Swire Pacific (19) H2 2024 earnings summary

Executive summary

• Achieved recurring underlying profit of HK$9.3Bn in 2024, with strong aviation and property performance despite a challenging environment and lower one-off gains from the SCCU disposal.

• Major investments included property expansion in the Greater Bay Area, increased stake in INDIGO Beijing, and the acquisition of ThaiNamthip in Southeast Asia beverages.

• Share buy-back program continued, with HK$3,841M spent in 2024, and a 5% increase in ordinary dividend per 'A' share to HK$3.35.

• Cathay Pacific repaid government debt, committed HK$100Bn to fleet renewal, and posted strong profit, with HAECO recurring profit up 45%.

• Revenue declined 14% to HK$81,969M, mainly due to lower property and beverage contributions.

Financial highlights

• Recurring underlying profit was HK$9.3Bn, down 11% year-over-year; underlying profit at HK$10.5Bn, statutory profit fell 85% to HK$4.3Bn.

• Dividend per 'A' share at HK$3.35, up 5% from prior year, following a special dividend in 2023.

• Gearing ratio increased to 22.1% (23.7% including leases); net debt rose 28% to HK$70.6Bn.

• Available liquidity at year-end was HK$43.1Bn, with 64% of borrowings at fixed rates and weighted average cost of debt at 4%.

• Return on equity dropped to 1.6% from 11.0% year-over-year.

Outlook and guidance

• Market headwinds expected to persist in 2025, with subdued Hong Kong office market and challenging retail sales.

• Anticipate retail sales growth in Chinese Mainland and continued revenue growth in Chinese Mainland beverages.

• Aviation to benefit from Three-Runway System and network expansion; HAECO expects stable demand for maintenance and engine overhaul.

• Healthcare investments to proceed cautiously, with positive policy signals in China.

• Trading & Industrial profit expected to remain under pressure, with focus on cost management and aftersales growth.