Q2 2026 Swire Pacific Ltd Earnings Call

August 6, 2026

Speaker #1: Briefing R, Mr. Guy Bradley, Chairman of SWIRE PACIFIC; Mr. Martin Murray, Finance Director of SWIRE PACIFIC; and Ms. Karen So, Chief Executive Officer of SWIRE Coca-Cola.

Speaker #1: Before we take a detailed look at our results, we'd love to show you a short video highlighting SWIRE PACIFIC's key developments and achievements in the first half of 2026.

Speaker #1: Please enjoy the video. May we now invite Guy, Martin, and Karen to take us through the details of the results.

Speaker #1: Good afternoon, ladies and gentlemen. Welcome to the Swire Pacific 2026 interim results analyst briefing. Present at today's briefing are Mr. Guy Bradley, Chairman of Swire Pacific; Mr. Martin Murray, Finance Director of Swire Pacific; and Ms. Karen So, Chief Executive Officer of Swire Coca-Cola.

Operator: Good afternoon, ladies and gentlemen. Welcome to Swire Pacific 2026 Interim Results Analyst Briefing. Today at the briefing are Mr. Guy Bradley, Chairman of Swire Pacific, Mr. Martin Murray, Finance Director of Swire Pacific, and Ms. Karen So, Chief Executive Officer of Swire Coca-Cola. Before we take a detailed look at our results, we would love to show you a short video highlighting Swire Pacific's key developments and achievements in H1 of 2026. Please enjoy the video. May we now invite Guy, Martin, and Karen to take us through the details of the results.

Speaker #1: Before we take a detailed look at our results, we'd love to show you a short video highlighting Swire Pacific's key developments and achievements in the first half of 2026.

Speaker #1: Please enjoy the video. May we now invite Guy, Martin, and Karen to take us through the details of the results.

Speaker #2: Thank you. Good evening, everybody, and thank you for joining us. I will just kick off with a couple of strategic highlights here. The two points I'd like to emphasize are basically that the first half recurring underlying profit is the highest underlying profit that we've reported.

Speaker #2: And that's driven basically by consumer sentiment in all of our divisions. Improving, and that's a very good trend to see. The second highlight, of course, is that we haven't stopped investing, and the levels of investments that we have across all our businesses are indeed record levels of capital for the group.

Speaker #2: So two very good highlights for the half year. If I look at the specific details across the three main divisions in property, we continue to execute against the $100 billion plan, with currently got seven projects in the Chinese mainland under development, which is more than we've ever had in our history.

Speaker #2: And two of which we'll open in phases at least start to open later this year in Sanya and in Beijing at Taiko Place. On the trading side, also, it's worth highlighting that we've got we're doing a lot more of that, and we've got a very good project going on in Miami and Bangkok.

Speaker #2: Thank you. Good evening, everybody, and thank you for joining us. I will just kick off with a couple of strategic highlights here. The two points I'd like to emphasize are basically that the first-half recurring underlying profit is the highest underlying profit that we've reported.

Guy Bradley: Thank you. Good evening, everybody, thank you for joining us. I will just kick off with a couple of strategic highlights here. The two points I would like to emphasize are basically that the H1 recurring underlying profit is the highest underlying profit that we have reported, and that is driven basically by consumer sentiment in all of our divisions improving, that is a very good trend to see. The second highlight, of course, is that we have not stopped investing, the levels of investments that we have across all our businesses are indeed record levels of capital for the group. Two very good highlights for the H1. If I look at the specific details across the three main divisions in property, we continue to execute against the HKD 100 billion plan.

Speaker #2: What the slide doesn't say is that we've also got quite a lot going on in Hong Kong, our home base, where our residential trading brand is extremely well-known and well-regarded.

Speaker #2: And I can list 269 Queens Road East, La Montana, Headland Residences, and the project in Panhoy Street. So we've got four projects there to be going on with.

Speaker #2: And that's driven basically by consumer sentiment in all of our divisions improving, and that's a very good trend to see. The second highlight, of course, is that we haven't stopped investing, and the levels of investment that we have across all our businesses are indeed record levels of capital for the group.

Speaker #2: So quite a lot of activity on the residential trading side. Switching over to beverages, the integration of the new franchises in Southeast Asia is progressing well.

Speaker #2: You know, we're very happy that we're able to expand firstly into Vietnam, Cambodia, and then into Thailand and Laos. And those territories are in the process of integrating into our business at all sorts of levels, and we're happy with how that's all going so far.

Speaker #2: So, two very good highlights for the half year. If I look at the specific details across the three main divisions in Property, we continue to execute against the $100 billion plan.

Speaker #2: Focusing on the Chinese mainland, we have a $12 billion renminbi investment plan to open up new facilities and to invest in market cold drink equipment.

Speaker #2: We've currently got seven projects in the Chinese mainland under development, which is more than we've ever had in our history. Two of these will open in phases, with at least some parts starting to open later this year, in Sanya and in Beijing at Taikoo Place.

Guy Bradley: We have currently got seven projects in the Mainland China under development, which is more than we have ever had in our history. Two of which will open in phases, at least start to open later this year in Sanya and in Beijing at Taikoo Place. On the trading side, also, it is worth highlighting that we are doing a lot more of that, we have got very good projects going on in Miami and Bangkok. What the slide does not say is that we have also got quite a lot going on in Hong Kong, our home base, where our residential trading brand is extremely well-known and well-regarded. I can list 269 Queens Road East, La Montana, The Headland Residences, and the project in Pan Hoi Street. We have got four projects there to be going on with. Quite a lot of activity on the residential trading side. Switching over to beverages.

