2019 Annual Results

Swire Pacific LimitedSwire Properties LimitedCathay Pacific Airways Limited
Swire Pacific Limited AR chart
After an encouraging first half, in which Swire Pacific delivered a continued recovery in earnings and a solid set of results, 2019 proved ultimately to be a challenging year. Social unrest in Hong Kong and global trade tensions (particularly in the second half) had direct and indirect effects on demand in a number of our businesses.

The consolidated profit attributable to shareholders for 2019 was HK$9,007 million, a 62% decrease compared to 2018. Underlying profit attributable to shareholders, which principally adjusts for changes in the value of investment properties, increased by 109% to HK$17,797 million. Disregarding significant non-recurring items in both years, the 2019 recurring underlying profit was HK$7,221 million, compared with HK$7,489 million in 2018. The decrease was mainly due to a deterioration in the results of Cathay Pacific. Dividends for the full year were maintained at the same level as those for 2018.

The HAECO group reported an attributable profit of HK$825 million in 2019, compared with HK$993 million in 2018 on a 100% basis. Disregarding non-recurring items in both years, the recurring profit of the HAECO group in 2019 was HK$1,059 million, compared with HK$951 million in 2018. The higher profit primarily reflected reduced losses at HAECO Americas and growth in the volume of work at HAESL.

The recurring profit of Swire Coca-Cola was HK$1,584 million in 2019, compared with HK$1,354 million in 2018. Revenue (including that of a joint venture company and excluding sales to other bottlers) increased by 5% to HK$44,719 million. Volume increased by 2% to 1,786 million unit cases. Revenue and volume grew in Mainland China, Taiwan and the USA, reflecting successful revenue growth management. In Hong Kong, revenue and volume declined.

The recurring loss of the Marine Services Division was HK$1,347 million in 2019, compared to HK$1,122 million in 2018. These figures exclude impairment charges, a restructuring provision and a loss on disposal of vessels aggregating HK$2,287 million at Swire Pacific Offshore in 2019 and impairment charges and write-offs of HK$3,911 million at Swire Pacific Offshore in 2018. Offshore industry conditions remained difficult. Vessel utilisation rates were higher. However, the oversupply of offshore support vessels continued to put pressure on charter hire rates.

The recurring profit of the Trading & Industrial Division (which excludes net non-recurring losses of HK$493 million) was HK$41 million in 2019, compared with HK$164 million in 2018. The result principally reflected worse results from Swire Resources in the second half of the year and the disposal of the paints business (which was profit making), partly offset by the absence of losses from the cold storage business (which was loss making before its disposal).

(Left to right) Swire Properties Chief Executive, Guy Bradley, Swire Pacific Chairman, Merlin Swire and Swire Pacific Finance Director, Michelle Low at the Swire Pacific 2019 Final Results announcement.
(Left to right) Swire Properties Chief Executive, Guy Bradley, Swire Pacific Chairman, Merlin Swire and Swire Pacific Finance Director, Michelle Low at the Swire Pacific 2019 Final Results announcement.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
2019 Highlights

2019 Highlights
 

Other reference 
2019 Annual Report
2019 Annual Report (PDF)
 
Swire Properties Limited AR Chart
Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, increased by 138% to HK$24,130 million in 2019. The increase principally reflected the profit arising from the sale of interests in two office buildings in Taikoo Shing and in other investment properties in Hong Kong.

Recurring underlying profit (which excludes the profit on sale of interests in investment properties) was HK$7,633 million in 2019, compared with HK$7,521 million in 2018. The increase principally reflected higher underlying profit from property investment in Mainland China. Recurring underlying profit from property investment increased by 3% in 2019. There was satisfactory growth from the Mainland China and USA portfolios, and from the Hong Kong office portfolio.

Gross rental income was HK$12,271 million in 2019, compared to HK$12,117 million in 2018. In Hong Kong, office rental income increased due to positive rental reversions, firm occupancy and a full year of rental income from One Taikoo Place, which opened in the last quarter of 2018. However, this was more than offset by a reduction in retail rental income in Hong Kong. This was due to rental subsidies and lower retail sales in the second half of 2019. Disregarding rental subsidies, gross retail rental income in Hong Kong decreased slightly. In Mainland China, gross rental income increased by 8%, mainly due to positive rental reversions, higher retail sales and firm occupancy. There was satisfactory growth in rental income in the USA, due to improved occupancy and higher retail sales.

