Swire Pacific Limited
(Incorporated in Hong Kong with limited liability)

For immediate release

8th August 2024

• Underlying profit of HK$5,576 million attributable to shareholders
• Solid financial results in a tough operating environment
• Robust demand across Aviation Division drives underlying profit
• Property Division performs well despite increasing headwinds
• Beverages Division benefits from newly acquired franchise businesses in Thailand and Laos
• Increase of 4% in first-half dividends

8th August 2024, Hong Kong – Swire Pacific Limited ("the Group") today released its 2024 Interim Results. The Group achieved solid financial results, especially in the context of what is a challenging operating environment and considering the impact on comparisons of the disposal of Swire Coca-Cola, USA ("SCCU") in the second half of 2023. The Aviation Division continued to be the driving force behind the Group's underlying profit in the first half of 2024, with the Cathay group benefitting from robust demand for travel and cargo services, as well as the continuous recovery of line maintenance and growth in engine overhaul at the HAECO group. The Beverages Division was stable, while the Property Division performed well despite increasing headwinds.

In the first six months of 2024, Swire Pacific's consolidated profit attributable to shareholders was HK$3,914 million, compared with HK$4,221 million in the same period in 2023. The underlying profit attributable to shareholders for the period under review, adjusted for changes in the value of investment properties, was HK$5,576 million compared with HK$5,594 million in the first six months of 2023. Disregarding changes in the value of investment properties and significant non-recurring items in both periods, Swire Pacific recorded a recurring underlying profit of HK$4,762 million in the first half of 2024, compared with HK$4,879 million in the same period of 2023.

The Group continued to improve its shareholder returns with its share buy-back programme of up to HK$6 billion, which will run through to the conclusion of the Company's annual general meeting to be held in May 2025. During the first six months of 2024, the Company repurchased 26,380,000 ‘A' shares and 29,112,500 ‘B' shares for an aggregate cash consideration of HK$2,014 million at an average price of HK$65.1 per ‘A' share and HK$10.2 per ‘B' share.

First interim dividends are HK$1.25 per ‘A' share and HK$0.25 per ‘B' share, an increase of 4% over the first interim dividends for 2023.

Below is a summary of the 2024 interim results:

Commenting on the Group's strategic developments in the first half of the year, Guy Bradley, Chairman of Swire Pacific, said, "We continued our strategic, long-term plan of investment in our core markets of Hong Kong, the Chinese Mainland and South East Asia. We also maintained our focus on enhancing returns for shareholders through ordinary dividends and our share buy-back programme, which will run until May 2025."

Swire Properties' ten-year HK$100 billion investment plan is ongoing. As of 2nd August 2024, 65% had been committed to development projects in core markets. In Hong Kong, Swire Properties obtained the occupation permit for Six Pacific Place, the newest addition to Pacific Place, in February 2024. Swire Properties has reached a major milestone in the redevelopment of Taikoo Place with the unveiling of Taikoo Square, as well as the completion of covered walkways.

In the Chinese Mainland, construction is progressing at Taikoo Li Xi'an and Taikoo Li Sanya, as well as at the New Bund Mixed-use Project and Lujiazui Taikoo Yuan in Shanghai. This latter development will feature Swire Properties' residential debut in the Chinese Mainland. Swire Properties also has a number of projects in the pipeline, including the Julong Wan Project and the retail addition to Taikoo Hui in Guangzhou, and INDIGO Phase Two in Beijing.

In February 2024, Swire Coca-Cola entered into an agreement and conditionally agreed to acquire a majority stake in ThaiNamthip Corporation Ltd. ("TNTC"), which owns and operates the Coca-Cola franchise in the majority of Thailand and through its subsidiary in Laos, in two phases, for an aggregate consideration of approximately THB42,615.7 million (approximately HK$9,470.1 million). In May 2024, Swire Coca-Cola broke ground on the Greater Bay Area Intelligent Green Factory in Guangdong. This state-of-the-art facility represents a RMB1.25 billion investment and is set to become Swire Coca-Cola's largest green, intelligent and diversified plant in the Chinese Mainland.

The Cathay group is now in the final stretch of its rebuild journey, with passenger flights reaching 80% of pre-pandemic levels by the second quarter. In June, Cathay Pacific returned to the world's top five airlines in industry rankings, marking another important milestone. In July, the Cathay group repurchased the remaining 50% of preference shares from the HKSAR Government at a redemption amount of HK$9.75 billion. It has committed more than HK$100 billion in investments over the next seven years for its fleet, cabin products, lounges, and digital and sustainability leadership. It has also worked hard to strengthen its existing major routes, and develop new ones connecting Hong Kong with more destinations in the Chinese Mainland and Belt and Road countries, including to Riyadh in Saudi Arabia. Recruitment and training efforts are ongoing.

Swire Pacific has a long-standing commitment to sustainability through our SwireTHRIVE strategy. In June, we became an adopter of the Taskforce on Nature-related Financial Disclosures (TNFD), and was among nine Hong Kong companies to commit to making TNFD-related disclosures. In 2023, we piloted an internal carbon pricing mechanism at Swire Properties, Swire Coca-Cola and HAECO, and this continued in the first half of 2024. Our operating companies continue to lead the way on sustainability within their respective industries.

On the Group's prospects for the second half of the year, Mr Bradley said, "We will continue to build on our strengths. Our businesses are well-positioned to cope with any immediate adversity and economic challenges, and our long-term focus on investing in our core markets remains unchanged."