Speaker #2: And we continue to push that out. On the aviation side, you heard yesterday about the Cathay Pacific Group and their $150 billion of investment.

Speaker #2: On the trading side, also, it's worth highlighting that we're doing a lot more of that, and we've got a very good project going on in Miami and Bangkok.

Speaker #2: But I'd just like to highlight the Hayco side of aviation here and they have a new Sharman facility opening in later in the year, and they've just announced a new investment in Vietnam as their first expansion of the base maintenance business into Southeast Asia.

Speaker #2: What the slide doesn't say is that we've also got quite a lot going on in Hong Kong, our home base, where our residential trading brand is extremely well known and well regarded.

Speaker #2: So lots going on. On the financial side, Martin will cover that shortly in more detail. But we're very happy to report that the underlying profits increased by $43% versus prior year to $7.8 billion.

Speaker #2: And I can list 269 Queens Road East, La Montanya, Headland Residences, and the project in Pan Hoi Street. So we've got four projects there to be going on with.

Speaker #2: So, quite a lot of activity on the residential trading side. Switching over to Beverages, the integration of the new franchises in Southeast Asia is progressing well.

Guy Bradley: Switching over to beverages. The integration of the new franchises in Southeast Asia is progressing well. We are very happy that we are able to expand firstly into Vietnam, Cambodia, and then into Thailand and Laos. Those territories are in the process of integrating into our business at all sorts of levels, we are happy with how that is all going so far. Focusing on the Mainland China, we have a RMB 12 billion investment plan to open up new facilities and to invest in market cold drink equipment, we continue to push that out. On the aviation side, you heard yesterday about the Cathay Pacific Group and their HKD 150 billion of investment. I would just like to highlight the HAECO side of the aviation here.

Speaker #2: And in turn, we've announced a 15% increase in the first interim dividend to one Hong Kong dollar, 50 per A-share. Just looking at recurring level, by division, the recurring underlying profit for the first half was $7 billion, which was up 48%.

Guy Bradley: The integration of the new franchises in Southeast Asia is progressing well. We are very happy that we are able to expand firstly into Vietnam, Cambodia, and then into Thailand and Laos. Those territories are in the process of integrating into our business at all sorts of levels, we are happy with how that is all going so far. Focusing on the Mainland China, we have a RMB 12 billion investment plan to open up new facilities and to invest in market cold drink equipment, we continue to push that out. On the aviation side, you heard yesterday about the Cathay Pacific Group and their HKD 150 billion of investment. I would just like to highlight the HAECO side of the aviation here.

Speaker #2: You know, we're very happy that we're able to expand, firstly into Vietnam and Cambodia, and then into Thailand and Laos. Those territories are in the process of integrating into our business at all sorts of levels, and we're happy with how that's all going so far.

Speaker #2: And the positive news was across all the three major divisions, as you can see here. 37% up in property, driven obviously by residential trading and that extremely good sale of the six deepwater bay road property.

Speaker #2: Focusing on the Chinese mainland, we have a 12 billion renminbi investment plan to open up new facilities and to invest in market cold drink equipment.

Speaker #2: And we continue to push that out. On the aviation side, you heard yesterday about the Cathay Pacific Group and their $150 billion investment.

Speaker #2: But also accelerating retail performance in both Hong Kong and the Chinese mainland. On the beverage side, they had a good year, and driven mostly by an improvement in the Chinese mainland and so IUP was up 5% in beverages.

Speaker #2: But I’d just like to highlight the HAECO side of the aviation here. They have a new Xiamen facility opening later in the year, and they’ve just announced a new investment in Vietnam as their first expansion of the base maintenance business into Southeast Asia.

Speaker #2: And aviation, 39% increase. Cathay speaks for itself. You've seen that yesterday, but I'd also like to say that there was a very good sort of robust demand for Hayco and their base maintenance and engine overhaul services.

Guy Bradley: they have a new Xiamen facility opening later in the year, and they've just announced a new investment in Vietnam as their first expansion of the base maintenance business into Southeast Asia. lots going on. On the financial side, Martin will cover that shortly in more detail. we're very happy to report that underlying profits increased by 43% versus prior year to HKD 7.8 billion. in turn, we've announced a 15% increase in the first interim dividend to HKD 1.50 per A share. Just looking at the recurring level by division, the recurring underlying profit for H1 was HKD 7 billion, which was up 48%. the positive news was across all the three major divisions, as you can see here, 37% up in property, driven obviously by residential trading and that extremely good sale of the 6 Deep Water Bay Road property.

Speaker #2: So, lots going on. On the financial side, Martin will cover that shortly in more detail. But we're very happy to report that underlying profits increased by 43% versus the prior year, to $7.8 billion.

Speaker #2: So very encouraging signs across the three major divisions in terms of profit contribution. With that, I will ask Martin to dive into the financial side in a bit more detail.

Speaker #2: Thank you.

Speaker #1: Thank you, Chair. Yeah, so as the Chairman mentioned, all the core divisions are performing incredibly well on the back of strong consumer sentiment, which has led to strong profit at both the underlying and the recurring level.

Speaker #2: And in turn, we've announced a 15% increase in the first interim dividend to HK$1.50 per A-share. Just looking at the recurring level, by division, the recurring underlying profit for the first half was $7 billion, which was up 48%.

Speaker #1: Which is very pleasing to see. You can see that that leads to strong cash flow reduced gearing, which allows us to have the record investment and maintain our progressive dividend, which is up 15%.

Speaker #2: And the positive news was across all the three major divisions, as you can see here: 37% up in Property, driven obviously by residential trading, and that extremely good sale of the Six Deep Water Bay Road property.

