2020 Interim Results

Swire Pacific LimitedSwire Properties LimitedCathay Pacific Airways Limited
Swire Pacific Limited IR chart
The business environment in the first half of 2020 was extremely challenging. COVID-19 had a material adverse effect on a number of our businesses. The Group recorded an underlying loss of HK$5,485 million in the first half of 2020, compared with an underlying profit of HK$15,846 million in the first half of 2019. The loss was primarily due to the Group’s share of the loss made by Cathay Pacific (which included a significant impairment charge) and to a significant impairment charge at Swire Pacific Offshore. Disregarding significant non-recurring items in both years, the Group recorded a recurring underlying loss of HK$123 million in the first half of 2020, compared with a profit of HK$4,226 million in the same period in 2019.

The HAECO Group reported an attributable profit of HK$534 million in the first half of 2020, compared with HK$535 million in the same period of 2019. Disregarding impairment charges of HK$21 million in respect of rotable aircraft parts in the first half of 2020, the recurring profit of HAECO increased. Financial assistance from governments in Hong Kong and the USA and a higher profit at HAESL more than offset the adverse effect of COVID-19 on demand for maintenance and repair services at most HAECO Group companies.

Swire Coca-Cola's profit of HK$946 million in the first half of 2020 was 26% higher than in the first half of 2019. Disregarding a withholding tax payment in the first half of 2019, the increase would have been 14%. Business was adversely affected by COVID-19, but recovered strongly, particularly in the Chinese mainland.

The recurring loss of the Marine Services Division was HK$631 million in the first half of 2020, compared to HK$583 million in the first half of 2019. The figures exclude impairment charges of HK$4,345 million in the first half of 2020 and gains or losses on disposal of vessels and equipment in both first half periods at Swire Pacific Offshore. Demand for oil has fallen significantly as a result of COVID-19. In view of the deteriorating industry conditions, a review of the carrying value of the fleet and other assets was undertaken and the above significant impairment charge was made.

Disregarding non-recurring items, the Trading & Industrial Division made an attributable loss of HK$32 million in the first half of 2020, compared to a profit of HK$60 million in the first half of 2019. Swire Resources in particular was badly affected by COVID-19.


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2020 Interim Results Press Briefing

2020 Interim Results Press Briefing
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2020 Interim Report
2020 Annual Report (PDF)
2020 Interim Results Analyst Briefing presentation (PDF)
2020 Interim Results Analyst Briefing presentation (PDF)
 
Swire Properties Limited IR Chart
Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, decreased by HK$14,853 million from HK$18,606 million in the first half of 2019 to HK$3,753 million in the first half of 2020. Recurring underlying profit (which excludes the profit on sale of interests in investment properties) was HK$3,702 million in the first half of 2020, compared with HK$4,049 million in the first half of 2019.

The decrease in underlying profit principally reflects the absence in the first half of 2020 of the significant profits on the sale of investment properties in Hong Kong which were made in the first half of 2019.

Recurring underlying profit from property investment increased slightly in the first half of 2020. This principally reflected lower operating costs and finance charges. Gross rental income decreased by 4% (to HK$6,101 million in the first half of 2020, compared with HK$6,346 million in the first half of 2019). This mainly reflected lower retail rental income from Hong Kong and the Chinese mainland. This in turn reflected lower retail sales and rental concessions as a result of COVID-19. The gross profit margin percentage improved slightly, reflecting a reduction in operating costs in the Chinese mainland.

The small underlying loss from property trading in the first half of 2020 resulted from sales and marketing expenses in Singapore and losses relating to residential units in the USA.

Hotels recorded a loss in the first half of 2020 compared with a profit in the first half of 2019 due to the drastic effect on occupancy and revenue of COVID-19.


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2020 Interim Results Press Briefing

2020 Interim Results Press Briefing
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2020 Highlight

2020 Interim Highlights
 

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2020 Interim Report
2020 Interim Report (PDF)
2020 Interim Results Analyst Briefing presentation
2020 Interim Results Analyst Briefing presentation (PDF)
 
Cathay Pacific Limted IR chart
Despite a promising start in January, with encouraging signs that passenger demand was beginning to return following the social unrest which impacted the second half of 2019, the first six months of 2020 were the most challenging that the Cathay Pacific Group has faced in its more than 70-year history. The impact of COVID-19 on the Group’s business and the global economy is unprecedented. The global health crisis has decimated the travel industry and the future remains highly uncertain, with most analysts suggesting that it will take years to recover to pre-crisis levels.

