The performance of the Taikoo Department fell, but the final increase
Although Swire A (00019) and Swire Properties (01972) recorded a decline in their performance last year, the Group still increased its final dividend significantly. Chairman Merlin Swire said that the difficult days have passed and there are still huge opportunities for development in the Chinese and Hong Kong markets. Taikoo will continue to play its existing strengths.
Taikoo’s net profit fell 9.4% last year to 23.629 billion yuan, but the aviation, beverage and marine services business improved. The Group’s profit from the sale of property interests was also reduced by 3.7% to RMB 7.521 billion.
Continued increase in dividends
Both companies significantly increased their second interim interest rate, which was 0.57 yuan, up 9.6%. The dividends of Swire A shares and B shares both increased by 63.6%, reaching 1.8 yuan and 0.36 yuan respectively. Shi Minglun said that maintaining the continued growth of dividends is the group’s goal, but the poor performance of the aviation and marine services sector in the past five years has prevented the Group from meeting the relevant targets.
Last year, Swire sold a number of non-core assets and businesses. It is estimated that the total amount of sales generated by the related transactions in 2018 and 2019 will be approximately RMB 30 billion. Shi Minglun described the performance of Taikoo last year with “business consolidation and recovery", emphasizing that the sale of mature non-core assets is in line with the development strategy, but last year was a special year. It is not expected to sell assets on a large scale this year.
The marine services department’s recurring losses narrowed by 7.8% to 1.122 billion yuan last year. During the period, the impairment expenses and related write-off expenses increased by 2.8 times to approximately 3.91 billion yuan. Shi Minglun explained that although the ship usage rate has rebounded slightly, it is expected that the industry will fully recover, at least until 2021. In terms of beverages, Swire Beverage’s recurring profit increased 40.7% to 1.354 billion yuan last year, and sales volume also rose 16% to 1.755 billion TEU.
Real estate is the biggest source of Swire’s profit. The chief executive of Taidi, Guy Bradley, said that in the next 1-2 years, “going to Centralization” is a trend, so Taishi is actively rebuilding Taikoo Square. The first phase of the reconstruction project was completed last year and the second phase of the project will be completed in 2021 or 2022.
In terms of retail market, Bai Deli admitted that due to the Sino-US trade war, the retail market in Hong Kong began to weaken in the second half of last year. There is no sign of a significant improvement in the short term. However, the retail market in the Mainland has increased significantly last year, and the trend is expected to improve. Will continue.
Speaking of the development of Dawan District, he pointed out that the group has set up an office in Shenzhen to study the development of business in a suitable location.