Swire Pacific yesterday reported that its underlying profit jumped 135 per cent to HK$8.91 billion in the first half of this year, driven by the sharp increase in earnings from Cathay Pacific Airways. The strong results prompted the company to raise its interim dividend to HK$1 per A share from 60 HK cents a year ago. It set its B share interim dividend at 20 HK cents, up from 12 HK cents previously. Turnover grew 7.47 per cent to HK$12.84 billion during the period. Including an investment property revaluation gain, Swire Pacific's net profit surged 332 per cent to HK$13.95 billion from HK$3.23 billion a year earlier. The solid growth in its underlying profit was largely driven by Cathay, which contributed a profit of HK$2.08 billion compared with HK$277 million in the first half of 2009. Swire Pacific also recorded a HK$2.55 billion gain on a revaluation of its previous interest in the Hong Kong Aircraft Engineering Company (Haeco). The firm owned a 75.85 per cent interest in Haeco after it acquired an additional 15 per cent stake in the company from Cathay Pacific during the period. In the property division, underlying profit grew 33 per cent to HK$2.46 billion. The recovery in the Hong Kong office market and a robust retail market boosted its gross rental income by 9 per cent to HK$3.9 billion. Rental income from its office portfolio in Hong Kong increased 7 per cent to HK$2.12 billion as the company enjoyed positive rental reversions and low vacancy rates. The office vacancy rate was only 2 per cent at the end of June. Income from retail properties grew 8 per cent to HK$1.47 billion. Its shopping malls in Hong Kong were virtually fully let. Retail sales grew 18 per cent, reflecting the continued strong recovery in consumer demand. Martin Cubbon, executive director at Swire Pacific, yesterday said the outlook for the office market was very good and office rental reversions would remain positive in the second half of the year. In May, Swire Pacific scrapped its HK$20.84 billion initial public offering for its property arm, Swire Properties, due to the soft and unstable stock market. Chairman Christopher Pratt said the company did not have any immediate plan for a Swire Properties IPO. 'We may do it when the stock market is stable and trending to good,' he added. Swire Pacific's mainland property business has improved. Rental income from Sanlitun Village in Beijing surged 37 per cent in the first half to HK$164 million. The occupancy rates of The Opposite House in Sanlitun Village ranged from 65 to 70 per cent in the first half, compared with 30 to 35 per cent in 2009. 'We will have more downtown development on the mainland,' Pratt said. He estimated about 30 per cent of the company's investment property portfolio in terms of floor area would be on the mainland after the four major projects were completed. In terms of asset value, about 20 per cent of the portfolio will be on the mainland. Shares in Swire Pacific dropped 0.05 per cent to close at HK$98 yesterday.