Swire Pacific Limited

Swire Pacific reported first-half underlying profit of HKD 7.8 billion, up 43% year over year, and recurring underlying profit of HKD 7.0 billion, up 48%. The interim dividend was raised 15% to HKD 1.50 per A share. By division, recurring underlying profit rose 37% in property, 5% in beverages, and 39% in aviation. Swire Coca-Cola reported recurring attributable profit of HKD 907 million, up 5%, with China up 24% to HKD 727 million; Vietnam/Cambodia down 13% to HKD 98 million; Thailand/Laos down 10% to HKD 95 million; and Hong Kong up 5% to HKD 58 million. Swire Coca-Cola’s EBITDA rose 11% and its margin edged up from 12.8% to 12.9%. Management said the group’s debt fell 4%, weighted average cost of debt was 3.4%, gearing was 19.3%, and 75% of borrowings were fixed rate. Looking ahead, management said property remains on the HKD 100 billion plan, the beverage unit is advancing a CNY/RMB 12 billion China investment plan, and aviation remains supported by strong Cathay and HAECO performance.

The Chairman framed the quarter as the best underlying profit half in Swire’s history and tied the result to improving consumer sentiment across all divisions. He emphasized that the group has not stopped investing, calling current capital deployment record-high, and said the pipeline in property, beverages, and aviation remains active. His tone was confident and constructive, with repeated references to strong momentum and a belief that the improvement should carry into the second half.

The Finance Director stressed that the core businesses are performing well, generating strong cash flow, lowering gearing, and supporting both record investment and a progressive dividend. He highlighted debt down 4%, a 3.4% weighted average cost of debt, 19.3% gearing, and 75% fixed-rate borrowing, while also noting refinancing is being pushed from 2028/2029 into 2031/2032. He said capital strategy remains focused on long-term strategic investment, operational excellence, dividend growth, and potentially share buybacks in that order.

Analysts asked about the Cathay exchangeable bond, whether a property-level exchangeable bond could be considered, dividend mix, and where future capital could be deployed given lower gearing. Management said the Cathay structure was opportunistic and attractive when issued, that Swire still owns 45% and can refinance it, and that there has been no discussion of a similar instrument for Swire Properties. On capital allocation, they said the company is still in a heavy investment phase across core businesses, with property recycling continuing, healthcare remaining a small portfolio item, and no interest in moving into new non-core segments.