Swire Pacific sees full-year earnings drop to HK$8.7b
Decline was due to a net reduction in non-recurring profits
Swire Pacific, whose interests range from property to aviation, said profit before a revaluation on investment properties fell 0.29 per cent to HK$8.72 billion last year.
The conglomerate said the decline was mainly due to a net reduction in non-recurring profits, particular the disposal of its Hong Kong port interest in 2005. The result was below the HK$9.02 billion average forecast of 15 brokers surveyed by Thomson Financial.
Turnover rose 0.9 per cent to HK$19.11 billion, from HK$18.94 billion a year ago. Taking into account a HK$14.06 billion revaluation surplus on investment properties, net profit rose 20.3 per cent to HK$22.57 billion.
Swire Pacific declared a final dividend of HK$2.20 per A share and 44 HK cents per B share.
Gross rental income rose 21.06 per cent to HK$2.4 billion on strong demand for office properties including Pacific Place in Admiralty, and in Quarry Bay.
Swire's profit contribution from Cathay Pacific rose 18 per cent to HK$1.68 billion. The airline, 40 per cent owned by Swire, on Wednesday said full-year net profit jumped 24 per cent to HK$4.09 billion.
'Core property and aviation earnings grew strongly in the year,' Swire chairman Christopher Pratt said.
Continued strong demand for office and retail property in Hong Kong saw occupancy levels and rental improve across the investment portfolio, he said.
The company rejected suggestion that pre-leasing of its 1.5 million square feet One East Island in Quarry Bay, slated to be completed next year, would put pressure on office rents.
Sun Hung Kai Properties is also pre-leasing office spaces at the 118-storey International Commerce Centre, Hong Kong's tallest building, above Kowloon MTR Station.
Keith Kerr, chairman of Swire's property unit, said Swire Properties was not concerned as leasing of 50 per cent of its spaces at One East Island was under discussion. 'We remain very positive on the outlook of the office market,' he said.
Swire said it would invest HK$14.2 billion in Hong Kong and in the mainland, largely on property development projects in Guangzhou, Shanghai and Beijing.
On completion of current developments, the group will have an investment property portfolio of more than 22 million square feet in Hong Kong and the mainland.
'We have appetite to do more,' Mr Kerr said. One or two projects might be sought in second-tier cities, he said.
Swire has failed to place winning bids at public auction for sites it wished to buy in Chengdu and Hangzhou.
Swire Pacific A shares rose 3.56 per cent to close at HK$90.20. Its B rose 2.8 per cent to HK$16.90.