May 2017
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2016 Annual Results
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Swire PacificSwire PropertiesCathay Pacific AirwaysHAECO

Swire Pacific Limited AR chart

The results of the Group in 2016 were affected by difficult economic conditions. Oil prices recovered somewhat, but this did not lead to a recovery in exploration and production spending by oil majors. Retail sales in Hong Kong slowed. Intense competition and overcapacity reduced demand for our airlines' passenger and cargo services. Economic growth in the USA was robust, but a stronger US dollar and depreciation of the Renminbi adversely affected the Group’s results.

Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, fell 69% to HK$3,063 million. The decrease primarily reflected weak results from the Aviation and Marine Services divisions (which included impairment charges at Swire Pacific Offshore ("SPO") and HAECO) and the absence of profits from sales of units in OPUS HONG KONG recorded in 2015.

Swire Beverages made an attributable profit of HK$813 million in 2016, a 17% decrease from 2015. The decrease in attributable profit principally reflected lower profits in Mainland China. Overall sales volume increased by 2% to 1,105 million unit cases, compared with an increase of 4% in 2015. Volume grew in the USA, reflecting the inclusion of sales in Arizona and New Mexico with effect from August 2016. Volume declined in Mainland China, Hong Kong and Taiwan.

The Beverages Division continues to expand. In Mainland China, conditional agreements were entered into in 2016 which, if they become unconditional, will result in a realignment of the Coca-Cola bottling system in Mainland China. If the realignment proceeds, it will result in Swire Beverages having controlling interests in companies operating in territories in which 49% of the Mainland China population live (compared to 31% prior to the realignment). Swire Beverages will control larger bottling operations in contiguous territories. This is expected to improve efficiency and save costs.

The Marine Services Division recorded higher losses. Low oil prices and a reduction in exploration and production spending by oil majors continued to have a material adverse effect on the market. SPO reported an attributable loss of HK$3,033 million in 2016, compared to a loss of HK$1,285 million in 2015. The results for the year included vessel impairment charges of HK$2,313 million, and a loss of HK$118 million arising from the disposal of SPO’s logistics subsidiary, Altus Oil & Gas Services, in November 2016.

Attributable profit from the Trading & Industrial Division in 2016 decreased by 26% to HK$114 million. The decrease principally reflected weaker results from Swire Retail, costs associated with developing the cold storage business and losses from Swire Environmental Services. The attributable profits of Swire Foods and Taikoo Motors increased. Results from Akzo Nobel Swire Paints were similar to last year.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
2016 Highlights

2016 Highlights
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)

Swire Properties Limited AR chart

Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, increased by HK$34 million from HK$7,078 million in 2015 to HK$7,112 million in 2016. The 2015 profit included a loss of HK$229 million on disposal of four hotels in the UK. In 2016, there was a small decrease in underlying profit from property investment and a small increase in underlying profit from property trading. Disregarding the loss on disposal in 2015, the underlying loss from hotels was little changed in 2016.

Gross rental income was HK$10,773 million in 2016 compared to HK$10,716 million in 2015. Gross rental income fell in Hong Kong and increased in Mainland China and the USA. The reduction in Hong Kong largely reflected lower retail rental income consequent on lower retail sales. Office rental income in Hong Kong increased despite the loss of rental income resulting from the Taikoo Place redevelopment. In Mainland China, gross rental income increased by 2% despite a 6% depreciation of the Renminbi against the Hong Kong dollar. Profit from property trading in 2016 included that recognised on the sales of residential units in the USA. Fewer residential properties were sold in Hong Kong. The performance of the hotels in Mainland China improved, while at the same time hotels in Hong Kong were adversely affected by a reduction in the number of visitors to Hong Kong.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
2016 Highlights

2016 Highlights
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)

Cathay Pacific Airways Limited AR chart

The Cathay Pacific Group reported an attributable loss of HK$575 million for 2016. This compares to a profit of HK$6,000 million in 2015. The operating environment for the Group's airlines was difficult in 2016, with a number of factors adversely affecting their performance. Intense and increasing competition with other airlines was the most important. Other airlines significantly increased capacity. There were more direct flights between Mainland China and international destinations. Competition from low cost carriers increased. Overcapacity in the market was a particular competitive problem for the cargo business. Three economic factors were also important, the reduced rate of economic growth in Mainland China, a reduction in the number of visitors to Hong Kong and the strength of the Hong Kong dollar. All these factors put severe competitive pressure on yields. The Group benefited from low fuel prices, but the benefit was reduced by fuel hedging losses, largely incurred on hedges put in place when the fuel price was much higher than today. The contribution from subsidiary and associated companies was satisfactory.

The Group's passenger revenue in 2016 was HK$66,926 million, a decrease of 8.4% from 2015. Capacity increased by 2.4%, reflecting the introduction of new routes and increased frequencies on other routes. The load factor decreased by 1.2 percentage points, to 84.5%. Yield, which was under intense pressure throughout the year, fell by 9.2% to HK54.1 cents.

