A large one-off exceptional gain from the sale of shares in Hong Kong Dragon Airlines saved the day for Swire Pacific, helping it achieve a modest 5.6 per cent rise in interim profit to $3.055 billion. Stripped of that, Swire's overall core earnings fell, as profit from property development sales all but dried up. With the $468 million exceptional profit from the disposal of part of the group's shareholding in Dragonair, the conglomerate's attributable profit for the six months to June 30 produced earnings per A share of 192.7 cents and 38.5 cents per B share. Excluding the exceptional, earnings fell 10.5 per cent to 163.2 cents per A share and 32.6 cents per B share. The result was in line with analysts' expectations. In the first half of last year, Swire booked $1.02 billion from the sale of luxury flats in Robinson Place, Mid-Levels. This year, with this project all but sold out and no new ones coming on stream, profit from property sales slumped to $59 million. Chairman Peter Sutch assured shareholders of a better second half once residential sales from the group's Island Place development in North Point got under way. ING Barings analyst Mark Simpson said Swire should be able to book about $1 billion from Island Place by year's end. Net rental income during the first half showed satisfactory growth over 1995 as the first full contribution from Swire Properties' new Dorset House office block in Quarry Bay trickled in. The division's net income from rentals and hotels rose to a healthy $1.77 billion from $1.55 billion a year earlier. The group's aviation division was its other main money-spinner. Earlier this week, Cathay Pacific Airways, in which Swire has diluted its shareholding from 52.6 per cent to 43.9 per cent, posted a 12.5 per cent increase in first-half earnings to $1.106 billion, excluding exceptionals. There was also $541 million from the disposal of part of its own shareholding in Dragonair. Mr Sutch described Cathay's result as satisfactory in view of the relative strength of the Hong Kong dollar against the Japanese yen, which has depressed yields. He said operating profit at Cathay was expected to be higher in the second half, mainly due to seasonal factors, although yields would remain under pressure. Hong Kong Aircraft Engineering Co's (Haeco) interim operating profit was stagnant at $178.8 million. Mr Sutch said Haeco's profits were likely to remain subdued. Swire's trading division's results were disappointing, down on the first half of 1995 as a result of difficult conditions faced by its vehicle trading operations in Taiwan during the Straits crisis. In the industries division, Swire's substantial investment in Coca-Cola bottling began to show signs of paying off, with profits reported in Hong Kong, Taiwan and the United States. However, its Carlsberg Brewery in Hong Kong experienced difficult market conditions. Overall, the industries division showed only modest growth in operating profit given the sale of Swire Technologies in March.