Swire Pacific recorded an underlying profit of HK$5,300 million in 2021, compared with an underlying loss of HK$3,969 million in 2020. Disregarding significant non-recurring items in both years, the Group recorded a recurring underlying profit of HK$4,885 million in 2021, compared with a loss of HK$609 million in 2020. Losses at Cathay Pacific and Swire Pacific Offshore were reduced significantly. The recurring underlying profit of the Property Division was stable and Swire Coca-Cola reported a record profit. Impairment charges at Swire Pacific Offshore and Cathay Pacific reduced substantially. However, gains from the disposal of non-core assets were also lower.
Commenting on the Group's performance and prospects, Guy Bradley, Chairman of Swire Pacific said, "In 2021 we continued our strategy of focusing on three core Divisions where we see good opportunities: Property, Beverages and Aviation, all well-positioned to tap into the growth in consumer spending in their core markets. We see a bright future for all of them, although the current COVID-19 impact on the Aviation Division is particularly challenging. We also increased our investment in healthcare in the Chinese Mainland.
"In the Property Division, we have an ambitious HK$100 billion investment pipeline over the next 10 years, from which we have just announced a RMB 7 billion investment in Xi'an. This development, located at the Small Wild Goose Pagoda historical and cultural zone in the Beilin district, will be our seventh retail-led mixed-use development in the Chinese Mainland.
"Swire Coca-Cola, which is performing strongly, continued to pursue its core strategies during the year and made significant investments in production assets, logistics infrastructure, digital innovation and merchandising equipment to support future revenue growth and operational efficiency.
"In Aviation, Cathay Pacific's improved results were driven by the exceptional performance of the cargo business, with the airline reporting a profit in the second half of the year. Its liquidity was healthy. While Cathay Pacific's business remains significantly impacted by COVID-19, the business is well-placed for a post-COVID-19 recovery, after decisive actions were taken to create a more focused and competitive business with a lower cost base.
"During the year, we invested in a premium private hospital in Shenzhen and a healthcare provider specialising in cardiovascular care in Shanghai, all part of our planned long-term capital spending in the healthcare sector in the Chinese Mainland."
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Swire Properties' recurring underlying profit for the year was HK$7,152 million, compared with HK$7,089 million in 2020, reflecting its strong retail performance in the Chinese Mainland, and reduced losses from its hotel business. Underlying profit attributable to shareholders reduced to HK$9,541 million in 2021 from HK$12,679 million in 2020, due primarily to the reduction in profit from the sale of non-core assets in Hong Kong.
In Hong Kong, Swire Properties' office portfolio delivered solid returns in 2021, maintaining high occupancy rates, despite new supply and increasing competition.
Hong Kong's retail market recovered partially in 2021, but not to pre-COVID-19 levels. It benefited from the HKSAR Government's consumption voucher scheme, whilst COVID-19 was generally contained in the second half of 2021. However, the amortisation of rental concessions granted in 2020 adversely affected rental income.
Rental income at Swire Properties' malls in the Chinese Mainland increased significantly in 2021 with high footfall and strong growth in retail sales, particularly of luxury goods. The Company recorded an impressive 29% year-on-year increase in attributable gross rental income generated by its Chinese Mainland malls in 2021.
In Hong Kong, Swire Properties has been building up a strong pipeline of residential projects. In Hong Kong, 28 out of 37 units were pre-sold in the EIGHT STAR STREET development. All 20 apartments at EDEN in Singapore have been sold, as have all the remaining units at Reach and Rise in Miami. Results from the Company's hotel business also improved in 2021, due to better performances in the Chinese Mainland and the USA. In the USA, retail sales and rental income grew strongly, driven by strong domestic demand.
"2021 was a year during which we have strengthened our commercial and residential portfolios, reinforced our core assets and paved the way for new growth opportunities," said Guy Bradley, Chairman of Swire Properties. "As Swire Properties celebrates its 50th anniversary this year, we look forward to the next exciting chapter."
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2021 Annual Results Analyst Briefing
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The unprecedented disruption caused by COVID-19 to the global aviation industry and the subsequent travel and operational restrictions around the world have continued to affect Cathay Pacific's business severely. Notwithstanding these challenges, the situation did improve as 2021 progressed.
The Cathay Pacific Group's attributable loss was HK$5,527 million in 2021 (2020: loss of HK$21,648 million). The loss per ordinary share in 2021 was HK95.1 cents (2020: loss per ordinary share of HK424.3 cents). Its attributable profit was HK$2,038 million in the second half of 2021 (2021 first half: loss of HK$7,565 million; 2020 second half: loss of HK$11,783 million). Cathay Pacific reported an attributable profit of HK$3,303 million in the second half of 2021 (2021 first half: loss of HK$5,031 million; 2020 second half: loss of HK$10,032 million).
Comparing 2021 with 2020 as a whole, the operating performance in 2021 was generally weaker due in large part to the first two months of 2020 being relatively strong ahead of the full impact of COVID-19. Passenger revenue decreased by 61.6% to HK$4,346 million in 2021 compared with 2020. Revenue passenger kilometres (RPK) decreased by 79.5%. Capacity, measured in available seat kilometres (ASK), was down by 61.8%. We carried 717 thousand passengers, an average of 1,965 per day, 84.5% fewer than in 2020. Passenger load factor was 31.1% compared with 58.0% in 2020.
Cathay Pacific's cargo business performed exceptionally well. Cargo revenue in 2021 was HK$32,377 million, an increase of 31.8% compared to 2020. Cargo revenue tonne kilometres (RFTK) decreased by 1.1%. Capacity, measured by available cargo tonne kilometres (AFTK), decreased by 10.9%. Load factor increased by 8.1 percentage points to 81.4%. Yield increased by 33.1% to HK$3.94.
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2021 Annual Results Analyst Briefing
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2021 Annual Report (PDF)
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