Swire Pacific’s consolidated profit attributable to shareholders was HK$4,195 million in 2022, compared with HK$3,357 million in 2021. The underlying profit attributable to shareholders (which principally adjusts for changes in the value of investment properties) was HK$4,748 million in 2022, compared with HK$5,293 million in 2021. Disregarding significant non-recurring items in both years, the Group recorded a recurring underlying profit of HK$3,800 million in 2022, compared with HK$4,878 million in 2021. The reduction in recurring underlying profit was principally due to increased losses at Cathay Pacific and decreased profits at HAECO and Swire Coca-Cola.
Commenting on the Group’s developments in 2022, Guy Bradley, Chairman of Swire Pacific said, “We have made good progress towards achieving our strategic objectives. They include implementing the Swire Properties HK$100 billion investment plan announced in March 2022. To date, HK$39 billion has been committed to significant new property projects.
“By acquiring the Coca-Cola franchise businesses in Cambodia and Vietnam, Swire Coca-Cola has extended its bottling operations to Southeast Asia. This should enable the business to benefit from strong consumption growth in the area.
“Following the restructuring of Coca-Cola’s non-sparkling beverage manufacturing operations on the Chinese Mainland, Swire Coca-Cola directly owns and operates six non-sparkling beverage production facilities on the Chinese Mainland. This will improve cost and distribution efficiencies.”
Cathay Pacific is pleased to be at the rebuilding stage, reconnecting Hong Kong with the Greater Bay Area, the Chinese Mainland and the world. It is likely to make the largest contribution to improving the Group’s overall 2023 results. Capacity is still constrained, but it expects to operate about 70% of its pre-COVID-19 passenger flight capacity by the end of 2023. Cargo yields are under some pressure, but are better than those achieved before the start of COVID-19.
On the Group’s prospects in 2023, Guy said, “Despite the uncertainty caused by inflation and geopolitical tension, we are optimistic about the prospects for our businesses in 2023. COVID-19 related measures have ceased in Hong Kong and the Chinese Mainland. The border between Hong Kong and the Chinese Mainland is fully open. All this should have a significant positive impact on our businesses, in particular on our aviation businesses. Growing our core businesses remains our prime focus.”
Swire Pacific Annual Results Analyst Briefing: Swire Pacific’s Chairman, Guy Bradley (right) and Finance Director, Martin Murray.
Watch video
2022 Annual Results Analyst Briefing
Watch the Swire Pacific Annual Results 2022 highlight video.
Other reference
2022 Annual Report (PDF)
2022 Annual Results Analyst Briefing presentation
Swire Properties’ reported profit attributable to shareholders in 2022 was HK$7,980 million, compared with HK$7,112 million in 2021. Underlying profit attributable to shareholders decreased by HK$826 million from HK$9,532 million in 2021 to HK$8,706 million in 2022, primarily due to the reduction in profit from the sale of car parking spaces at the Taikoo Shing residential development in Hong Kong. The company’s recurring underlying profit for the year was HK$7,176 million, compared with HK$7,143 million in 2021.
The company’s recurring underlying profit from property investment decreased in 2022, due primarily to lower office rental income from Hong Kong and lower retail rental income from the Chinese Mainland.
In Hong Kong, the office market was weak due to new supply and economic uncertainty. However, Swire Properties’ office portfolio remained resilient with solid occupancy rates.
The retail market in Hong Kong experienced severe disruption in the early part of the year, due to the fifth COVID-19 wave, related social distancing measures and mandatory closures. Despite this challenging start, Swire Properties saw a gradual recovery in footfall and tenants’ sales from the second quarter of 2022 onwards, following the gradual relaxation of restrictions and the introduction of the HKSAR Government’s consumption voucher scheme. Rental concessions were given to tenants for specific periods on a case-by-case basis. The company’s malls remained almost fully let throughout the year.
Retail sales on the Chinese Mainland started strongly in 2022, with a full year contribution from the new Taikoo Li Sanlitun West and Taikoo Li Qiantan developments. From the second quarter, Swire Properties’ six shopping malls were affected to varying degrees by the pandemic and ensuing city-wide closures, particularly in Shanghai and Beijing. The company’s office portfolio on the Chinese Mainland proved resilient, despite COVID-19 related controls in respective cities.
Underlying profit from property trading in 2022 reflected the completion of sales of 27 units at EIGHT STAR STREET in Hong Kong and the share of profits from sales at The River project in Ho Chi Minh City, Vietnam. The company’s hotel business in Hong Kong and the Chinese Mainland was adversely affected by COVID-19 and its associated travel restrictions.
Swire Properties Annual Results Analyst Briefing: Swire Properties’ Chief Executive, Tim Blackburn and Finance Director, Fanny Lung.
Watch video
2022 Annual Results Analyst Briefing
Watch the Swire Properties Annual Results 2022 highlight video.
Other reference
2022 Annual Report (PDF)
2022 Annual Results Analyst Briefing presentation
Cathay Pacific has experienced three challenging years due to the COVID-19 pandemic, with 2022 very much being a year of two halves. The emergence of the Omicron variant at the beginning of the year led to increasingly stringent travel and operational restrictions during the first few months of 2022, particularly in Hong Kong and the Chinese Mainland.
As the COVID-19 situation in Hong Kong improved and these restrictions were progressively adjusted from 1st May onwards, Cathay Pacific was able to slowly add back some of its flight capacity. The most significant adjustments came in September, when the quarantine requirements for both passengers entering Hong Kong and for Hong Kong-based aircrew were lifted.
The Cathay Pacific Group, including airlines, subsidiaries and associates, reported an attributable loss of HK$6,548 million in 2022 (2021: loss of HK$5,527 million). The loss per ordinary share in 2022 was HK111.3 cents (2021: loss per ordinary share of HK95.1 cents).
The second-half 2022 results for the Group’s airlines and subsidiaries saw a marked improvement over its first-half 2022 results, reporting an attributable profit of HK$2,261 million in the second half of 2022, but an attributable loss of HK$255 million for the full year of 2022. However, the results from associates, the majority of which are recognised three months in arrears, reflected a significant loss of HK$6,293 million (2021: loss of HK$1,710 million). As a result, the Group’s attributable loss in the second half of 2022 was HK$1,549 million (2022 first half: loss of HK$4,999 million; 2021 second half: profit of HK$2,038 million).
However, following the Hong Kong SAR Government’s initial adjustments to travel restrictions and quarantine requirements from 1st May, the Group returned to being operating cash generative towards the end of the first half of 2022. Further adjustments to restrictions came into effect in Hong Kong in the second half of the year, and the Group was operating cash generative in the second half of 2022 and consequently overall for the full year.
Cathay Pacific Annual Results Analyst Briefing: Cathay Pacific’s CEO, Ronald Lam (left) and General Manager Finance & Performance, Christopher Buckley.
Watch video
2021 Annual Results Analyst Briefing
Other reference
2022 Annual Report (PDF)
2022 Annual Results Analyst Briefing presentation