The divisional highlights of the 2024 Interim Results are in the Appendix.

Property Division

• Attributable underlying profit, which principally adjusts for changes in fair value of investment properties, decreased to HK$3,133 million in the first half of 2024 from HK$3,195 million in the first half of 2023. The decrease principally reflected higher net finance charges (due to higher borrowings) and a reduction in the office rental income, partly offset by the increase in profit from the sale of car parking spaces in Hong Kong.
• Attributable recurring underlying profit in the first half of 2024, which excludes the profit from divestments aggregating HK$235 million (HK$7 million in the first half of 2023), was HK$2,898 million, compared with HK$3,188 million in the first half of 2023.
• Recurring underlying profit from property investment decreased in the first half of 2024. This principally reflected lower office rental income from Hong Kong (partly due to the loss of revenue arising from the disposal of nine floors of One Island East in December 2023).
• The small underlying loss from property trading in the first half of 2024 was primarily a result of sales and marketing expenses incurred for several residential trading projects.
• The speed of recovery of hotel businesses in Hong Kong was slower than anticipated, while the performance of the hotels in the Chinese Mainland was relatively stable. Performance of the hotels in the USA was mixed.

Beverages Division

• The results of Swire Coca-Cola in the first half of 2024 were adversely affected by the disposal of SCCU in the second half of 2023, partly offset by the share of profit from newly acquired franchise businesses in Thailand and Laos.
• Attributable profit was HK$878 million in the first half of 2024, a 38% decrease from its attributable profit of HK$1,423 million in the first half of 2023.
• Disregarding both the effect of the disposal of SCCU and the acquisition of TNTC and Lao Coca-Cola Bottling Co., Ltd., there was a decrease of 2% in the recurring attributable profit from the first half of 2023.

Aviation Division

Cathay Group

• The Cathay group's profit on a 100% basis was HK$3,613 million for the first half of 2024, compared with a profit of HK$4,268 million for the corresponding period in 2023 (which included significant exceptional gains of HK$2.1 billion).
• The result was driven by the ongoing robust demand for travel and the solid performance of the cargo business.
• The Cathay group continued to add more passenger flights and destinations to the network, with passengers flights reaching 80% of pre-pandemic levels within the second quarter as planned. The additional belly space provided by the passenger flights also enabled it to offer more cargo capacity, resulting in higher tonnage carried in the first half of 2024.
• The results of the Cathay group's associate businesses are reported three months in arrears. The results improved compared with the first half of 2023.

HAECO Group

• The HAECO group achieved a recurring profit of HK$400 million, disregarding a gain on asset disposal at a joint venture company in the Chinese Mainland. This compares with 2023's first-half profit of HK$63 million.
• The profit increase was primarily driven by a continuous recovery of line maintenance activity and a growth in demand for engine overhaul at HAESL and HAECO Engine Services (Xiamen), as well as the absence of loss from the cabin business which was sold in September last year. There was also an increase in base maintenance manhours sold.

Healthcare

• In April, Swire Pacific completed the acquisition of a controlling stake in DeltaHealth, marking its first time as the major shareholder in a healthcare business.
• In July 2024, Swire Pacific made a minority investment in the Indonesia Healthcare Corporation.

*Following a change in accounting policy resulting from the agenda decision approved by the IFRS Interpretation Committee on "Lessor Forgiveness of Lease Payments (IFRS 9 and IFRS 16)", the comparative figures for the six months ended 30th June 2022 have been restated.

About Swire Pacific Limited
Swire Pacific (HKEX: 00019/00087) is a Hong Kong-listed international conglomerate with a diversified portfolio of market leading businesses. The company has a long history in Greater China, where the name Swire or Taikoo (太古) has been established for over 150 years. Swire Pacific's strategy is focused on Greater China and South East Asia, where we seek to grow our core businesses of Property, Beverages, and Aviation, as well as new areas of growth, such as healthcare. Swire Pacific is the largest shareholder in two other listed companies in Hong Kong: Swire Properties Limited and Cathay Pacific Airways Limited. Swire Pacific is listed on the Hang Seng Corporate Sustainability Index, the Dow Jones Sustainability Asia Pacific Index and MSCI All Country World Index (ACWI) ESG Leaders Index.

Visit Swire Pacific's website at www.swirepacific.com

Disclaimer
This document may contain forward‑looking statements that reflect the Company's beliefs, plans or expectations about the future or future events. These forward‑looking statements are based on a number of assumptions, estimates and projections, and are therefore subject to inherent risks, uncertainties and other factors beyond the Company's control. The actual results or outcomes of events may differ materially and/or adversely due to a number of factors, including changes in the economies and industries in which the Group operates (in particular in Hong Kong and the Chinese Mainland), macro‑economic and geopolitical uncertainties, changes in the competitive environment, foreign exchange rates, interest rates and commodity prices, and the Group's ability to identify and manage risks to which it is subject. Nothing contained in these forward‑looking statements is, or shall be, relied upon as any assurance or representation as to the future or as a representation or warranty otherwise. Neither the Company nor its directors, officers, employees, agents, affiliates, advisers or representatives assume any responsibility to update these forward-looking statements or to adapt them to future events or developments or to provide supplemental information in relation thereto or to correct any inaccuracies.

References in this document to Hong Kong are to Hong Kong SAR, to Macau are to Macao SAR and to Taiwan are to the Taiwan region.

For more information, please visit https://doc.irasia.com/listco/hk/swire/interim/2024/intpress.pdf.

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