The Group's cargo revenue in 2016 was HK$20,063 million, a decrease of 13.2% compared to the previous year. The cargo capacity of Cathay Pacific and Cathay Dragon increased by 0.6%. The load factor increased by 0.2 percentage points, to 64.4%. Tonnage carried increased by 3.1%. Yield fell by 16.3% to HK$1.59, reflecting strong competition, overcapacity and the suspension of Hong Kong fuel surcharges.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)

HAECO AR chart

The HAECO Group reported an attributable profit of HK$975 million in 2016. The profit included a gain of HK$805 million on disposal of Hong Kong Aero Engine Services Limited's ("HAESL") interest in Singapore Aero Engine Services Pte. Limited ("SAESL") and an impairment charge of HK$285 million in respect of the goodwill recorded on the acquisition of TIMCO Aviation Services, Inc. Disregarding the gain on disposal in 2016 and impairment charges in both years, the HAECO Group’s 2016 attributable profit was HK$516 million, 8.2% higher than in 2015.

Manhours sold by HAECO in Hong Kong ("HAECO Hong Kong") for airframe services decreased by 4.6% in 2016. This reflected deferral of work by some customers to 2017. Line services results benefited from increased aircraft movements and more work being done per movement. More components and avionics maintenance manhours were sold in Hong Kong. The profit of HAECO ITM Limited ("HAECO ITM") decreased. This reflected lower demand for the loan of aircraft parts and higher financing charges. The profits of HAESL increased, as more work was done per engine.

HAECO USA Holdings, Inc. ("HAECO Americas") recorded a higher loss in 2016. This principally reflected losses on some seat contracts and a reduction in the number of seats sold and in cabin integration work. The profit of Taikoo (Xiamen) Aircraft Engineering Company Limited ("HAECO Xiamen") increased in 2016. Fewer airframe services manhours were sold but the work was more profitable. Taikoo Engine Services (Xiamen) Company Limited ("TEXL") performed well, with more engines overhauled and more component repair work. The overall contribution from the Group's other activities in Mainland China improved.



Watch videos 
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing (audiocast)
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)
Swire Pacific

Swire Pacific Limited AR chart

The results of the Group in 2016 were affected by difficult economic conditions. Oil prices recovered somewhat, but this did not lead to a recovery in exploration and production spending by oil majors. Retail sales in Hong Kong slowed. Intense competition and overcapacity reduced demand for our airlines' passenger and cargo services. Economic growth in the USA was robust, but a stronger US dollar and depreciation of the Renminbi adversely affected the Group’s results.

Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, fell 69% to HK$3,063 million. The decrease primarily reflected weak results from the Aviation and Marine Services divisions (which included impairment charges at Swire Pacific Offshore ("SPO") and HAECO) and the absence of profits from sales of units in OPUS HONG KONG recorded in 2015.

Swire Beverages made an attributable profit of HK$813 million in 2016, a 17% decrease from 2015. The decrease in attributable profit principally reflected lower profits in Mainland China. Overall sales volume increased by 2% to 1,105 million unit cases, compared with an increase of 4% in 2015. Volume grew in the USA, reflecting the inclusion of sales in Arizona and New Mexico with effect from August 2016. Volume declined in Mainland China, Hong Kong and Taiwan.

The Beverages Division continues to expand. In Mainland China, conditional agreements were entered into in 2016 which, if they become unconditional, will result in a realignment of the Coca-Cola bottling system in Mainland China. If the realignment proceeds, it will result in Swire Beverages having controlling interests in companies operating in territories in which 49% of the Mainland China population live (compared to 31% prior to the realignment). Swire Beverages will control larger bottling operations in contiguous territories. This is expected to improve efficiency and save costs.

The Marine Services Division recorded higher losses. Low oil prices and a reduction in exploration and production spending by oil majors continued to have a material adverse effect on the market. SPO reported an attributable loss of HK$3,033 million in 2016, compared to a loss of HK$1,285 million in 2015. The results for the year included vessel impairment charges of HK$2,313 million, and a loss of HK$118 million arising from the disposal of SPO’s logistics subsidiary, Altus Oil & Gas Services, in November 2016.

Attributable profit from the Trading & Industrial Division in 2016 decreased by 26% to HK$114 million. The decrease principally reflected weaker results from Swire Retail, costs associated with developing the cold storage business and losses from Swire Environmental Services. The attributable profits of Swire Foods and Taikoo Motors increased. Results from Akzo Nobel Swire Paints were similar to last year.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
2016 Highlights

2016 Highlights
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)
Swire Properties

Swire Properties Limited AR chart

Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, increased by HK$34 million from HK$7,078 million in 2015 to HK$7,112 million in 2016. The 2015 profit included a loss of HK$229 million on disposal of four hotels in the UK. In 2016, there was a small decrease in underlying profit from property investment and a small increase in underlying profit from property trading. Disregarding the loss on disposal in 2015, the underlying loss from hotels was little changed in 2016.

