Swire Pacific issues another profit warning as property, airline, marine units suffer from coronavirus impact

Name: Hong Kong government to bail out Cathay Pacific with HK$30 billion in loans and direct stake
Uploaded: 2020-06-15T15:33:20.000Z
Duration: 1 min 29 s
Description: Hong Kong government to bail out Cathay Pacific with HK$30 billion in loans and direct stake

Property, airline and marine services units are expected to incur substantial losses in the first half, group warns

Its 45 per cent-owned Cathay Pacific is seeking HK$39 billion from shareholders and the Hong Kong government to survive the aviation industry slump

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Eric Ng

Published: 11:33pm, 15 Jun 2020Updated: 5:03am, 16 Jun 2020

Swire Pacific has issued another profit warning to investors, saying its property, airline and marine services would post substantial losses in the first half as the coronavirus pandemic hurts its outlook this year.

The group, one of Hong Kong's biggest conglomerates known for its conservative approach, said Swire Properties, Cathay Pacific Airways and Swire Pacific Offshore were expected to report sharp reversals in earnings from a year earlier due to the fallout from the pandemic and a plunge in crude oil plunge.

The British-controlled group said three months ago it expected to incur a recurring loss in the first half as the viral outbreak and crude oil’s descent below zero caught the global economy by surprise.

“It is expected that there will be a loss on revaluation of investment properties, net of deferred tax, of around HK$2.6 billion (US$335 million) in the first six months of 2020,” it said in an exchange filing. Its 82 per cent-owned Swire Properties had a HK$3.6 billion revaluation gain in the same period last year.

The loss mainly reflects the effect of poor market conditions and the valuation of investment properties in Hong Kong and retail investment properties in the United States, it added. One of its prime holdings in Hong Kong is the Pacific Place, an office and shopping complex in Admiralty.

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Hong Kong government to bail out Cathay Pacific with HK$30 billion in loans and direct stake

The group also said the property arm is likely to generate lower income from the sale of investment properties this time, while its hotel business will swing into a loss.