a 9.5% YoY increase, with profit attributable to shareholders of HKD 3.651 billion, up 1.1% YoY Cathay Group H1 2025 Key Financial and Operating Statistics | Indicator | H1 2025 (HKD million/unit) | H1 2024 (HKD million/unit) | Change | | :--- | :--- | :--- | :--- | | Financial Statistics | | | | | Revenue | 54,309 | 49,604 | +9.5% | | Profit attributable to Cathay Group shareholders | 3,651 | 3,613 | +1.1% | | Basic earnings per ordinary share (HK cents) | 56.7 | 52.4 | +8.2% | | Diluted earnings per ordinary share (HK cents) | 54.8 | 47.0 | +16.6% | | Dividend per ordinary share (HK cents) | 20 | 20 | - | | Profit margin (%) | 6.7 | 7.3 | -0.6 percentage points | | Net borrowings | 56,342 | 57,941 | -2.8% | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | | Operating Statistics (Company) | | | | | Available tonne kilometers (million) | 13,699 | 11,822 | +15.9% | | Revenue tonne kilometers (million) | 9,701 | 8,214 | +18.1% | | Cost per available tonne kilometer (incl. fuel) (HKD) | 3.28 | 3.42 | -4.1% | | Aircraft utilization (daily hours) | 10.8 | 9.0 | +20.0% | | Average fleet age (years) | 12.3 | 11.5 | +0.8 years | | Operating Statistics (Cathay Pacific) | | | | | Available seat kilometers (million) | 66,792 | 52,881 | +26.3% | | Revenue passenger kilometers (million) | 56,651 | 43,583 | +30.0% | | Passenger load factor (%) | 84.8 | 82.4 | +2.4 percentage points | | Passenger yield (HK cents) | 60.4 | 68.9 | -12.3% | | Operating Statistics (Cathay Cargo) | | | | | Available cargo tonne kilometers (million) | 7,336 | 6,788 | +8.1% | | Cargo revenue tonne kilometers (million) | 4,302 | 4,063 | +5.9% | | Cargo load factor (%) | 58.6 | 59.9 | -1.3 percentage points | | Cargo yield (HKD) | 2.59 | 2.68 | -3.4% | | Operating Statistics (HK Express) | | | | | Available seat kilometers (million) | 8,810 | 6,370 | +38.3% | | Revenue passenger kilometers (million) | 6,947 | 5,415 | +28.3% | | Passenger load factor (%) | 78.9 | 85.0 | -6.1 percentage points | | Passenger yield (HK cents) | 43.2 | 55.1 | -21.6% | Fleet Information As of June 30, 2025, Cathay Group's total fleet comprised 234 aircraft with an average age of 11.5 years, with 93 aircraft on order, indicating continuous investment in future expansion Cathay Group Fleet Overview (as of June 30, 2025) | Aircraft Type | Total (units) | Average Age (years) | On Order (units) | | :--- | :--- | :--- | :--- | | Company (Passenger) | 179 | 12.3 | 71 | | A321/A320-200neo | 16 | 2.6 | 14 | | A330-300 | 43 | 16.8 | 0 | | A330-900 | 0 | - | 30 | | A350-900 | 30 | 7.2 | 0 | | A350-1000 | 18 | 5.6 | 0 | | 777-300 | 17 | 23.2 | 0 | | 777-300ER | 35 | 12.7 | 0 | | 777-9 | 0 | - | 21 | | Company (Cargo) | 20 | 14.0 | 6 | | A350F Freighter | 0 | - | 6 | | 747-400ERF Freighter | 6 | 16.5 | 0 | | 747-8F Freighter | 14 | 12.4 | 0 | | HK Express | 41 | 7.6 | 22 | | Air Hong Kong | 14 | 13.1 | 0 | | Total | 234 | 11.5 | 93 | - The Group holds rights to acquire an additional 103 aircraft and possesses sufficient financing capacity to support fleet investments[7] Chairman's Letter and Group Performance This section covers the Chairman's message, overall group performance, and details on bond repurchases and liquidity Chairman's Letter The Chairman expressed satisfaction with Cathay Group's robust financial performance and achievements amidst uncertainties, highlighting the Group's solid foundation, network expansion, and enhanced customer experience - Cathay Pacific and HK Express have launched or announced 19 new routes, with passenger flights to over 100 destinations worldwide, and all aircraft are fully resourced and operational[8] - Cathay Pacific was ranked among the top three best airlines globally by Skytrax, also winning "World's Best Economy Class" and "World's Best Inflight Entertainment"; Cathay Cargo was named "Cargo Operator of the Year" by Air Transport World; HK Express was listed among the top five "World's Best Low-Cost Airlines" by Airline Ratings[8] Cathay Group Overall Performance Cathay Group reported a profit attributable to shareholders of HKD 3.651 billion for H1 2025, a 1.1% YoY increase, driven by increased passenger volume, stable cargo operations, and lower