The Cathay Pacific Group's attributable loss was HK$9,865 million in the first half of 2020 (2019 first half: profit of HK$1,347 million). Cathay Pacific and Cathay Dragon reported a loss after tax of HK$7,361 million in the first half of 2020 (2019 first half: profit of HK$675 million), and the share of losses from subsidiaries and associates was HK$2,504 million (2019 first half: profit of HK$672 million).

The loss for the first half of 2020 is net of the receipt of HK$1,060 million of COVID-19 related government grants globally and includes impairment and related charges of HK$2,465 million relating to 16 aircraft that are unlikely to re-enter meaningful economic service again before they retire or are returned to lessors, and to certain airline service subsidiaries' assets.

Passenger revenue decreased by 72.2% to HK$10,396 million in the first half of 2020. Revenue passenger kilometres ("RPK") traffic decreased by 72.6%. This loss of revenue reflects the precipitous drop in passenger demand resulting from the extensive travel restrictions, border controls and quarantine arrangements which were implemented around the world in response to the COVID-19 pandemic. In total, the Group carried 4.4 million passengers in the first six months of the year, 76.0% fewer than in 2019. The load factor also dropped significantly, to 67.3% from 84.2% in the first half of 2019. In April and May the Group was carrying an average of only around 500 passengers a day.

Cargo yield increased by 44.1% to HK$2.71 in the first six months of the year. There was an imbalance between capacity and demand in the cargo market, which led to higher cargo revenues compared to the first half of 2019. Cargo revenue in the first half of 2020 was HK$11,177 million, an increase of 8.8% compared to the same period in 2019. Available cargo tonne kilometres ("ACTK") capacity decreased by 31.0%, reflecting the considerable loss of available capacity as a result of the extensive cuts to the Group's passenger schedule. Typically, approximately half of the Group's cargo is carried in the bellies of its passenger aircraft. As a result, overall tonnage carried decreased by 31.9% to 667 thousand tonnes. The load factor increased 5.9 percentage points to 69.3%. 


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2020 Interim Results Analyst Briefing

2020 Interim Results Analyst Briefing
 

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2020 Interim Report
2020 Interim Report (PDF)
2020 Interim Results Analyst Briefing presentation
2020 Interim Results Analyst Briefing presentation (PDF)
 
Swire Pacific Limited
Swire Pacific Limited IR chart
The business environment in the first half of 2020 was extremely challenging. COVID-19 had a material adverse effect on a number of our businesses. The Group recorded an underlying loss of HK$5,485 million in the first half of 2020, compared with an underlying profit of HK$15,846 million in the first half of 2019. The loss was primarily due to the Group’s share of the loss made by Cathay Pacific (which included a significant impairment charge) and to a significant impairment charge at Swire Pacific Offshore. Disregarding significant non-recurring items in both years, the Group recorded a recurring underlying loss of HK$123 million in the first half of 2020, compared with a profit of HK$4,226 million in the same period in 2019.

The HAECO Group reported an attributable profit of HK$534 million in the first half of 2020, compared with HK$535 million in the same period of 2019. Disregarding impairment charges of HK$21 million in respect of rotable aircraft parts in the first half of 2020, the recurring profit of HAECO increased. Financial assistance from governments in Hong Kong and the USA and a higher profit at HAESL more than offset the adverse effect of COVID-19 on demand for maintenance and repair services at most HAECO Group companies.

Swire Coca-Cola's profit of HK$946 million in the first half of 2020 was 26% higher than in the first half of 2019. Disregarding a withholding tax payment in the first half of 2019, the increase would have been 14%. Business was adversely affected by COVID-19, but recovered strongly, particularly in the Chinese mainland.

The recurring loss of the Marine Services Division was HK$631 million in the first half of 2020, compared to HK$583 million in the first half of 2019. The figures exclude impairment charges of HK$4,345 million in the first half of 2020 and gains or losses on disposal of vessels and equipment in both first half periods at Swire Pacific Offshore. Demand for oil has fallen significantly as a result of COVID-19. In view of the deteriorating industry conditions, a review of the carrying value of the fleet and other assets was undertaken and the above significant impairment charge was made.

Disregarding non-recurring items, the Trading & Industrial Division made an attributable loss of HK$32 million in the first half of 2020, compared to a profit of HK$60 million in the first half of 2019. Swire Resources in particular was badly affected by COVID-19.


Watch videos 
2020 Interim Results Press Briefing

2020 Interim Results Press Briefing
2020 Interim Results Analyst Briefing

2020 Interim Results Analyst Briefing
 

Other reference 
2020 Interim Report
2020 Annual Report (PDF)
2020 Interim Results Analyst Briefing presentation (PDF)
2020 Interim Results Analyst Briefing presentation (PDF)
 
Swire Properties Limited
Swire Properties Limited IR Chart
Underlying profit attributable to shareholders, which principally adjusts for changes in the valuation of investment properties, decreased by HK$14,853 million from HK$18,606 million in the first half of 2019 to HK$3,753 million in the first half of 2020. Recurring underlying profit (which excludes the profit on sale of interests in investment properties) was HK$3,702 million in the first half of 2020, compared with HK$4,049 million in the first half of 2019.