The underlying loss from property trading in 2019 related to the residential units in the USA, partly offset by profit from the sale of carparks at the ALASSIO development in Hong Kong and from the share of profit from the sale of offices and carparks at Sino-Ocean Taikoo Li Chengdu in Mainland China.

Hotels recorded a loss in 2019, mainly due to a deterioration in the results of the Hong Kong hotels (reflecting social unrest) in the second half of the year. The performance of the hotels in Mainland China and the USA improved.

Swire Properties Finance Director, Fanny Lung and Swire Properties Chief Executive, Guy Bradley speaking at Swire Properties 2019 Final Results Analyst Briefing.
Swire Properties Finance Director, Fanny Lung and Swire Properties Chief Executive, Guy Bradley speaking at Swire Properties 2019 Final Results Analyst Briefing.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
2019 Highlight

2019 Highlights
 

Other reference 
2019 Annual Report
2019 Annual Report (PDF)
 
Cathay Pacific Limted AR chart
The Cathay Pacific Group reported an attributable profit of HK$1,691 million for 2019. This compares with a HK$2,345 million profit for 2018. The earnings per share was HK43.0 cents in 2019 compared to an earnings per share of HK59.6 cents in 2018. The Cathay Pacific Group reported an attributable profit of HK$344 million in the second half of 2019, compared to an attributable profit of HK$1,347 million in the first half of 2019 and an attributable profit of HK$2,608 million in the second half of 2018. Cathay Pacific and Cathay Dragon reported an attributable loss of HK$434 million in the second half of 2019, compared to an attributable profit of HK$675 million in the first half of 2019 and an attributable profit of HK$1,253 million in the second half of 2018.

Overall, passenger and cargo yields were under intense pressure in 2019 and both were below those seen in 2018. Events in Hong Kong in the second half of the year significantly reduced load factors, forward bookings and the number of passengers the Group carried. Inbound traffic was hit hard, particularly on short-haul and Mainland China routes, while outbound traffic also decreased. Demand for premium travel was weak and the Group became increasingly reliant on lower-yielding transit traffic. The Group carried 0.7% fewer passengers in 2019 than in 2018.

Cargo demand was depressed all year as a result of US-China trade tensions and was noticeably below that of 2018. However, it did pick up later in 2019 during the traditional high season, reflecting new consumer product, specialist airfreight shipments and restocking ahead of holiday periods. Exports from Mainland China and Hong Kong to trans-Pacific and European markets were more encouraging later in the year. Nevertheless, the cargo business performed significantly below expectations in 2019.

The Group benefited from lower fuel prices for most of the year, but was adversely affected by a strong US dollar. There was a 2.7% decrease in non-fuel costs per available tonne kilometre ("ATK"), reflecting its focus on productivity and efficiency as part of the Group's successful transformation programme.

Cathay Pacific’s senior management team (left to right): Chief Financial Officer, Martin Murray, Chief Executive Officer, Augustus Tang, Chairman, Pat Healy, Chief Customer and Commercial Officer, Ronald Lam and Chief Operations and Service Delivery Officer, Greg Hughes.
Cathay Pacific's senior management team (left to right): Chief Financial Officer, Martin Murray, Chief Executive Officer, Augustus Tang, Chairman, Pat Healy, Chief Customer and Commercial Officer, Ronald Lam and Chief Operations and Service Delivery Officer, Greg Hughes.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
 

Other reference 
2019 Annual Report
2019 Annual Report (PDF)
 
Swire Pacific Limited
Swire Pacific Limited AR chart
After an encouraging first half, in which Swire Pacific delivered a continued recovery in earnings and a solid set of results, 2019 proved ultimately to be a challenging year. Social unrest in Hong Kong and global trade tensions (particularly in the second half) had direct and indirect effects on demand in a number of our businesses.

The consolidated profit attributable to shareholders for 2019 was HK$9,007 million, a 62% decrease compared to 2018. Underlying profit attributable to shareholders, which principally adjusts for changes in the value of investment properties, increased by 109% to HK$17,797 million. Disregarding significant non-recurring items in both years, the 2019 recurring underlying profit was HK$7,221 million, compared with HK$7,489 million in 2018. The decrease was mainly due to a deterioration in the results of Cathay Pacific. Dividends for the full year were maintained at the same level as those for 2018.