fuel prices Cathay Group H1 2025 Profit Attributable to Shareholders | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Profit attributable to Cathay Group shareholders | 3,651 | 3,613 | +1.1% | | Earnings per ordinary share (HK cents) | 56.7 | 52.4 | +8.2% | | Share of results of associates (loss) | (181) | (342) | -47.1% | - The Group declared a first interim dividend of HKD 20 cents per ordinary share, totaling HKD 1.288 billion[9] Bond Repurchase and Liquidity The Group repurchased approximately 68% of its 2026 convertible bonds in early 2025, demonstrating confidence in long-term business prospects, with available unrestricted liquidity of HKD 21.504 billion as of June 30, 2025 - Approximately 68% (HKD 4.558 billion) of the 2026 secured convertible bonds were repurchased in early January 2025, with an outstanding principal of HKD 2.164 billion[10] Cathay Group Liquidity Position | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | Performance of Four Core Businesses This section details the performance of Cathay Pacific Passenger, Cathay Cargo, Lifestyle Business, and HK Express Cathay Pacific Passenger Cathay Pacific Passenger revenue grew 14.0% to HKD 34.208 billion in H1 2025, with passenger volume up 30.0% and load factor increasing to 84.8%, despite a 12.3% decline in yield due to increased market capacity Cathay Pacific Passenger H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Passenger revenue | HKD 34.208 billion | HKD 30.017 billion | +14.0% | | Available seat kilometers (million) | 66,792 | 52,881 | +26.3% | | Revenue passenger kilometers (million) | 56,651 | 43,583 | +30.0% | | Passengers carried (thousand) | 13,627 | 10,660 | +27.8% | | Load factor (%) | 84.8 | 82.4 | +2.4 percentage points | | Yield (HK cents) | 60.4 | 68.9 | -12.3% | Regional Market Performance Cathay Pacific increased capacity and flights across all major regional markets, with significant growth in the Americas, South Asia, Middle East, and Africa, improving overall load factor despite yield declines due to market competition Cathay Pacific Passenger Regional Performance (H1 2025) | Region | Capacity Change (%) | Load Factor Change (percentage points) | Yield Change (%) | | :--- | :--- | :--- | :--- | | Americas | +35.6% | -0.9 | -17.5% | | Southeast Asia & Oceania | +20.9% | +5.3 | -10.7% | | North Asia | +17.6% | +3.2 | -14.3% | | Europe | +24.5% | - | -1.5% | | South Asia, Middle East & Africa | +41.3% | +5.7 | -9.0% | | Overall | +26.3% | +2.4 | -12.3% | - Launched Urumqi route, increased summer flights to major mainland China cities, and introduced code-share shuttle buses to enhance Greater Bay Area connectivity[21][22] - Commenced direct flights to Dallas Fort Worth International Airport, with plans to increase to daily service by October 2025[22] - Resumed seasonal service to Rome and launched first direct passenger flights to Munich[25] Cathay Cargo Cathay Cargo revenue grew 2.2% to HKD 11.141 billion in H1 2025, with cargo volume up 5.9% and total tonnage carried increasing by 11.4%, demonstrating adaptability in reallocating capacity across its global network despite slight declines in load factor and yield Cathay Cargo H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Cargo revenue | HKD 11.141 billion | HKD 10.902 billion | +2.2% | | Available cargo tonne kilometers (million) | 7,336 | 6,788 | +8.1% | | Cargo revenue tonne kilometers (million) | 4,302 | 4,063 | +5.9% | | Cargo carried (thousand tonnes) | 801 | 719 | +11.4% | | Cargo load factor (%) | 58.6 | 59.9 | -1.3 percentage points | | Cargo yield (HKD) | 2.59 | 2.68 | -3.4% | - Cathay Cargo, as the largest cargo operator at Hong Kong International Airport, contributed to HKIA being ranked the world's busiest air cargo airport for the 14th time[25] Regional Market Performance Cargo operations faced uncertainties like tariff changes across regions but successfully adapted to demand shifts by flexibly reallocating capacity, particularly in the Americas and Southeast Asia, with high-tech electronics, fresh goods, and pharmaceuticals driving growth - US tariff increases and the elimination of de minimis exemptions negatively impacted cargo demand, but