Sunday, October 21, 2018
 
Columnist
Martin Hennecke

Swire profit hits $13.5b amid marine downturn
 
10/08/2018
 
Swire Pacific (0019 and 0087) posted a 11 percent increase in net profit to HK$13.5 billion for the first half, but huge losses were made from its marine services division. Revenue for the period was up 5 percent from HK$40.2 billion to HK$42.3 billion for the six-month ended June 30, 2018. Interim dividends of HK$1.20 per A share and 24 HK cents per B share will be paid, up 20 percent compared with the previous year. However, the conglomerate's underlying profit for the first half plunged 67 percent to HK$1.265 billion, in which Swire Pacific Offshore recorded a loss of HK$4.563 billion. This included impairment charges in respect of carrying value of vessels aggregating HK$3.9 billion. Despite a substantial recovery in oil prices, there has been no increase in average charter hire rates, group financial director Michelle Low Mei-suen said. Low said the loss is expected to continue for some time as there are too many vessels, including some being brought out of cold stack, competing for work. Swire Pacific Offshore owns and operates over 75 offshore support vessels and daily charter hire rates fell by 7 percent to HK$17,300 per day during the period. The group's aviation division recorded HK$217 million profit compared with a loss of HK$678 million from the previous year. The loss from listed subsidiary Cathay Pacific (0293) was narrowed to HK$263 million from HK$2.05 billion, due to higher passenger yields. In the property division, underlying profit of Swire Properties (1972) increased 34 percent to HK$6.22 billion, due mainly to the sale of an office building in Kowloon Bay and other investment properties in Hong Kong. It will pay an interim dividend of 27 HK cents per share. The company agreed to sell 100 percent of its interest of Cityplaza Three and Cityplaza Four in Quarry Bay for HK$15 billion in June, and completion of the sale is expected before April next year.

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