Swire looks to founder’s scion to steer the trading, property units

The Swire Group has named a sixth-generation descendant of its founder to chair its Asian holding unit and property subsidiary, returning a family member to the company’s apex for the first time in more than four decades.

Merlin Bingham Swire, the group’s 44-year-old chief executive, will take over as chairman of Swire Pacific and Swire Properties starting July 1, according to a press release. John Robert Slosar, Swire Pacific’s chairman since 2014, will retire from the group, although he will remain as chairman of Cathay Pacific Airways.

The reshuffle marks the first time a family member has returned to chair one of Asia’s largest conglomerates, with a HK$106 billion (US$13.6 billion) business owning stakes in almost every aspect of Hong Kong life, from the bottling of beverages and sugar refining to developing commercial and residential property, to operating the city’s dominant airlines.

It comes as the profitability of Swire Pacific, the holding company, has been struggling to recover from the lowest levels in a decade. Both Swire Pacific and Swire Properties are scheduled to announce their full year and second-half financial results on March 15.

Swire Pacific’s 2016 net income fell 28 per cent to HK$9.64 billion under general accounting rules, the lowest since 2008, while revenue rose 2 per cent to HK$62.39 billion. Things are better at the group’s real estate unit Swire Properties, which builds upscale offices and manages shopping centres including Pacific Place in Hong Kong, with 2016 net income under general accounting principles unchanged at HK$7.11 billion, the lowest since 2011. In adjusted terms, net income and revenue at the property unit had both been increasing since 2011.

Swire Pacific issued a profit warning in November, citing a difficult operating environment in the airline industry, the second time in a decade it has given investors such a warning.

The biggest challenge for Swire is the three-year-turnaround plan for Cathay Pacific, 45 per cent owned by the Swire Group. The carrier, scheduled to report its 2017 results on March 14, is expected to announce a second annual loss, its first back-to-back loss since it first took flight in 1946.