demand rebounded after temporary tariff reductions, with increased cargo volumes offsetting e-commerce decline[25] - Increased trans-Pacific cargo flights to meet peak season demand, with strong demand for "Valuable Cargo" and "Special Cargo" from the Americas to Asia[25] - Southeast Asia performed strongly driven by demand to the Americas, with good performance in high-tech electronics, apparel, general cargo, and fresh goods[25] - Strong demand for general cargo in mainland China, significant growth in high-tech electronics to India and Southwest Pacific markets, and robust growth in mail and pharmaceutical shipments[29] - European routes saw increased general cargo export tonnage, continued growth in pharmaceutical and fresh cargo solutions, and successful transport of Terracotta Warriors and artifacts to Perth for exhibition[25][29] Lifestyle Business The Lifestyle Business continues to grow with an increasing number of active Cathay members, and will further expand payment, insurance, lifestyle partnerships, Cathay Holidays, and Cathay Dining to build customer engagement beyond travel - The Lifestyle Business aims to build deep customer relationships and foster loyalty through Asia Miles and sales of new products like hotels, retail, experiences, and insurance[28] HK Express HK Express reported a loss before net finance costs and tax of HKD 524 million in H1 2025, compared to a profit of HKD 66 million in the prior year, with load factor and yield declining due to earthquake rumors affecting Japan travel and new routes requiring time to mature, despite significant growth in passenger volume and available seat kilometers HK Express H1 2025 Key Data | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Passenger revenue | HKD 3.004 billion | HKD 3.004 billion | Similar | | Available seat kilometers (million) | 8,810 | 6,370 | +38.3% | | Revenue passenger kilometers (million) | 6,947 | 5,415 | +28.3% | | Passengers carried (thousand) | 3,791 | 2,839 | +33.5% | | Load factor (%) | 78.9 | 85.0 | -6.1 percentage points | | Yield (HK cents) | 43.2 | 55.1 | -21.6% | | Profit/(Loss) before net finance costs and tax | (HKD 524 million) | HKD 66 million | Turnaround from profit to loss | - The loss was primarily due to travelers temporarily avoiding popular destinations like Japan due to earthquake rumors, and new routes requiring time to mature[14] Financial Review This section provides a detailed analysis of Cathay Group's revenue, operating expenses, operating results, fuel costs, and financial position Revenue Analysis Cathay Group's total revenue reached HKD 54.309 billion in H1 2025, a 9.5% YoY increase, with passenger services revenue up 12.7%, cargo services revenue up 1.2%, and other services and recoveries revenue up 8.7% Cathay Group H1 2025 Revenue Composition | Revenue Category | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Passenger services | 37,212 | 33,004 | +12.7% | | Cargo services | 12,761 | 12,610 | +1.2% | | Other services and recoveries | 4,336 | 3,990 | +8.7% | | Total Revenue | 54,309 | 49,604 | +9.5% | - Cathay Pacific passenger revenue increased by 14.0%, with available seat kilometers increasing by 26.3%; Cathay Cargo revenue increased by 2.2%, with available cargo tonne kilometers increasing by 8.1%[30] Operating Expenses Analysis Cathay Group's total operating expenses for H1 2025 were HKD 48.383 billion, a 10.7% YoY increase, with significant growth in staff costs, in-flight services and passenger expenses, landing, parking, and en-route charges, and a rise in net fuel costs Cathay Group H1 2025 Operating Expenses Composition | Expense Category | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Staff | 9,382 | 7,770 | +20.7% | | In-flight services and passenger expenses | 2,583 | 1,957 | +32.0% | | Landing, parking and en-route charges | 8,076 | 6,572 | +22.9% | | Fuel (incl. hedging loss/(gain)) | 14,654 | 14,160 | +3.5% | | Aircraft maintenance | 4,295 | 4,047 | +6.1% | | Aircraft depreciation and rentals | 4,589 | 4,929 | -6.9% | | Other depreciation, amortisation and rentals | 1,401 | 1,256 | +11.5% | | Other | 3,403 | 3,006 | +13.2% | | Total Operating Expenses | 48,383 | 43,697 | +10.7% | - The company's cost per available tonne kilometer (including fuel) decreased by 4.1% to HKD 3.28, and cost per available tonne kilometer (excluding fuel) decreased by 0.9% to HKD 2.30[31][32] Operating Results Analysis The company's profit before non-recurring items and tax increased by 8.8% to HKD 4.776 billion, driven by higher passenger and cargo volumes, partially offset by declining yields, while costs rose due to increased capacity, headcount, and flight hours Company Profit Before Non-Recurring Items and Tax Change Analysis | Item | HKD million | | :--- | :--- | | 2024 Company interim profit before non-recurring items and tax | 4,391 | | Increase in Revenue | | | - Passenger and cargo revenue | 4,430 | | - Other services and recoveries | 504 | | Increase in Costs | | | - Staff | (1,232) | | - In-flight services and passenger expenses | (614) | | - Landing, parking and en-route charges | (1,302) | | - Fuel (incl. hedging loss/(gain)) | (452) | | - Aircraft maintenance | (169) | | - Asset ownership (incl. aircraft and other depreciation, rentals and net finance costs) | (39) | | - Other | (741) | | 2025 Company interim profit before non-recurring items and tax | 4,776 | - Group basic profit attributable to shareholders (excluding non-recurring items) increased by 4.2% to HKD 3.651 billion[33] Fuel Expenses and Hedging The Group's net fuel cost for H1 2025 was HKD 14.654 billion, a 3.5% YoY increase, primarily due to a 19.0% increase in fuel consumption, partially offset by a 14.3% decrease in average aircraft fuel prices Cathay Group H1 2025 Fuel Cost Breakdown | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Total fuel cost | 14,436 | 14,221 | | Fuel hedging loss/(gain) | 218 | (61) | | Net Fuel Cost | 14,654 | 14,160 | - Fuel consumption increased by 19.0%, while average aircraft fuel prices decreased by 14.3%[36] Financial Position As of June 30, 2025, the Group's net borrowings decreased by 2.8% to HKD 56.342 billion, and available unrestricted liquidity increased by 12.7% to HKD 21.504 billion, while equity attributable to Cathay Group shareholders slightly decreased by 1.6% due to dividend payments and lower other comprehensive income Cathay Group H1 2025 Financial Position Overview | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Additions to property, plant and equipment | 3,759 | - | - | | Total borrowings | 65,254 | 68,475 | -4.7% | | Net borrowings | 56,342 | 57,941 | -2.8% | | Available unrestricted liquidity | 21,504 | 19,073 | +12.7% | | Equity attributable to Cathay Group shareholders | 51,654 | 52,500 | -1.6% | | Net debt to equity ratio (excluding leases without asset transfer elements) | 0.87x | 0.90x | -0.03x | | Net debt to equity ratio (incl. HKFRS 16 impact) | 1.09x | 1.10x | -0.01x | - Borrowings are primarily denominated in USD and HKD, with 40% at fixed interest rates[37] Review of Subsidiary and Associate Performance This section reviews the financial performance of the Group's key subsidiaries and associates Performance of Key Subsidiaries Air Hong Kong reported a solid profit before net finance costs and tax of HKD 474 million in H1 2025, while other subsidiaries like Cathay Pacific Catering Services, Cathay Pacific Services, Hong Kong Airport Services, and Vogue Laundry all showed improved results Key Subsidiaries H1 2025 Performance | Company | H1 2025 Profit/(Loss) before net finance costs and tax (HKD million) | H1 2024 Profit/(Loss) before net finance costs and tax (HKD million) | | :--- | :--- | :--- | | HK Express | (524) | 66 | | Air Hong Kong | 474 | 488 | | Cathay Pacific Catering Services (Hong Kong) Limited and overseas catering facilities | Improved | - | | Cathay Pacific Services Limited | Improved | - | | Hong Kong Airport Services Limited | Improved | - | | Vogue Laundry Limited | Improved | - | Performance of Associates The share of losses from associates improved YoY, primarily due to Air China's enhanced revenue management and cost control, and Air China Cargo's business expansion, with results for both calculated based on financial statements delayed by three months Associates H1 2025 Share of Losses | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Share