Speaker #1: This slide is a bit repetitive. It shows the movement in the recurring underlying profit that the Chairman mentioned was at record levels. So in the property division, up 37%, primarily driven by the residential trading profit of the sale of six deepwater bay road.

Speaker #2: But also accelerating retail performance in both Hong Kong and the Chinese Mainland. On the beverage side, they had a good year, driven mostly by an improvement in the Chinese Mainland, and so IUP was up 5% in beverages.

Guy Bradley: also accelerating retail performance in both Hong Kong and the Chinese mainland. On the beverage side, they had a good year, and driven mostly by an improvement in the Chinese mainland, and so IUP was up 5% in beverages. And aviation, 39% increase. Cathay speaks for itself. You've seen that yesterday, but I also like to say that there's a very good sort of robust demand for HAECO and their base maintenance and engine overhaul services. So, very encouraging signs across the three major divisions in terms of profit contribution. With that, I will ask Martin to dive into the financial side in a bit more detail. Thank you.

Speaker #1: But also the continued robust retail sales in the Chinese mainland and some positive momentum in retail in Hong Kong, which is pleasing to see.

Speaker #2: And aviation, 39% increase. Cathay speaks for itself—you saw that yesterday. But I’d also like to say that there was very strong, robust demand for HAECO and their base maintenance and engine overhaul services.

Speaker #1: Beverage is up 5%, improving consumer sentiment in the Chinese mainland. Some more challenges in Southeast Asia, some of the commodity prices have gone up.

Speaker #1: But again, the integration of that continues to go well. On the aviation side, really strong performance, up 39%, driven mainly by the high load factors, yields from Cathay Pacific, despite the higher oil price in the second quarter.

Speaker #2: So, very encouraging signs across the three major divisions in terms of profit contribution. With that, I will ask Martin to dive into the financial side in a bit more detail.

Speaker #2: Thank you.

Speaker #1: Thank you, Chair. Yes, as the Chairman mentioned, all the core divisions are performing incredibly well on the back of strong consumer sentiment, which has led to strong profit at both the underlying and recurring levels.

Speaker #1: And Hayco continues to go well in both the base maintenance and the engine side. Lower interest rates helping the head office and other costs.

Martin Murray: Thank you, chair. as the chairman mentioned, all the core divisions are performing incredibly well on the back of strong consumer sentiment, which has led to strong profit at both the underlying and at the recurring level, which is very pleasing to see. You can see that that leads to strong cash flow, reduced gearing, which allows us to have the record investment and maintain our progressive dividend, which is up 15%. This slide is a bit repetitive. It shows the movement in the recurring underlying profit that the chairman mentioned was at record levels. So in the property division, up 37%, primarily driven by the residential trading profit of the sale of 6 Deep Water Bay Road. But also the continued robust retail sales in the Chinese mainland and some positive momentum in retail in Hong Kong, which is pleasing to see.

Speaker #1: On the non-recurring items, these are mainly from the aviation division in the first half of 2026. You'll see the $309 million and the $434 million relates to the sale of the Cathay shares at the SWIRE Pacific level to get us back to the 45%.

Speaker #1: Which is very pleasing to see. You can see that that leads to strong cash flow, reduced gearing, which allows us to have the record investment and maintain our progressive dividend, which is up 15%.

Speaker #1: And the $434 is the deemed disposal of the gain on the deemed disposal in Cathay of Air China. Last year, the big movement came from property investment, which was the Miami sale.

Speaker #1: This slide is a bit repetitive. It shows the movement in the recurring underlying profit that the Chairman mentioned was at record levels. So, in the Property division, up 37%, primarily driven by the residential trading profit of the sale of 60 Water Bay Road.

Speaker #1: That's the $833 and $225. On the liquidity piece, you'll see there is some refinancing in 28, 29. We're going through that process now, and we'll push that out to the 2031, 2032.

Speaker #1: But also the continued robust retail sales in the Chinese mainland, and some positive momentum in retail in Hong Kong, which is pleasing to see.

Speaker #1: We have our debt has come down 4%. Our weighted average cost of debt is down as well at 3.4%. So we're in great shape on the balance sheet.

Speaker #1: Beverage is up 5%, reflecting improved consumer sentiment in the Chinese mainland. There are some additional challenges in Southeast Asia, as some of the commodity prices have gone up.

Martin Murray: Beverages up 5%, improving consumer sentiment in the Chinese mainland. Some more challenges in Southeast Asia. Some of the commodity prices have gone up. But again, the integration of that continues to go well. On the aviation side, really strong performance up 39%, driven mainly by the high load factors yields from Cathay Pacific, despite the higher oil price in the second quarter. And HAECO continues to go well in both the base maintenance and the engine side. And lower interest rates helping the head office and other costs. On the non-recurring items, these are mainly from the aviation division in the first half of 2026. You'll see the 309 million and the 434 million relates to the sale of the Cathay shares at the SWIRE PACIFIC LTD/ADR/ level to get us back to the 45%.

Martin Murray: Beverages up 5%, improving consumer sentiment in the Chinese mainland. Some more challenges in Southeast Asia. Some of the commodity prices have gone up. But again, the integration of that continues to go well. On the aviation side, really strong performance up 39%, driven mainly by the high load factors yields from Cathay Pacific, despite the higher oil price in Q2. And HAECO continues to go well in both the base maintenance and the engine side. And lower interest rates helping the head office and other costs. On the non-recurring items, these are mainly from the aviation division in the first half of 2026. You'll see the 309 million and the 434 million relates to the sale of the Cathay shares at the SWIRE PACIFIC LTD/ADR/ level to get us back to the 45%.

