SWIRE PACIFIC A(US:SWRAY)2023-08-11 03:30Financial Data and Key Metrics Changes - The recurring underlying profit increased by 284% to HKD 4.9 billion compared to HKD 1.3 billion in the prior year [5][7] - Statutory profit rose to HKD 4.2 billion from HKD 1.9 billion last year [7] - Underlying profit adjusted for investment property valuation changes was HKD 5.6 billion versus HKD 1.75 billion [7] - The company proposed a special dividend of approximately HKD 11.7 billion, with a 4% increase in interim dividends [4][6] Business Line Data and Key Metrics Changes - Swire Properties reported a 6% increase in recurring underlying profit, driven by higher rental income and hotel recovery, despite a decline in carpark sales [9][17] - The beverage segment saw a 41% increase in recurring profit, with strong results from the U.S. and Chinese Mainland, and a significant contribution from Vietnam [25][26] - Aviation profits improved significantly, with Cathay Pacific reporting its first profit since 2019, although HAECO faced losses in its Cabin Solutions business [29][32] Market Data and Key Metrics Changes - The Chinese Mainland contributed 40% to total revenue growth, with rental income growing at a compound rate of 12% since 2014 [18] - Revenue in the Chinese Mainland increased by 6% on a local currency basis, while Hong Kong and Taiwan markets experienced double-digit revenue growth [26] - The U.S. operation's EBITDA increased by 45%, driven by revenue growth despite a slight decline in volume [24] Company Strategy and Development Direction - The company remains committed to executing strategic plans in core markets of Hong Kong, Chinese Mainland, and Southeast Asia [4] - A HKD 100 billion investment plan is underway, with 39% already committed [19] - The proposed sale of Swire Coca-Cola U.S.A. for HKD 30.4 billion aligns with the strategy to enhance shareholder value and strengthen the balance sheet [4][40] Management's Comments on Operating Environment and Future Outlook - Management expects the rebound seen in the first half to continue into the second half, primarily driven by aviation [35] - The company remains confident in its long-term investment strategy despite macroeconomic uncertainties [35] - The healthcare segment showed a revenue growth of 122% year-on-year, indicating positive recovery post-COVID [33] Other Important Information - The transaction for the sale of Swire Coca-Cola U.S.A. is expected to complete in the second half of 2023, pending shareholder approval [6][35] - The management services agreement will allow Swire Pacific to maintain a relationship with Coca-Cola while managing the U.S. Beverages business [38][41] Q&A Session Summary Question: Regarding the company's dividend policy and potential share buyback - The company aims for progressive mid-single-digit growth in dividends and will consider share buybacks depending on project developments and market conditions [49][52]