Swire Pacific Ltd A

Good afternoon, ladies and gentlemen. Welcome to Swire Pacific 2025 Interim Result Analyst Briefing. Joining us today at the briefing are Mr. Guy Bradley, Chairman of Swire Pacific, Mr. Martin Moray, Finance Director of Swire Pacific, and Ms. Karen So, Chief Executive Officer of Swire Coca-Cola. Before we take a detailed look at our interim results for 2025, we'd love to share with you a short video highlighting the key developments and achievements of Swire Pacific in the first half of 2025. Please enjoy the video. so so We hope you enjoyed the video. May we now invite Guy, Martin and Karen to take us through the details of the interim results of 2025.

Good evening and thank you for joining us. I'll start with the group corporate overview. And I would say at the strategic level, number one, we have very strong underlying profit from the property division, boosted, as you heard earlier, by the excellent disposal of the retail at BCC in Miami and a couple of the other Miami adjacency pieces of land, which we've also managed to dispose. So that's really helped the underlying profit on property That puts the property division 67% committed down their plan of investing 100 billion Hong Kong dollars over the next 10 years. We're only three years into that. So that's a very sort of accelerated performance, I think, in terms of commitment. And I would say that they've got seven major projects under construction at this point in the Chinese mainland. I don't think we've ever had as many projects under construction reflecting that investment and commitment. So there's a lot of work going on on the property side. The other major milestone strategically, I think, for properties in the first half was the successful sale of the first residences that we've built in the Chinese mainland, and that's in Lujiazui, Taikyuan, which is on the bank of the river in Shanghai. Great product. We've sold two batches already, and they're nearly completely sold out. They were sold out within the hour for each batch. Had a great response there, but it's the first time Swire Properties has put its brand on the residential sector in the Chinese mainland. So quite a landmark milestone there for Swire Properties. In beverages, I would call it a solid performance. There have been challenges in Southeast Asia. No doubt. And I'll come on to some of those later. But the investment that we're making in the beverage business continues. And we currently have four new production plants under construction in the Chinese mainland. And a new plant in Vietnam was inaugurated in July this year. So we continue to invest in production capacity to cater for the growth in the region. On aviation, the sector continues to perform well for us, as you heard yesterday, and we're very happy that CAFE and HECO look like having another strong year. Financially... Both underlying profit and recurring underlying profit are basically close to prior year, generating $5.5 billion and $4.7 billion of profit respectively. So good set of numbers, I think, given the climate that we're operating in. We've decided to pay a 4% increase in ordinary dividend per A share to Hong Kong dollars 130. Martin can cover that a bit more detail in a second. And then in terms of the business level of the company, property, I'd say the retail market is performing well in the Chinese mainland, which somewhat offsets the softness that we're all very familiar with in Hong Kong office. And those are our two main contributors in the property business. So one's going reasonably well, one's still soft. EBITDA growth in the Chinese mainland at beverages has been positive, and that has offset some of the challenges in Southeast Asia, which I mentioned earlier. Those challenges range from the relocation of the Ho Chi Minh City plant, the depreciation of the Vietnam Dong, and the competitive environment in Thailand, which has been partly offset by a higher contribution from the increased shareholding that we've taken in Thailand and Laos. Aviation, as I said, continues to perform well based on strong capacity growth and increased demand for maintenance on the Hayco side, with Hayco achieving a 40% growth in recurring profit in the first half. So good performance there by Hayco. Martin.

Thank you, Chairman. Good evening. As the Chairman said, we believe these are very solid results in this time of uncertainty. And we'll start with the underlying profit of 5.5 and recurring underlying profit of 4.7 being pretty similar to the prior year. Once you adjust for the change in value of the investment properties, the statutory profit is down at 815 million. Very strong cash generated from operations. A lot better results from HECO. And that includes the land sale of 211 billion U.S. dollars. in the brick and key land, which we'll talk about in later slides. And as the chairman mentioned, we have a progressive dividend policy, so continue to pay that at 1.30 per share. In terms of the underlying profit, between the underlying profit and the recurring underlying profit, the non-recurring items are very similar to last year. In 2025, it's basically all made up of the Brickell Key retail and car park sale, that 833 million non-recurring, and you see on the left-hand side, The prior year, you had the Taiku Shin car parks and the other two were non-core assets relating to Caddler, the disposal of Caddler and a fair value gain in Caddler. This then is a good description of describing our underlying profit. So you can see clearly there the strong underlying profit in Swire Properties, the good results from aviation, the solid results from beverages, despite the challenges that the chairman mentioned in Southeast Asia. And you'll see the head office, the others, there's a little bit higher interest rates, but also the non-recurring items in Caddler last year that we just mentioned. In terms of recurring profit on the right-hand side there, again, it's the same bit. It highlights there on the right-hand side the strong results on the recurring basis of the HECO group and in Cathay Pacific and properties and beverages being marginally down. Balance sheet remains strong, gearing at 23%, weighted average cost of debt 3.7%, fixed to floating 66%, net debt of 71.3 billion. And again, very high liquidity of 64 billion and a solid maturity profile. In terms of sustainability, we very much focus on carbon waste, water, people and communities. We're very proud of all of our core divisions in terms of how they lead in sustainability. As you saw on the video there, Swire property is up at 60% of renewable energy, Swire Beverages at 55%. And that makes up 88% of our scope one and two, those two divisions. And so we're well on track for our 2030 commitments. Thank you.