Speaker #1: Our fixed rate borrowing there at 75%. And then this is just the overall picture that we get asked about in terms of the overall strategy.

Speaker #1: But again, the integration of that continues to go well. On the aviation side, really strong performance, up 39%, driven mainly by the high load factors and yields from Cathay Pacific, despite the higher oil price in the second quarter.

Speaker #1: As I said, we actively manage our balance sheet prudently. Our gearing has come down to 19.3%. Weighted average cost of debt 3.4, 75% of fixed borrowing rate.

Speaker #1: And HAECO continues to perform well in both base maintenance and engine operations, and lower interest rates are helping with head office and other costs.

Speaker #1: Our primarily objective strategically is for our long-term strategic investments, which we're doing at record levels across all our core divisions. And then we focus on operational excellence, driving up returns through targets from each of the businesses.

Speaker #1: On the non-recurring items, these are mainly from the Aviation Division in the first half of 2026. You'll see the $309 million, and the sale of the Cathay shares at the Swire Pacific level to get us back to the 45%.

Speaker #1: Roy mentioned earlier in the property business doing more residential trading, for example. And at the same time, maintaining our dividend growth strategy. And potentially looking at share buyback, but it's in that order.

Speaker #1: And the $434 million is the gain on the deemed disposal in Cathay of Air China. Last year, the big movement came from property investment, which was the Miami sale.

Martin Murray: The HKD 434 is the gain on the deemed disposal in Cathay of Air China. Last year, the big movement came from property investment, which was the Miami sale. That's the HKD 833 in 2025. On the liquidity piece, you'll see there is some refinancing in 2028, 2029. We're going through that process now, and we'll push that out to the 2031, 2032. Our debt has come down 4%, our weighted average cost of debt is down as well at 3.4%. We're in great shape on the balance sheet. Our fixed rate borrowing there at 75%. This is just the overall picture that we get asked about in terms of the overall strategy. As I said, we actively manage our balance sheet prudently. Our gearing has come down to 19.3%. Weighted average cost of debt 3.4%, 75% at fixed borrowing rate.

Speaker #1: With that, I will oh, sorry, there's a sustainability slide I do forget. I apologize. So we have launched our SD2050 slide. A strategy. We've moved it into reporting like the ISSB, so climate, nature, and social.

Speaker #1: That's the $833 million and $2,025 million. On the liquidity piece, you'll see there is some refinancing in 2028, 2029. We're going through that process now, and we'll push that out to 2031, 2032.

Speaker #1: It's the same. So waste and water in that piece. Down the left-hand side, you'll see our 2030 targets. And on the right-hand side, progress against that.

Speaker #1: Our debt has come down 4%. The weighted average cost of debt is down as well, at 3.4%. So we're in great shape on the balance sheet.

Speaker #1: So we've almost achieved our 2030 targets across climate, nature, and hit our targets for people. And focus on the communities. So we're making strong progress on our sustainability targets.

Speaker #1: Our fixed-rate borrowing rate is at 75%. And then this is just the overall picture that we get asked about in terms of the overall strategy.

Speaker #1: With that, I'll pass it back to you, Chairman.

Speaker #2: Thank you. I'll just take the property side. This is a familiar chart to everybody by now, but it keeps getting better. It shows that the $100 billion plan that we announced, I think in 2022, is now almost 70% committed.

Speaker #1: As I said, we actively manage our balance sheet prudently. Our gearing has come down to 19.3%. Weighted average cost of debt 3.4, 75% up fixed borrowing rate.

Speaker #1: Our primary objective, strategically, is our long-term strategic investments, which we are making at record levels across all our core divisions. And then we focus on operational excellence, driving up returns through targets from each of the businesses.

Martin Murray: Our primary objective strategically is for long-term strategic investments, which we're doing at record levels across all our core divisions. We focus on operational excellence, driving up returns through targets from each of the businesses. Roy mentioned earlier that in the property business, doing more residential trading, for example. At the same time maintaining our dividend growth strategy, and potentially looking at share buyback, but it's in that order. With that, oh, sorry, there's a sustainability slide I did forget. I apologize. We have launched our SD 2050 slide strategy, and we've moved it into reporting like the ISSB, so climate, nature, and social, so waste and water in that piece. Down the left-hand side, you'll see our 2030 targets. On the right-hand side, progress against that.

Speaker #2: And that's across the three major core markets that we're invested in. A bit more detail on the next slide, which shows that the pipeline is good.

Speaker #1: Roy mentioned earlier that, in the property business, we are doing more residential trading, for example, and at the same time maintaining our dividend growth strategy, and potentially looking at a share buyback.

Speaker #2: It's diverse, and in terms of sector, it's diverse in terms of geography. So we're having a sort of balanced investment plan as we go forward.

Speaker #2: And that's what we want to see. The first half results, as I say, were driven significantly by the residential profit on the trading, but the encouraging note for me here for this half is that our rental income is going up, driven by, on the retail side, driven particularly driven by the Hong Kong and the Chinese mainland portfolios.

Speaker #1: But it's in that order. With that, I will—oh, sorry, there's a sustainability slide I did forget. I apologize. So we have launched our SD2050 slide.

Speaker #1: A strategy. We've moved it into reporting like the ISSB—so, climate, nature, and social—the same, so waste and water in that piece. Down the left-hand side, you'll see our 2030 targets.

Speaker #2: And that's very encouraging from a future point of view. On the Chinese mainland itself, you can see now the two points here to note are that the contribution of gross rental income from the Chinese mainland is now almost half.