Gross rental income was HK$10,773 million in 2016 compared to HK$10,716 million in 2015. Gross rental income fell in Hong Kong and increased in Mainland China and the USA. The reduction in Hong Kong largely reflected lower retail rental income consequent on lower retail sales. Office rental income in Hong Kong increased despite the loss of rental income resulting from the Taikoo Place redevelopment. In Mainland China, gross rental income increased by 2% despite a 6% depreciation of the Renminbi against the Hong Kong dollar. Profit from property trading in 2016 included that recognised on the sales of residential units in the USA. Fewer residential properties were sold in Hong Kong. The performance of the hotels in Mainland China improved, while at the same time hotels in Hong Kong were adversely affected by a reduction in the number of visitors to Hong Kong.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
2016 Highlights

2016 Highlights
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)
Cathay Pacific Airways

Cathay Pacific Airways Limited AR chart

The Cathay Pacific Group reported an attributable loss of HK$575 million for 2016. This compares to a profit of HK$6,000 million in 2015. The operating environment for the Group's airlines was difficult in 2016, with a number of factors adversely affecting their performance. Intense and increasing competition with other airlines was the most important. Other airlines significantly increased capacity. There were more direct flights between Mainland China and international destinations. Competition from low cost carriers increased. Overcapacity in the market was a particular competitive problem for the cargo business. Three economic factors were also important, the reduced rate of economic growth in Mainland China, a reduction in the number of visitors to Hong Kong and the strength of the Hong Kong dollar. All these factors put severe competitive pressure on yields. The Group benefited from low fuel prices, but the benefit was reduced by fuel hedging losses, largely incurred on hedges put in place when the fuel price was much higher than today. The contribution from subsidiary and associated companies was satisfactory.

The Group's passenger revenue in 2016 was HK$66,926 million, a decrease of 8.4% from 2015. Capacity increased by 2.4%, reflecting the introduction of new routes and increased frequencies on other routes. The load factor decreased by 1.2 percentage points, to 84.5%. Yield, which was under intense pressure throughout the year, fell by 9.2% to HK54.1 cents.

The Group's cargo revenue in 2016 was HK$20,063 million, a decrease of 13.2% compared to the previous year. The cargo capacity of Cathay Pacific and Cathay Dragon increased by 0.6%. The load factor increased by 0.2 percentage points, to 64.4%. Tonnage carried increased by 3.1%. Yield fell by 16.3% to HK$1.59, reflecting strong competition, overcapacity and the suspension of Hong Kong fuel surcharges.



Watch videos 
2016 Final Results Press Briefing

2016 Final Results Press Briefing
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)
HAECO

HAECO AR chart

The HAECO Group reported an attributable profit of HK$975 million in 2016. The profit included a gain of HK$805 million on disposal of Hong Kong Aero Engine Services Limited's ("HAESL") interest in Singapore Aero Engine Services Pte. Limited ("SAESL") and an impairment charge of HK$285 million in respect of the goodwill recorded on the acquisition of TIMCO Aviation Services, Inc. Disregarding the gain on disposal in 2016 and impairment charges in both years, the HAECO Group’s 2016 attributable profit was HK$516 million, 8.2% higher than in 2015.

Manhours sold by HAECO in Hong Kong ("HAECO Hong Kong") for airframe services decreased by 4.6% in 2016. This reflected deferral of work by some customers to 2017. Line services results benefited from increased aircraft movements and more work being done per movement. More components and avionics maintenance manhours were sold in Hong Kong. The profit of HAECO ITM Limited ("HAECO ITM") decreased. This reflected lower demand for the loan of aircraft parts and higher financing charges. The profits of HAESL increased, as more work was done per engine.

HAECO USA Holdings, Inc. ("HAECO Americas") recorded a higher loss in 2016. This principally reflected losses on some seat contracts and a reduction in the number of seats sold and in cabin integration work. The profit of Taikoo (Xiamen) Aircraft Engineering Company Limited ("HAECO Xiamen") increased in 2016. Fewer airframe services manhours were sold but the work was more profitable. Taikoo Engine Services (Xiamen) Company Limited ("TEXL") performed well, with more engines overhauled and more component repair work. The overall contribution from the Group's other activities in Mainland China improved.



Watch videos 
2016 Final Results Analyst Briefing

2016 Final Results Analyst Briefing (audiocast)
 

Other references 
2016 Annual Report
2016 Annual Report (PDF)
2016 Final Results Analyst Briefing presentation
2016 Final Results Analyst Briefing presentation (PDF)
The non-statutory accounts (within the meaning of section 436 of the Companies Ordinance (Cap. 622) (the "Ordinance")) in this document are not specified financial statements (within such meaning). The relevant specified financial statements have been or will be delivered to the Registrar of Companies in Hong Kong in accordance with section 664 of the Ordinance. Auditor's reports have been prepared on those specified financial statements. Those reports were not qualified or otherwise modified, did not refer to any matters to which the auditor drew attention by way of emphasis without qualifying the reports and did not contain statements under section 406(2) or 407(2) or (3) of the Ordinance.
2016 Annual Results
2016 Annual Results
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