Swire Pacific turned in a 13.5 per cent rise in first-half profit to HK$2.73 billion as higher contributions from Cathay Pacific Airways more than offset softer rental returns. The result, in line with market expectations, came after Cathay Pacific reported a HK$1.41 billion profit during the period, a strong turnaround from a HK$662 million loss a year earlier. Chairman James Hughes-Hallett said the group's various business divisions, in particular aviation, had performed well in the context of the local and global economies. The aviation division reported attributable profits of HK$779 million, a 10.7 per cent improvement on the previous year, as passenger and cargo traffic volumes recovered, he said. The property division was affected by continuing downward pressure on office rents but retail rents held up and sales of residential flats stabilised. Profits of HK$315 million on sales of The Albany flats in Mid-Levels enabled a 20.4 per cent increase in attributable profit over the previous period to HK$1.62 billion. Turnover increased 7 per cent to HK$7.4 billion. Earnings were HK$1.76 per A share and 35.2 HK cents per B share, both up 13.5 per cent year on year. The group will pay an interim dividend of 40 HK cents per A share and eight HK cents per B share, up from 36 cents and 7.2 cents a year ago. Mr Hughes-Hallett said its businesses were well positioned and most should at least maintain their first-half performance. 'Pressure on office rents is likely to continue, but further profits from sale of flats at The Albany are likely to more than offset the decline in rental income.' Gross property rental income for the half year amounted to HK$2.31 billion, compared with HK$2.34 billion previously. On the dispute over a HK$4.5 billion land premium for Cityplaza office towers in Quarry Bay, an arbitrator's decision that Swire has to surrender 1.97 million square feet of its entitlement to build in the project was accepted. But the timing of the surrender and consequently the amount of premium and associated interest was the subject of an appeals process for which the outcome had yet to be determined, Swire said.