Speaker #1: And on the right-hand side, progress against that. So we've almost achieved our 2030 targets across climate, nature, and hit our targets for people. And focus on the communities.

Martin Murray: We've almost achieved our 2030 targets across climate and nature and hit our targets for people and focus on the community. We're making strong progress on our sustainability targets. With that, I'll pass it back to you, Chairman.

Speaker #1: So, making strong progress on our sustainability targets. With that, I'll pass back to you, Chairman.

Speaker #2: It's at 46%. And growing. And specifically, if you look at the Chinese mainland retail, it's now our biggest contributor in terms of gross rental income.

Guy Bradley: Thank you. I'll just take the property side. This is a familiar chart to everybody by now, but it keeps getting better. It shows that the HKD 100 billion plan that we announced, I think, in 2022, is now almost 70% committed, and that's across the three major core markets that we're invested in. A bit more detail on the next slide, which shows that the pipeline is good, it's diverse in terms of sector, it's diverse in terms of geography. We're having a sort of balanced investment plan as we go forward, and that's what we want to see. The H1 results, as I say, were driven significantly by the residential profit on the trading. The encouraging note for me here, for this H1, is that our rental income is going up, on the retail side, particularly driven by the Hong Kong and the Chinese mainland portfolios.

Speaker #2: And that's an incredible performance. It's grown over the last 10 years. Just looking at the Hong Kong office market, which has historically been our top contributor, obviously at a cyclical soft point, I would say, we've had a good defensive position with high occupancy through that soft part of the cycle.

Speaker #2: And that's across the three major core markets that we're invested in. There's a bit more detail on the next slide, which shows that the pipeline is good.

Speaker #2: It's diverse. And in terms of sector, it's diverse in terms of geography. So we're having a sort of balanced investment plan as we go forward.

Speaker #2: And as you heard Tim say in the previous session, we're now sort of starting to come out of that cycle with rents starting to go up, led in Pacific Place in our case.

Speaker #2: And that's what we want to see. The first half results, as I say, were driven significantly by the residential profit on the trading. But the encouraging note for me here for this half is that our rental income is going up, driven by—on the retail side—driven particularly by the Hong Kong and the Chinese Mainland portfolios.

Speaker #2: And we think that's a good sign as we start to look ahead at the next two to three years. In terms of Outlook, we think there'll be positive momentum across all the different portfolios.

Speaker #2: We've got narrowing reversions in the Hong Kong office portfolio. And as I said just now, led by Pacific Place, probably a little bit slower in Taiko Place.

Speaker #2: And that's very encouraging from a future point of view. On the Chinese mainland itself, you can see now that there are two points here to note. The contribution of gross rental income from the Chinese mainland is now almost half.

Guy Bradley: That's very encouraging from a future point of view. On the Chinese mainland itself, you can see now the two points here to note are that the contribution of gross rental income from the Chinese mainland is now almost half. It's at 46% and growing. Specifically, if you look at the Chinese mainland retail, it's now our biggest contributor in terms of gross rental income, and that's an incredible performance that's grown over the last 10 years. Just looking at the Hong Kong office market, which has historically been our top contributor. Obviously, it's a cyclical soft point, I would say. We've had a good defensive position with high occupancy through that soft part of the cycle.

Speaker #2: On the retail side, we're seeing positive growth momentum in the Chinese mainland and a sustained recovery in Hong Kong as confidence and sentiment improves.

Speaker #2: Karen, SWIRE Coca-Cola.

Speaker #3: Thank you. Thank you. And good afternoon, everyone. So I'm pleased to report that SWIRE Coca-Cola has delivered a broad-based growth. This performance demonstrates our effective strategy, our resilient portfolio, and our ability to execute with discipline.

Speaker #2: It's at 46% and growing. And specifically, if you look at the Chinese Mainland retail, it's now our biggest contributor in terms of gross rental income.

Speaker #2: And that's an incredible performance. It's grown over the last 10 years. Just looking at the Hong Kong office market, which has historically been our top contributor—obviously, it's at a cyclical soft point, I would say—we've had a good defensive position with high occupancy through that soft part of the cycle.

Speaker #3: In a very dynamic operating environment, serving a consumer base of nearly 1 billion people. So let's look at the market overview. The first half of 2026 saw improving market conditions, particularly in the Chinese mainland.

Speaker #3: Where demand rebounded in the first in the fast-moving consumer sectors, following a very challenging 2025. The China's consumer market remained broad and deep. It is also at a forefront of the digital retail space.

Speaker #2: And as you heard Tim say in the previous session, we're now sort of starting to come out of that cycle, with rents starting to go up, led in Pacific Place in our case.

Guy Bradley: As you heard Tim say in the previous session, we're now sort of starting to come out of that cycle with rents starting to go up, led in Pacific Place in our case. We think that's a good sign as we start to look ahead at the next two to three years. In terms of outlook, we think there'll be positive momentum across all the different portfolios. We've got narrowing reversions in the Hong Kong office portfolio and as I said just now, led by Pacific Place, probably a little bit slower in Taikoo Place. On the retail side, we're seeing positive growth momentum in the Chinese mainland and a sustained recovery in Hong Kong as confidence and sentiment improves. Karen, Swire Coca-Cola.

Speaker #3: And we are closely matching consumers' changing consumption habits by capturing the volume growth in the e-commerce channel, immediate consumption, and also through our investment in the cold drink equipment for emerging new sales channel.

Speaker #2: And we think that's a good sign as we start to look ahead at the next two to three years. In terms of outlook, we think there'll be positive momentum across all the different portfolios.

