Swire Pacific, which controls Hong Kong’s flag carrier Cathay Pacific, reported a marginal decline in first-half profit due to losses in its property business and weak consumer sentiment, while adding that the group’s outlook in its core markets remained uncertain for the rest of the year.
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The group’s underlying profit fell 2 per cent to HK$5.5 billion (US$700.6 million) in the six months to June, compared with HK$5.6 billion a year earlier, according to a filing to the Hong Kong stock exchange on Thursday.
However, first-half consolidated profit dropped 79 per cent year on year to HK$815 million due to a higher fair value loss on investment properties of HK$4.66 billion compared with HK$877 million a year earlier.
“As we look ahead to the rest of the year, there’s likely to be continued uncertainty across our core markets,” chairman Guy Bradley said in the statement. “[But] we remain committed as ever, and will continue investing in Hong Kong and the Greater Bay Area, where we see exciting opportunities for the future.”
Swire Properties, the group’s property division and one of the largest commercial landlords and retail operators in Hong Kong, posted a first-half profit jump of 17 per cent to HK$3.66 billion. “The growth was driven by a successful capital recycling strategy which has benefited from the divestment of Brickell City Centre retail and parking spaces in Miami,” it said.
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However, Swire Properties, whose assets include Pacific Place in Admiralty and Taikoo Place in Quarry Bay, reported a 2 per cent decrease in attributable recurring underlying profit for the year’s first six months to HK$2.83 billion, due to “lower office rental income from Hong Kong in a challenging market with high vacancy rates and new supply”.