LOSSES in money market operations combined with rising labour costs severely reduced expected profit growth in the first half of the year for Hong Kong Aircraft Engineering Co (HAECO). The firm reported a miniscule rise in profit attributable to shareholders to $215.1 million from $213.8 million the previous year. Chairman Peter Sutch said: ''The results reflect business growth and high utilisation of the company's facilities, but was adversely affected by increased labour costs arising from inflation in Hong Kong, reduced margins on airframe maintenance and losses on managed funds, reflecting adverse conditions in worldwide bond markets.'' Earnings per share rose 0.8 per cent to $1.16. Analysts across the board were disappointed with the results. For the full year they had been expecting 15 per cent growth to $515 million, in profit and a rise in earnings per share to $2.78. ''We would have expected this to be reflected in the interim result,'' said an analyst. Now analysts are downgrading their forecasts for the group for the full year to $447 million, the same as in 1993. No significant knock-on was expected for other group companies, with Cathay Pacific Airways announcing results today and Swire Pacific, announcing tomorrow. The Swire Group's aircraft maintenance company reported a 6.38 per cent increase in turnover for the first six months of the year and net operating profit dropped by 1.4 per cent amid rising costs. The company, which provides line maintenance to arriving flights as well as longer term base maintenance for many airlines' long-haul aircraft, recorded turnover of $1.17 billion as compared with $1.09 billion during the first six months of last year. The net operating profit for the first six months was $253.2 million compared with 256.9 million the previous year. The company also announced that it would pay an interim dividend of 30 cents per share, which will be paid on October 3 to shareholders registered at the close of business on September 23 this year. The company said during the period under review no purchase, sale or redemption of company shares had been effected by HAECO or any of its subsidiary companies. According to HAECO general manager of group public affairs Nick Rhodes, while the company's turnover increased, margins were being squeezed during the first six months by increased labour and inflationary costs. As a result, the company's profit margin dipped from 19.4 per cent for the first six months of 1993 to 18.4 per cent this year. ''Labour costs and wage-related inflation are pushing up costs, but we can't put up costs, so our margins are getting squeezed.'' He said the only solution for the company was to improve productivity, which was being constantly monitored. ''We are competing in a global market, but the prices we have to pay are decided in Hong Kong,'' he said. The company also said it had suffered losses on managed funds, which reflected adverse conditions in worldwide bond markets during the period. Mr Rhodes said: ''The bonds in the United States have been weakened but they have long-term maturity. It's just a paper loss. The value of the paper has decreased and affects the balance sheet.'' HAECO reported that the number of aircraft movements had increased by 7.8 per cent over the first half of the previous year, providing the company with higher maintenance revenue. The firm said its airframe maintenance facility operated almost to capacity during the period, performing checks on Cathay, Dragonair and Lowa aircraft. According to the company, use of the overhauling division remained satisfactory, with the majority of work being carried out on Rolls-Royce RB211 engines. Construction by the company's associate, Taikoo (Xiamen) Aircraft Engineering Co of a two-bay hangar in Xiamen in China, was proceeding on schedule and would open late next year. Mr Rhodes said discussions with the Provisional Airport Authority about the company's representation at Chek Lap Kok were on-going. The company would proceed with the construction of a large engine fan test cell and a module change facility which it hoped would be operational in 1996.