Speaker #3: The conflict in the Middle East continues to drive uncertainty in oil and aluminum prices. This is a headwind felt by buffalos worldwide. While the input caused inflation has continued to weigh on our margin, particularly in Southeast Asia, we are managing our exposure through advanced purchase contract and commercial initiative.

Speaker #2: We've got narrowing reversions in the Hong Kong office portfolio, and as I said just now, led by Pacific Place—probably a little bit slower in Taikoo Place.

Speaker #2: On the retail side, we're seeing positive growth momentum in the Chinese mainland and a sustained recovery in Hong Kong, as confidence and sentiment improve.

Speaker #3: The consumption trends are evolving towards a better value product. By maintaining a disciplined channel packaging, pricing strategy, we are capturing the growth with affordable entry pack that meets the consumer needs.

Speaker #2: Karen, SWIRE Coca-Cola.

Speaker #3: Thank you. Thank you. And good afternoon, everyone. I'm pleased to report that Swire Coca-Cola has delivered broad-based growth. This performance demonstrates our effective strategy, our resilient portfolio, and our ability to execute with discipline.

Karen So: Thank you. Thank you, and good afternoon, everyone. I'm pleased to report that Swire Coca-Cola has delivered a broad-based growth. This performance demonstrate our effective strategy, our resilient portfolio, and our ability to execute with discipline in a very dynamic operating environment, serving a consumer base of nearly 1 billion people. Let's look at the market overview. The H1 2026 saw improving market conditions, particularly in the Chinese mainland, where demand rebounded in the fast-moving consumer sectors following a very challenging 2025. The Chinese consumer market remain broad and deep. It is also at the forefront of the digital retail space, and we are closely matching consumers' changing consumption habit by capturing the volume growth in the e-commerce channel, immediate consumption, and also through our investment in the cold drink equipment for emerging new sales channel.

Speaker #3: While the sparkling continued to remain our core growth driver, we are also rapidly growing our low and no sugar portfolio, alongside the functional portfolio to meet the shifting consumer preference.

Speaker #3: In a very dynamic operating environment, serving a consumer base of nearly 1 billion people. So, let's look at the market overview. The first half of 2026 saw improving market conditions, particularly in the Chinese mainland.

Speaker #3: This shift in our product mix is already taking place, in the key markets, highlighted by our successful consumer-led rollout like Sprite Tea, our expansion to the energy category through Monster Brand, accelerated growth of the zero-calorie sparkling drinks.

Speaker #3: Demand rebounded in the first half in the fast-moving consumer sectors, following a very challenging 2025. China's consumer market remained broad and deep. It is also at the forefront of the digital retail space.

Speaker #3: We invest for the long term in every market we serve. That means the disciplined capital allocation, operational excellence, and the relentless focus on major investment program, which was first announced in 2023, is well underway.

Speaker #3: We continue to advance our $12 billion RMB investment plan in new facility and equipment in the Chinese mainland to support our expected growth. I'm delighted to report that in May, our two world-class intelligent green production plant commenced production in Kunshan of Jiangsu Province and Guangzhou in Guangdong.

Speaker #3: The conflict in the Middle East continues to drive uncertainty in oil and aluminum prices. This is a headwind felt by businesses worldwide. While the input cost inflation has continued to weigh on our margin, particularly in Southeast Asia, we are managing our exposure through advanced purchase contracts and commercial initiatives.

Karen So: The conflict in the Middle East continues to drive uncertainty in oil and aluminum prices. This is a headwind felt by bottlers worldwide. While the input cost inflation has continued to weigh on our margin, particularly in Southeast Asia, we are managing our exposure through advanced purchase contract and commercial initiative. The consumption trends are evolving towards a better value product. By maintaining a disciplined channel packaging pricing strategy, we are capturing the growth with affordable entry pack that meets the consumer needs. While the sparkling continue to remain our core growth driver, we are also rapidly growing our low and no sugar portfolio alongside the functional portfolio to meet the shifting consumer preference.

Speaker #3: Together, they host over 20 production lines and they are set to boost our total mainland China production capacity by 10%. Both of these facilities are integrating AI into our manufacturing process and are legal certified.

Speaker #3: The consumption trends are evolving towards better value products. By maintaining a disciplined channel, packaging, and pricing strategy, we are capturing growth with affordable entry packs that meet consumer needs.

Speaker #3: Building on this momentum, construction is also underway for our new production facility in Hainan Province, targeted for completion by end of 2027. In the Taiwan region, production upgrade work continues with a newly automated storage and retrieval system.

Speaker #3: While sparkling continues to remain our core growth driver, we are also rapidly growing our low- and no-sugar portfolio, alongside the functional portfolio, to meet shifting consumer preferences.

Speaker #3: This shift in our product mix is already taking place. In key markets, highlighted by our successful consumer-led rollout like Sprite Tea, our expansion into the energy category through the Monster brand, and accelerated growth of zero-calorie sparkling drinks.

Karen So: This shift in our product mix is already taking place in the key markets, highlighted by our successful consumer lab rollout like Sprite Tea, our expansion to the energy categories through Monster brand, accelerated growth of the zero-calorie sparkling drinks. We invest for the long term in every market we serve. That means the disciplined capital allocation, operational excellence, and relentless focus on innovation. In Greater China, our major investment program, which was first announced in 2023, is well underway. We continue to advance our 12 billion RMB investment plan in new facility and equipment in the Chinese mainland to support our expected growth. I am delighted to report that in May, our two world-class intelligent green production plant commenced production in Kunshan of Jiangsu Province and Guangzhou in Guangdong. Together, they host over 20 production lines and they are set to boost our total Mainland China production capacity by 10%.

