Hong Kong Aircraft Engineering (Haeco) has reported a 22 per cent fall in profit last year to HK$312 million, citing a difficult second half. Haeco chairman David Turnbull said: 'Unfortunately, with the slowdown in the commercial airline industry seen in the last quarter of the year, the improvement in revenue and profit seen in the first half of the year could not be sustained in the second half'. He warned that Haeco expected its business volume to drop this year as a result. 'In addition, rates will continue to be under pressure, due to both the worldwide capacity for heavy maintenance and the competitive environment for technical and non-technical line maintenance services at Chek Lap Kok,' Mr Turnbull said. 'Whilst [Haeco] expects to remain profitable, this will be a challenging year.' Income from operations, including Haeco's share from results of jointly-controlled companies, increased 11 per cent to HK$335 million, Mr Turnbull said. Pre-tax profit for the year to December 31 was HK$349 million. This included HK$14 million in one-off gains relating to the disposal of a house previously used by staff and the sale of Haeco's wheel and brake repair and overhaul business to jointly controlled Goodrich Aerospace Asia-Pacific. The previous year's results included HK$108 million relating to the disposal of a 5 per cent shareholding in Hong Kong Aero Engine Services and the company's entire stake in Bridgestone Aircraft Tyre (Asia). The earlier results also included the sale of nine residential units for a HK$61.7 million profit. Turnover was HK$1.95 billion last year, up from HK$1.82 billion previously. Mr Turnbull said revenue reflected increased activity at the airport during the first nine months of the year. Direct expenses rose in line with the increase in revenue and overheads were little changed year on year, except that contributions to the local staff retirement benefit scheme increased by HK$30 million, Mr Turnbull said. Haeco, part of the Swire group, provides aircraft line and base maintenance and aircraft overhaul at Chek Lap Kok airport. It plans to pay shareholders a final dividend of 42 HK cents per share for a full-year's payout of 64 HK cents per share, an increase of 7 per cent over the previous year. The company said contributions from jointly controlled companies increased from 54 per cent to 66 per cent last year, underlining their increasing importance.