Swire Pacific Ltd, the Hong Kong-based conglomerate that controls Cathay Pacific, posted a 38 percent decline in first-half underlying profits.

Swire's underlying profits dropped to HK$3.27 billion in the first half this year from HK$5.26 billion in the same period last year, according to the company's statement.

First-half net profits fell to HK$12.38 billion from HK$12.49 billion while revenue rose to HK$11.78 billion from HK$10.34 billion.

Cathay Pacific Airways reported its first loss in five years, booking only HK$10 million profits to the company, compared with HK$1.283 billion in first half of 2007.

The aviation loss has offset the 22 percent gain in property division to HK$10.95 billion. This includes a net property valuation gain of HK$8.09 billion, up from HK$7.31 billion in 2007.

Underlying profits in the property division increased by 8 percent to HK$1.92 billion or 59 percent of the total, with gross rental income rising by 23 percent to HK$3.26 billion reflecting strong demand for office and retail space.

One Island East, the company's new office building in Quarry Bay, was completed in March this year with 91 percent space occupied. Meanwhile, the company has announced a HK$1.5 billion refurbishment of Pacific Place while a 12-storey residential building covering about 68,000 sq ft is expected to complete in 2010.

On the mainland, the company's retail space at the north site of the Village at Sanlitun is expected to open in early 2009 while the south site has opened in July.

The company's other projects include the joint-venture with Sino-Ocean Land and Taikoo Hui, a mixed-use commercial development in Guangzhou, both of which will be completed in 2010.

The group's other business includes beverages, marine services, as well as trading and industrial, which contributed HK$196 million, HK$878 million and HK$234 million in net profits respectively.

An interim dividend of HK$0.90 and HK$0.18 per share, which are same as last year, will be distributed to Swire A share and B share respectively.

Chinese Estates Holdings, the flagship property company of tycoon Joseph Lau, posted 71.6 percent jump in net profits, benefiting from robust rental growth and securities gains.

The company's first half net profits were HK$3.52 billion due to the fair value gains on investment properties and gains on disposal of listed securities. The company's turnover dropped 61.1 percent to HK$986 million due to the decrease in turnover of securities investment and sales of development properties.

(HK Edition 08/08/2008 page6)