Speaker #3: And also an accepted production line at our Taoyuan facility. Turning to Southeast Asia, we remain confident in the long-term growth potential of this market, driven by favorable demographic, the potential of growing sparkling beverages, in the market with currently low per capita consumption, and positive GDP growth.

Speaker #3: We invest for the long term in every market we serve. That means disciplined capital allocation, operational excellence, and a relentless focus on innovation.

Speaker #3: We have invested significantly in cold drink equipment and production assets, including our new affordable small sparkling package in Vietnam. We also continue to transfer digital expertise, operational know-how, innovation from global best practice to our Southeast Asia businesses.

Speaker #3: In Greater China, our major investment program, which was first announced in 2023, is well underway. We continue to advance our $12 billion R&B investment plan in new facilities and equipment in the Chinese mainland to support our expected growth.

Speaker #3: So underpinning all of this, our investment in digital and AI, and we're building an intelligent enterprise on the foundation of modern process, trusted data, and a unified digital core.

Speaker #3: I'm delighted to report that in May, our two world-class intelligent green production plants commenced production in Kunshan, Jiangsu Province, and Guangzhou, Guangdong.

Speaker #3: Together, they host over 20 production lines and are set to boost our total mainland China production capacity by 10%. Both of these facilities are integrating AI into our manufacturing process and are legally certified.

Karen So: Together, they host over 20 production lines and they are set to boost our total Mainland China production capacity by 10%. Both of these facilities are integrating AI into our manufacturing process and are LEED Gold certified. Building on this momentum, construction is also underway for our new production facility in Hainan Province, targeted for completion by end of 2027. In the Taiwan region, production upgrade work continues with a newly automated storage and retrieval system, and also an aseptic production line at our Taoyuan facility. Turning to Southeast Asia, we remain confident in the long-term growth potential of this market. Driven by favorable demographic, the potential of growing sparkling beverages in the market with currently low per capita consumption and positive GDP growth. We have invested significantly in cold drink equipment and production assets, including our new affordable small sparkling package in Vietnam.

Speaker #3: By scaling AI across organizations, we're empowering our team with better insight, automating, routine tasks, and enabling a faster higher quality decision. So let me walk you through our financial results.

Karen So: Both of these facilities are integrating AI into our manufacturing process and are LEED Gold certified. Building on this momentum, construction is also underway for our new production facility in Hainan Province, targeted for completion by end of 2027. In the Taiwan region, production upgrade work continues with a newly automated storage and retrieval system, and also an aseptic production line at our Taoyuan facility. Turning to Southeast Asia, we remain confident in the long-term growth potential of this market. Driven by favorable demographic, the potential of growing sparkling beverages in the market with currently low per capita consumption and positive GDP growth. We have invested significantly in cold drink equipment and production assets, including our new affordable small sparkling package in Vietnam. We also continue to transfer digital expertise, operational know-how, innovation from global best practice to our Southeast Asia businesses.

Speaker #3: Building on this momentum, construction is also underway for our new production facility in Hainan Province, targeted for completion by the end of 2027. In the Taiwan region, production upgrade work continues with a newly automated storage and retrieval system.

Speaker #3: Our recurring attributable profit in the first half of 2026 was $907 billion Hong Kong dollar. Representing a 5% increase from the same period in '25.

Speaker #3: This was mainly driven by the robust performance in the Chinese mainland. In the Chinese mainland, recurring profit increased by 24% to $727 million Hong Kong dollar.

Speaker #3: And also, an accepted production line at our Taoyuan facility. Turning to Southeast Asia, we remain confident in the long-term growth potential of this market, driven by favorable demographics and the potential of growing sparkling beverages in a market with currently low per capita consumption.

Speaker #3: Driven by strong volume growth across the emerging channels such as e-commerce. Our first our business in the first half year remained relatively insulated from the higher raw material costs due to our effective procurement strategy.

Speaker #3: And positive GDP growth. We have invested significantly in cold drink equipment and production assets, including our new affordable small sparkling package in Vietnam. We also continue to transfer digital expertise, operational know-how, and innovation from global best practices to our Southeast Asia businesses.

Speaker #3: In Vietnam and Cambodia, recurring profit was down by 13% to $98 million Hong Kong dollar, that drop was largely due to a lower exchange gain on US dollar denominated bank balance.

Karen So: We also continue to transfer digital expertise, operational know-how, innovation from global best practice to our Southeast Asia businesses. Underpinning all of this, our investment in digital and AI, and we are building an intelligent enterprise on a foundation of modern process, trusted data, and a unified digital core. By scaling AI across organization, we are empowering our team with better insight, automating routine tasks, and enabling a faster, higher quality decision. Let me walk you through our financial results. Our recurring attributable profit in H1 2026 was HKD 907 billion, representing a 5% increase from the same period in 2025. This was mainly driven by the robust performance in the Chinese mainland. In the Chinese mainland, recurring profit increased by 24% to HKD 727 million, driven by strong volume growth across the emerging channels such as e-commerce.

Speaker #3: If we strip out that once off impact, attributable profit would have actually grown by 15%. In the Thailand and Laos, recurring profit went down by 10% to $95 million Hong Kong dollar, mainly due to a lower interest income.

Speaker #3: So, underpinning all of this are our investments in digital and AI. We're building intelligent processes, trusted data, and a unified digital core.