The HAECO group reported an attributable profit of HK$825 million in 2019, compared with HK$993 million in 2018 on a 100% basis. Disregarding non-recurring items in both years, the recurring profit of the HAECO group in 2019 was HK$1,059 million, compared with HK$951 million in 2018. The higher profit primarily reflected reduced losses at HAECO Americas and growth in the volume of work at HAESL.

The recurring profit of Swire Coca-Cola was HK$1,584 million in 2019, compared with HK$1,354 million in 2018. Revenue (including that of a joint venture company and excluding sales to other bottlers) increased by 5% to HK$44,719 million. Volume increased by 2% to 1,786 million unit cases. Revenue and volume grew in Mainland China, Taiwan and the USA, reflecting successful revenue growth management. In Hong Kong, revenue and volume declined.

The recurring loss of the Marine Services Division was HK$1,347 million in 2019, compared to HK$1,122 million in 2018. These figures exclude impairment charges, a restructuring provision and a loss on disposal of vessels aggregating HK$2,287 million at Swire Pacific Offshore in 2019 and impairment charges and write-offs of HK$3,911 million at Swire Pacific Offshore in 2018. Offshore industry conditions remained difficult. Vessel utilisation rates were higher. However, the oversupply of offshore support vessels continued to put pressure on charter hire rates.

The recurring profit of the Trading & Industrial Division (which excludes net non-recurring losses of HK$493 million) was HK$41 million in 2019, compared with HK$164 million in 2018. The result principally reflected worse results from Swire Resources in the second half of the year and the disposal of the paints business (which was profit making), partly offset by the absence of losses from the cold storage business (which was loss making before its disposal).

(Left to right) Swire Properties Chief Executive, Guy Bradley, Swire Pacific Chairman, Merlin Swire and Swire Pacific Finance Director, Michelle Low at the Swire Pacific 2019 Final Results announcement.
(Left to right) Swire Properties Chief Executive, Guy Bradley, Swire Pacific Chairman, Merlin Swire and Swire Pacific Finance Director, Michelle Low at the Swire Pacific 2019 Final Results announcement.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
2019 Highlights

2019 Highlights
 

Other reference 
2019 Annual Report
2019 Annual Report (PDF)
 
Swire Properties Limited
Swire Properties Limited AR Chart
Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, increased by 138% to HK$24,130 million in 2019. The increase principally reflected the profit arising from the sale of interests in two office buildings in Taikoo Shing and in other investment properties in Hong Kong.

Recurring underlying profit (which excludes the profit on sale of interests in investment properties) was HK$7,633 million in 2019, compared with HK$7,521 million in 2018. The increase principally reflected higher underlying profit from property investment in Mainland China. Recurring underlying profit from property investment increased by 3% in 2019. There was satisfactory growth from the Mainland China and USA portfolios, and from the Hong Kong office portfolio.

Gross rental income was HK$12,271 million in 2019, compared to HK$12,117 million in 2018. In Hong Kong, office rental income increased due to positive rental reversions, firm occupancy and a full year of rental income from One Taikoo Place, which opened in the last quarter of 2018. However, this was more than offset by a reduction in retail rental income in Hong Kong. This was due to rental subsidies and lower retail sales in the second half of 2019. Disregarding rental subsidies, gross retail rental income in Hong Kong decreased slightly. In Mainland China, gross rental income increased by 8%, mainly due to positive rental reversions, higher retail sales and firm occupancy. There was satisfactory growth in rental income in the USA, due to improved occupancy and higher retail sales.

The underlying loss from property trading in 2019 related to the residential units in the USA, partly offset by profit from the sale of carparks at the ALASSIO development in Hong Kong and from the share of profit from the sale of offices and carparks at Sino-Ocean Taikoo Li Chengdu in Mainland China.

Hotels recorded a loss in 2019, mainly due to a deterioration in the results of the Hong Kong hotels (reflecting social unrest) in the second half of the year. The performance of the hotels in Mainland China and the USA improved.

