Swire to go on a shopping spree
Swire Pacific, which sold its Festival Walk development in Kowloon Tong for a record-breaking HK$18.8 billion two weeks ago, says it is building a HK$25.4 billion war chest to expand its property business and acquire new vessels by 2015.
The conglomerate, which has businesses ranging from property to aviation and shipping, yesterday reported underlying interim profit plunged 48.34 per cent to HK$4.6 billion due to a sharp fall in the contribution from its 43.97 per cent-owned Cathay Pacific Airways.
An interim dividend of HK$1.15 per share was declared, up 15 per cent from HK$1 a year earlier.
Swire said HK$10.75 billion of its capital expenditure programme would be devoted to property development by 2014. In the second half, it will spend HK$4.25 billion in Hong Kong and on the mainland.
A further HK$2.72 billon has been earmarked for property investments next year, HK$1.71 billion in 2013 and HK$2.06 billion in 2014 and beyond.
The group has 7.18 million square feet of developments pending in Shanghai and Chengdu, and 213,000 square feet in Hong Kong.
Its marine services division will also invest a targeted HK$14.65 billion by 2015 to expand its business, of which HK$2.5 billion will be spent in the second half of this year, HK$6.18 billion next year, HK$3.84 billion in 2013, HK$1.67 billion in 2014 and HK$454 million in 2015.
Chairman Christopher Pratt told analysts in a live audio webcast after yesterday's results announcement that the group had no immediate plan to spin off its property arm after the sale of Festival Walk.
'We don't think this market is the right moment, but in the long term it is still on the cards,' Pratt said.
In May last year, the group shelved its spin-off plan for Swire Properties - intended to raise HK$20.84 billion in an initial public offering - because of a downturn in the market.
Pratt said the decrease in adjusted underlying profit reflected lower profits from Cathay Pacific and from the marine services and trading and industry divisions.
In the first half of this year, attributable profit from its aviation division - largely from Cathay Pacific - fell 73 per cent to HK$1.52 billion from HK$5.65 billion a year earlier.
While earnings from the marine services division fell 8.24 per cent to HK$412 million, underlying profits from the trading and industrial division were down 24 per cent at HK$149 million after excluding the HK$148 million generated by the sale of the group's interest in Puma.
Underlying profit contributed by the property division was HK$2.38 billion, down 5.55 per cent from HK$2.52 billion a year earlier. Gross office rental income rose 4 per cent to HK$2.21 billion, while retail rental grew 8 per cent to HK$1.57 billion.