of losses from associates | (181) | (342) | -47.1% | - Air China's financial performance improved YoY, and Air China Cargo also expanded its business[15][38] Outlook and Sustainability This section outlines Cathay Group's future prospects and its commitment to sustainable development initiatives Outlook Cathay Group is confident in Hong Kong's international aviation hub, investing over HKD 100 billion in fleet, cabins, lounge products, and digital innovation, with Cathay Pacific continuing to increase flights and destinations, Cathay Cargo remaining vigilant to market uncertainties, and HK Express facing short-term challenges but expected to be profitable long-term - The Group will invest over HKD 100 billion in fleet, cabin and lounge products, and digital innovation to solidify Hong Kong's international aviation hub status[16] - Cathay Pacific will continue to increase flights and destinations and introduce more enhanced customer experiences[16] - Cathay Cargo will remain vigilant and flexible in responding to market uncertainties, while enhancing special cargo solutions, digital capabilities, and leadership in sustainability[16] - HK Express faces short-term challenges, with Japan ticket bookings not yet returning to normal levels, but is expected to be profitable in the long term through continued development, efficiency improvements, and consolidation of its foundation[16] Leading in Sustainability Cathay Group has made progress in sustainability, including a sustainable aviation fuel agreement with Sinopec, inspiring youth through the "I Can Fly" program, sponsoring UNICEF activities, and partnering with Foodlink Foundation for food donation - Signed an agreement with China Petrochemical Corporation (Sinopec) to uplift domestically produced Sustainable Aviation Fuel (SAF) at Hong Kong International Airport[39] - Helped approximately 2,000 young people pursue their dreams through the "I Can Fly" program and sponsored UNICEF activities supporting children's emotional well-being and protection[39] - Partnered with Foodlink Foundation for over ten years, collecting 2,250 tonnes of unopened packaged food through the "Food Donation Program" for vulnerable communities, benefiting 260,000 people[39] - Became the exclusive travel partner for the new Kai Tak Sports Park, supporting Hong Kong's sports, arts, and cultural development[39] - As of June 30, 2025, the Group employed over 32,200 staff globally, with approximately 27,300 in Hong Kong[39] Consolidated Financial Statements This section presents the consolidated income statement, statement of comprehensive income, statement of financial position, and statement of cash flows for Cathay Group Consolidated Income Statement Cathay Group reported total revenue of HKD 54.309 billion, operating profit of HKD 5.926 billion, profit for the period of HKD 3.651 billion, and basic earnings per ordinary share of 56.7 HK cents for H1 2025 Cathay Group H1 2025 Consolidated Income Statement Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Total Revenue | 54,309 | 49,604 | | Operating expenses | (48,383) | (43,697) | | Operating profit before non-recurring items | 5,926 | 5,907 | | Operating profit | 5,926 | 6,016 | | Net finance costs | (1,477) | (1,455) | | Share of losses from associates | (128) | (320) | | Profit before tax | 4,321 | 4,241 | | Tax | (670) | (628) | | Profit for the period | 3,651 | 3,613 | | Profit attributable to Cathay Group ordinary shareholders | 3,651 | 3,372 | | Basic earnings per ordinary share (HK cents) | 56.7 | 52.4 | | Diluted earnings per ordinary share (HK cents) | 54.8 | 47.0 | Consolidated Statement of Comprehensive Income Cathay Group's total comprehensive income for H1 2025 was HKD 2.309 billion, a decrease from HKD 4.390 billion in the prior year, mainly due to cash flow hedging losses and reduced share of other comprehensive income from associates Cathay Group H1 2025 Consolidated Statement of Comprehensive Income Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Profit for the period | 3,651 | 3,613 | | Cash flow hedges (loss/gain recognised during the period) | (2,148) | 1,789 | | Share of other comprehensive income of associates (recognised during the period) | (24) | (68) | | Exchange differences on translation of foreign operations (gain/loss recognised during the period) | 513 | (383) | | Defined benefit plans (remeasurement loss recognised during the period) | (2) | (1) | | Other comprehensive income for the period, net of tax | (1,342) | 777 | | Total Comprehensive Income for the Period | 2,309 | 4,390 | Consolidated Statement of Financial Position As of June 30, 2025, Cathay Group's total assets less current liabilities were HKD 117.452 billion, and total shareholders' equity was HKD 51.661 billion, with an increase in net non-current assets but an expansion in net current liabilities Cathay Group June 30, 2025 Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Property, plant and equipment | 116,085 | 116,457 | | Investments in associates | 16,497 | 16,371 | | Net non-current assets | 86,091 | 83,500 | | Cash and cash equivalents | 8,912 | 10,534 | | Net current liabilities | (34,430) | (30,993) | | Total assets less current liabilities | 117,452 | 121,005 | | Total shareholders' equity | 51,661 | 52,507 | Consolidated Statement of Cash Flows Cathay Group's net cash inflow from operating activities was HKD 11.153 billion, net cash outflow from investing activities was HKD 4.267 billion, and net cash outflow from financing activities was HKD 9.130 billion in H1 2025, resulting in a net decrease of HKD 2.244 billion in cash and cash equivalents Cathay Group H1 2025 Consolidated Statement of Cash Flows Summary | Indicator | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 11,153 | 10,613 | | Net cash outflow from investing activities | (4,267) | (4,082) | | Net cash outflow from financing activities | (9,130) | (4,779) | | Net (decrease)/increase in cash and cash equivalents | (2,244) | 1,752 | | Cash and cash equivalents at June 30 | 3,321 | 9,621 | Notes to the Financial Statements This section provides detailed notes on the basis of preparation, accounting policies, segment information, and other financial disclosures Basis of Preparation and Accounting Policies This interim financial report is prepared in accordance with the HKEX Listing Rules and HKAS 34, with the Group applying the revised HKAS 21, which had no material impact on the condensed financial statements or accounting policies - This report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[44] - The Group has applied the revised Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability", which had no material impact on the condensed financial statements or accounting policies[46] Segment Information The Group is segmented by business nature into Company (international passenger and cargo), HK Express (low-cost passenger), Air Hong Kong (air cargo express), and airline-related services, with segment results presented on an EBIT basis and geographical revenue information provided by source of sale - Segment results are now presented on an EBIT (Earnings Before Interest and Tax) basis, and prior year presentations have been restated to conform to this revised presentation[49] Segment Results In H1 2025, the Company segment reported a profit of HKD 5.842 billion, HK Express recorded a loss of HKD 524 million, Air Hong Kong a profit of HKD 474 million, airline-related services a profit of HKD 134 million, and share of losses from associates was HKD 128 million Cathay Group H1 2025 Segment Results | Segment | Sales to External Customers (HKD million) | Segment Profit/(Loss) (HKD million) | | :--- | :--- | :--- | | Company | 48,986 | 5,842 | | HK Express | 3,171 | (524) | | Air Hong Kong | 1,595 | 474 | | Airline-related services | 557 | 134 | | Associates | - | (128) | | Total | 54,309 | 5,926 | Geographical Information By source of sale, North Asia (mainland China, Hong Kong, and Taiwan) contributed HKD 30.078 billion in revenue, with revenue also growing in the Americas, Southeast Asia & Oceania, Europe, and South Asia, Middle East & Africa regions Cathay Group H1 2025 Revenue by Source of Sale | Region | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | North Asia - Mainland China, Hong Kong & Taiwan | 30,078 | 29,235 | | North Asia - Japan & Korea | 2,151 | 2,019 | | Americas | 7,934 | 7,186 | | Southeast Asia & Oceania | 7,024 | 5,540 | | Europe | 4,852 | 3,892 | | South Asia, Middle East & Africa | 2,270 | 1,732 | | Total | 54,309 | 49,604 | Gain on Deemed Disposal of Partial Interests in Associates Air China's new share issuance in February 2024 diluted the Group's interest from 16.26% to 15.87%, resulting in a HKD 90 million gain, while Air China Cargo's exercise of an over-allotment option in February 2025 diluted the Group's ownership from 21.36% to 21.01%, with no material financial impact - Air China's new share issuance led to a dilution of the Group's interest, resulting in a HKD 90 million gain[52] - Air China Cargo's exercise of an over-allotment option resulted in a dilution of the Group's ownership, with no material financial impact[53] Components of Operating Profit Operating profit includes expenses such as depreciation of property, plant and equipment, amortisation of intangible assets, and short-term lease expenses, as well as income from net gain on disposal of property, plant and equipment, government grants, and dividends from unlisted equity investments H1 2025 Expenses/(Income) Included in Operating Profit | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 5,399 | 5,672 | | Amortisation of intangible assets | 332 | 286 | | Expenses relating to short-term leases and leases of low-value assets | 6 | 8 | | Net gain on disposal of property, plant and equipment | (2) | (51) | | Government grants | (87) | (147) | | Dividend income from unlisted equity investments | (141) | (66) | Taxation The Group's tax expense for H1 2025 was HKD 670 million, a 6.7% YoY increase, with Hong Kong profits tax calculated at 16.5% and overseas tax at local rates, and the Group is subject to global minimum tax reforms (Pillar Two rules), with an estimated investment of no more than HKD 150 million H1 2025 Taxation Expense | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Current tax expense | 254 | 157 | | Deferred tax expense | 416 | 471 | | Total | 670 | 628 | - The Group is subject to the Organisation for Economic Co-operation and Development's (OECD) Global Anti-Base Erosion Model Rules (Pillar Two rules), with Hong Kong enacting Pillar Two legislation effective January 1, 2025, and an estimated investment of no more than HKD 150 million[56] Earnings Per Ordinary Share Cathay Group's basic earnings per ordinary share for H1 2025 were 56.7 HK cents, and diluted earnings per ordinary share were 54.8 HK cents, with convertible bonds having a dilutive effect H1 2025 Earnings Per Ordinary Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic earnings (HK cents) | 56.7 | 52.4 | | Diluted earnings (HK cents) | 54.8 | 47.0 | - Convertible bonds have a dilutive effect on earnings per ordinary share, with a dilutive impact of HKD 32 million in H1 2025[58][59] Interest-Bearing Liabilities and Liquidity As of June 30, 2025, the Group's total borrowings were HKD 65.254 billion and net borrowings were HKD 56.342 billion, both lower than year-end 2024, with available unrestricted liquidity of HKD 21.504 billion, comprising HKD 8.912 billion in cash and HKD 12.595 billion in committed undrawn facilities Cathay Group June 30, 2025 Interest-Bearing Liabilities and Liquidity | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Total borrowings | 65,254 | 68,475 | | Cash and cash equivalents | (8,912) | (10,534) | | Net borrowings | 56,342 | 57,941 | | Available unrestricted liquidity | 21,504 | 19,073 | | Committed undrawn facilities | 12,595 | 8,542 | Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables were HKD 18.503 billion, similar to year-end 2024, with trade payables at HKD 7.597 billion and a significant increase in the current portion of derivative financial liabilities Cathay Group June 30, 2025 Trade and Other Payables | Item | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Trade payables | 7,597 | 7,480 | | Derivative financial liabilities – current portion | 1,459 | 277 | | Other payables | 8,784 | 9,935 | | Amounts due to associates | 282 | 334 | | Amounts due to other related companies | 381 | 451 | | Total | 18,503 | 18,477 | Share Capital As of June 30, 