The decrease in underlying profit principally reflects the absence in the first half of 2020 of the significant profits on the sale of investment properties in Hong Kong which were made in the first half of 2019.

Recurring underlying profit from property investment increased slightly in the first half of 2020. This principally reflected lower operating costs and finance charges. Gross rental income decreased by 4% (to HK$6,101 million in the first half of 2020, compared with HK$6,346 million in the first half of 2019). This mainly reflected lower retail rental income from Hong Kong and the Chinese mainland. This in turn reflected lower retail sales and rental concessions as a result of COVID-19. The gross profit margin percentage improved slightly, reflecting a reduction in operating costs in the Chinese mainland.

The small underlying loss from property trading in the first half of 2020 resulted from sales and marketing expenses in Singapore and losses relating to residential units in the USA.

Hotels recorded a loss in the first half of 2020 compared with a profit in the first half of 2019 due to the drastic effect on occupancy and revenue of COVID-19.


Watch videos 
2020 Interim Results Press Briefing

2020 Interim Results Press Briefing
2020 Interim Results Analyst Briefing

2020 Interim Results Analyst Briefing
2020 Highlight

2020 Interim Highlights
 

Other reference 
2020 Interim Report
2020 Interim Report (PDF)
2020 Interim Results Analyst Briefing presentation
2020 Interim Results Analyst Briefing presentation (PDF)
 
Cathay Pacific Airways Limited
Cathay Pacific Limted IR chart
Despite a promising start in January, with encouraging signs that passenger demand was beginning to return following the social unrest which impacted the second half of 2019, the first six months of 2020 were the most challenging that the Cathay Pacific Group has faced in its more than 70-year history. The impact of COVID-19 on the Group’s business and the global economy is unprecedented. The global health crisis has decimated the travel industry and the future remains highly uncertain, with most analysts suggesting that it will take years to recover to pre-crisis levels.

The Cathay Pacific Group's attributable loss was HK$9,865 million in the first half of 2020 (2019 first half: profit of HK$1,347 million). Cathay Pacific and Cathay Dragon reported a loss after tax of HK$7,361 million in the first half of 2020 (2019 first half: profit of HK$675 million), and the share of losses from subsidiaries and associates was HK$2,504 million (2019 first half: profit of HK$672 million).

The loss for the first half of 2020 is net of the receipt of HK$1,060 million of COVID-19 related government grants globally and includes impairment and related charges of HK$2,465 million relating to 16 aircraft that are unlikely to re-enter meaningful economic service again before they retire or are returned to lessors, and to certain airline service subsidiaries' assets.

Passenger revenue decreased by 72.2% to HK$10,396 million in the first half of 2020. Revenue passenger kilometres ("RPK") traffic decreased by 72.6%. This loss of revenue reflects the precipitous drop in passenger demand resulting from the extensive travel restrictions, border controls and quarantine arrangements which were implemented around the world in response to the COVID-19 pandemic. In total, the Group carried 4.4 million passengers in the first six months of the year, 76.0% fewer than in 2019. The load factor also dropped significantly, to 67.3% from 84.2% in the first half of 2019. In April and May the Group was carrying an average of only around 500 passengers a day.

Cargo yield increased by 44.1% to HK$2.71 in the first six months of the year. There was an imbalance between capacity and demand in the cargo market, which led to higher cargo revenues compared to the first half of 2019. Cargo revenue in the first half of 2020 was HK$11,177 million, an increase of 8.8% compared to the same period in 2019. Available cargo tonne kilometres ("ACTK") capacity decreased by 31.0%, reflecting the considerable loss of available capacity as a result of the extensive cuts to the Group's passenger schedule. Typically, approximately half of the Group's cargo is carried in the bellies of its passenger aircraft. As a result, overall tonnage carried decreased by 31.9% to 667 thousand tonnes. The load factor increased 5.9 percentage points to 69.3%. 


Watch videos 
2020 Interim Results Analyst Briefing

2020 Interim Results Analyst Briefing
 

Other reference 
2020 Interim Report
2020 Interim Report (PDF)
2020 Interim Results Analyst Briefing presentation
2020 Interim Results Analyst Briefing presentation (PDF)
 
This document may contain certain forward-looking statements that reflect the Company’s beliefs, plans or expectations about the future or future events. These forward-looking 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 the Chinese mainland), macroeconomic 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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