Swire Properties Finance Director, Fanny Lung and Swire Properties Chief Executive, Guy Bradley speaking at Swire Properties 2019 Final Results Analyst Briefing.
Swire Properties Finance Director, Fanny Lung and Swire Properties Chief Executive, Guy Bradley speaking at Swire Properties 2019 Final Results Analyst Briefing.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
2019 Highlight

2019 Highlights
 

Other reference 
2019 Annual Report
2019 Annual Report (PDF)
 
Cathay Pacific Airways Limited
Cathay Pacific Limted AR chart
The Cathay Pacific Group reported an attributable profit of HK$1,691 million for 2019. This compares with a HK$2,345 million profit for 2018. The earnings per share was HK43.0 cents in 2019 compared to an earnings per share of HK59.6 cents in 2018. The Cathay Pacific Group reported an attributable profit of HK$344 million in the second half of 2019, compared to an attributable profit of HK$1,347 million in the first half of 2019 and an attributable profit of HK$2,608 million in the second half of 2018. Cathay Pacific and Cathay Dragon reported an attributable loss of HK$434 million in the second half of 2019, compared to an attributable profit of HK$675 million in the first half of 2019 and an attributable profit of HK$1,253 million in the second half of 2018.

Overall, passenger and cargo yields were under intense pressure in 2019 and both were below those seen in 2018. Events in Hong Kong in the second half of the year significantly reduced load factors, forward bookings and the number of passengers the Group carried. Inbound traffic was hit hard, particularly on short-haul and Mainland China routes, while outbound traffic also decreased. Demand for premium travel was weak and the Group became increasingly reliant on lower-yielding transit traffic. The Group carried 0.7% fewer passengers in 2019 than in 2018.

Cargo demand was depressed all year as a result of US-China trade tensions and was noticeably below that of 2018. However, it did pick up later in 2019 during the traditional high season, reflecting new consumer product, specialist airfreight shipments and restocking ahead of holiday periods. Exports from Mainland China and Hong Kong to trans-Pacific and European markets were more encouraging later in the year. Nevertheless, the cargo business performed significantly below expectations in 2019.

The Group benefited from lower fuel prices for most of the year, but was adversely affected by a strong US dollar. There was a 2.7% decrease in non-fuel costs per available tonne kilometre ("ATK"), reflecting its focus on productivity and efficiency as part of the Group's successful transformation programme.

Cathay Pacific’s senior management team (left to right): Chief Financial Officer, Martin Murray, Chief Executive Officer, Augustus Tang, Chairman, Pat Healy, Chief Customer and Commercial Officer, Ronald Lam and Chief Operations and Service Delivery Officer, Greg Hughes.
Cathay Pacific's senior management team (left to right): Chief Financial Officer, Martin Murray, Chief Executive Officer, Augustus Tang, Chairman, Pat Healy, Chief Customer and Commercial Officer, Ronald Lam and Chief Operations and Service Delivery Officer, Greg Hughes.

Watch videos 
2019 Final Results Analyst Briefing

2019 Final Results Analyst Briefing
 

Other reference 
2019 Annual Report
2019 Annual Report (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 specified financial statements for the year ended 31st December 2018 have been delivered to the Registrar of Companies in Hong Kong in accordance with section 664 of the Ordinance. The specified financial statements for the year ended 31st December 2019 have not been but 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 the specified financial statements for the years ended 31st December 2018 and 2019. 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.

This document may contain certain forward-looking statements that reflect the Company's beliefs, plans or expectations about the future or future events. These forwardlooking statements are based on a number of assumptions, current estimates and projections, and are therefore subject to inherent risks, uncertainties and other factors beyond the Company's control. The actual results or outcomes of events may differ materially and/or adversely due to a number of factors, including changes in the economies and industries in which the Group operates (in particular in Hong Kong and Mainland China), macro-economic and geopolitical uncertainties, changes in the competitive environment, foreign exchange rates, interest rates and commodity prices, and the Group's ability to identify and manage risks to which it is subject. Nothing contained in these forward-looking statements is, or shall be, relied upon as any assurance or representation as to the future or as a representation or warranty otherwise. Neither the Company nor its directors, officers, employees, agents, affiliates, advisers or representatives assume any responsibility to update these forward-looking statements or to adapt them to future events or developments or to provide supplemental information in relation thereto or to correct any inaccuracies.
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Message from Group Chairman

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Promoting Hong Kong at Davos 2020

Board change

Board change

2019 Annual Results

2019 Annual Results

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