2025, the company had 6,439,409,250 issued and fully paid ordinary shares, with HKD 4.558 billion of convertible bonds repurchased and cancelled before January 2, 2025, leaving HKD 2.164 billion outstanding principal Cathay Group June 30, 2025 Share Capital Status | Item | June 30, 2025 Number of Shares | June 30, 2025 HKD million | | :--- | :--- | :--- | | Balance of issued and fully paid ordinary shares | 6,439,409,250 | 28,841 | - Before January 2, 2025, HKD 4.558 billion (67.89% of the principal amount) of the 2026 secured convertible bonds were repurchased and cancelled, with an outstanding principal amount of HKD 2.164 billion[66] Dividends The Board has declared a first interim dividend of 20 HK cents per ordinary share for 2025, totaling HKD 1.288 billion, to be paid on October 9, 2025, with the company's ordinary shares going ex-dividend from September 3, 2025 H1 2025 Interim Dividend Paid for Previous Financial Year | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Interim dividend paid for previous financial year | 3,155 | 2,768 | - The Board has declared a first interim dividend of 20 HK cents per ordinary share for 2025, totaling HKD 1.288 billion, to be paid on October 9, 2025[67] - The company's ordinary shares will go ex-dividend from September 3, 2025[67] Events After the Reporting Period Subsequent to the reporting period, the company's wholly-owned subsidiary exercised purchase rights for 14 Boeing 777-9 aircraft with an option for up to 7 more, and some convertible bonds were converted on August 5, 2025, leaving HKD 1.76 billion in outstanding principal - The company's wholly-owned subsidiary exercised purchase rights to acquire 14 Boeing 777-9 aircraft and obtained rights to acquire up to 7 additional aircraft[69] - On August 5, 2025, HKD 404 million of convertible bonds were converted, leaving a total outstanding principal amount of HKD 1.76 billion[70] Corporate Governance and Interim Report The company is committed to maintaining high standards of corporate governance, complying with all code provisions of Appendix C1 of the Listing Rules, and the 2025 Interim Report will be published on the HKEX and company websites by August 22, 2025 - The company complies with all code provisions contained in Part 2 of Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[71] - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than Appendix C3 "Model Code for Securities Transactions by Directors of Listed Issuers" of the Listing Rules[71] - The "2025 Interim Report" will be published on the HKEX website and the company's website on or before August 22, 2025[72] Disclaimer and Company Information This section includes a disclaimer regarding forward-looking statements and lists the company's directors Disclaimer This document may contain forward-looking statements based on various assumptions, estimates, and forecasts, subject to inherent risks and uncertainties beyond the company's control, where actual results may differ materially due to changes in economic conditions, competition, exchange rates, interest rates, and commodity prices, and the company assumes no obligation to update or revise such statements - This document may contain forward-looking statements based on various assumptions, estimates, and forecasts, subject to inherent risks, uncertainties, or other factors beyond the company's control[73] - Actual results may differ materially and/or adversely due to changes in economic conditions, competitive environment, exchange rates, interest rates, and commodity prices[73] - Neither the company nor its directors, officers, employees, agents, affiliates, advisors, or representatives assume any obligation to update such forward-looking statements[73] Company Directors' Information The announcement lists the company's executive directors, non-executive directors, and independent non-executive directors, with Patrick Healy as Chairman - The company's current directors include Executive Directors (Patrick Healy, Chairman; Ronald Lam, Lavinia Lau, Alex McGowan, Rebecca Sharpe), Non-Executive Directors (Ma Chongxian, Deputy Chairman, etc.), and Independent Non-Executive Directors (Bernard Chan, etc.)[74]