Swire Pacific, one of Asia’s largest conglomerates, saw underlying profit surge 55 per cent last year as strong property income offset losses from its Cathay Pacific Airways unit and from marine services. Excluding revaluation gains on investment properties, underlying profit was HK$4.74 billion (US$604.5 million) in the year ended December, the company said in a filing to the Hong Kong stock exchange on Thursday. It was lower than the HK$5.27 billion average estimate of five analysts polled by Bloomberg. The group, whose business empire spans aviation, real estate and offshore marine services, said turnover rose 29 per cent to HK$80.28 billion. A final dividend of HK$1.1 per share will be paid. “The results of the group in 2017 were affected by difficult market conditions facing our aviation and marine services divisions. Overcapacity in the passenger market led to intense competition with other airlines and continued pressure on yields on many of our airlines’ key routes,” said John Slosar, chairman of Swire Pacific and Swire Properties. Swire Pacific said the attributable loss from Cathay Pacific was HK$567 million, while the marine services division accounted for a loss of HK$2.23 billion. On Wednesday Cathay Pacific, in which the group owns a 45 per cent stake, reported a net loss of HK$1.25 billion in 2017, more than double that of the previous year. Swire’s property division contributed a profit of HK$6.4 billion last year, up 11 per cent from 2016. “The difficult market conditions faced by some of our businesses have led them to take measures to reduce costs and to improve efficiency where possible and to focus on profitable core operations. This should serve us well in the longer term,” said Slosar. Cathay Pacific racks up first back-to-back loss in 71-year history, at US$160 million The lower-than-expected earnings came a few weeks after Swire Group named a sixth generation descendant, Merlin Bingham Swire, to take over as chairman of Swire Pacific and Swire Properties on July 1. Slosar will retire, although he will remain chairman of Cathay Pacific. Swire looks to founder’s scion to steer the trading, property units Swire Pacific owns an 82 per cent stake in Swire Properties, which builds offices and manages shopping centres in Hong Kong and mainland China and which saw its underlying profit, excluding revaluation gains on investment properties, increase 10.12 per cent to HK$7.83 billion. Turnover rose 11 per cent to HK$18.55 billion. That was slightly higher than the HK$7.76 billion average estimate of 14 analysts polled by Bloomberg. Swire Properties will pay a final dividend of 52 HK cents per share, up from 48 HK cents in 2016. Including a HK$26.84 billion revaluation gain on investment properties, net profit increased 126 per cent to HK$33.95 billion. In 2016, the revaluation gain on investment properties was HK$9.6 billion.