Karen So: Underpinning all of this, our investment in digital and AI, and we are building an intelligent enterprise on a foundation of modern process, trusted data, and a unified digital core. By scaling AI across organization, we are empowering our team with better insight, automating routine tasks, and enabling a faster, higher quality decision. Let me walk you through our financial results. Our recurring attributable profit in H1 2026 was HKD 907 billion, representing a 5% increase from the same period in 2025. This was mainly driven by the robust performance in the Chinese mainland. In the Chinese mainland, recurring profit increased by 24% to HKD 727 million, driven by strong volume growth across the emerging channels such as e-commerce. Our business in H1 remained relatively insulated from the higher raw material cost due to our effective procurement strategy.

Speaker #3: After cash was deployed to acquire the 30% stake in our Vietnam buffalo. Excluding those impacts, the profit would have grown by 16% due to the strong sparkling volume growth and the commercial initiative in this market.

Speaker #3: By scaling AI across organizations, we're empowering our team with better insight, automating routine tasks, and enabling faster, higher-quality decisions. So, let me walk you through our financial results.

Speaker #3: In Hong Kong, profit grew by 5% to $58 million, mainly driven by mainly due to a once off lease termination compensation received in the first half of 2025.

Speaker #3: Our recurring attributable profit in the first half of 2026 was HK$907 billion, representing a 5% increase from the same period in 2025.

Speaker #3: Excluding this once off item, our underlying performance will be better than last year. Taiwan, recurring profit increased by the exceptional 42%, driven by strong sales volume increase.

Speaker #3: This was mainly driven by the robust performance in the Chinese mainland. In the Chinese mainland, recurring profit increased by 24% to HK$727 million.

Speaker #3: So I talk about our recurring profit by territory on the previous slide. So now, while some market has reported a decline in profit, due to the once off factors as I mentioned, I want to highlight that our underlying performance remains robust, as overall revenue grown by 10%, driven by the volume rise across the market.

Speaker #3: Driven by strong volume growth across emerging channels such as e-commerce, our business in the first half of the year remained relatively insulated from the higher raw material costs, due to our effective procurement strategy.

Karen So: Our business in H1 remained relatively insulated from the higher raw material cost due to our effective procurement strategy. In Vietnam and Cambodia, recurring profit was down by 13% to HKD 98 million. That drop was largely due to

Speaker #3: In Vietnam and Cambodia, recurring profit was down by 13% to $98 million Hong Kong dollar. That drop was largely due to recurring profit was down by 13% to $98 million Hong Kong dollar.

Karen So: In Vietnam and Cambodia, recurring profit was down by 13% to HKD 98 million. That drop was largely due to

Speaker #3: Overall, EBITDA increased by 11% with our margin edging up from 12.8 to 12.9%. On the strong our strong first half performance reflected the effectiveness of our strategy and also the discipline of our commercial execution.

Speaker #3: It lays a strong foundation for the remainder of the year. However, we anticipate that the macroeconomic and geopolitical environment will remain complex, elevated aluminum price, and ongoing energy volatility will continue to place pressure on raw material, and logistic expenses.

Speaker #3: While this has been present margin risk across the beverage industry, we have put in place a range of commercial and cost initiative to reduce the exposure.

Speaker #3: In the Chinese mainland, our business is growing steadily and we're capturing category specific growth even as broader consumer sentiment remains value conscious. In the Southeast Asia, we're confident over the long term growth potential in Vietnam, affordability-led growth supported by our entry pad strategy in sparkling and portfolio expansion will help us capture further growth.

Speaker #3: In Thailand, while the impact of sugar test give cautious for caution, we are encouraged by the early signs of our entrance into energy category, and we'll continue to expand our low and no sugar portfolio.

Speaker #3: Overall, we remain confident about the prospect of our market, while support by our continue long-term investment. And we'll continue to innovate and transfer operational expertise to Southeast Asia.

Speaker #3: And all of this is meant for driving a better execution in the market for further growth. So with that, thank you, and now hand over to Martin.

Speaker #1: Thank you. Yeah. And aviation has performed exceptionally well and continues to do so. So it's fantastic to see, as Karen mentioned, all our core businesses are investing into the long term and from a HACO perspective, it's an exciting time zone on that piece, particularly the problems I've had with cleaning that up, and we've exited the US side like we did in properties very much swipe specific focused on greater China.

Speaker #1: And then we've got the excitement of moving the Xiamen facility that will open later this year. And then as the chairman mentioned, in 2028, moving facilities into Vietnam.

Speaker #1: So exciting times in terms of investment in HACO. And then the Cathay Group has 150 billion committed that was mentioned earlier, and it's great to see Cathay growing again with Hong Kong being an aviation and financial hub.

Speaker #1: And so targeting to have 150 new aircraft joining the fleet over the next 10 years, and targeting 150 destinations by the end of that 10-year period.

Speaker #1: The results are very strong in both HACO and particularly Cathay. So really driven by the Cathay strong results. In HACO, you can see the base maintenance, line maintenance, and engine performing well.

Speaker #1: And the other items coming down as we have exited the ITM program last year. And on the Cathay Group, it really is a great story in both passenger and cargo.

Speaker #1: With strong growth in capacity up 11.8%, strong load factors, and higher yield across the board. So first quarter, very strong. Second quarter was impacted by the Middle East and the higher oil price.

Speaker #1: But strong load factors, made it a good first half overall. And the outlook again, remains good for both entities. HACO will continue we think to have strong base maintenance and engine services.

Speaker #1: And at the Cathay side, whilst we there is still the Middle East uncertainty and a higher oil price, we expect load factors and yield to continue to be strong.

Speaker #1: With healthcare, I'll mention this very briefly. The strategy in healthcare, as we've said for a while now, is patients. As we look to expand healthcare, we believe a lot of our targets are overvalued at this point in time.

Speaker #1: So we're really our betting down the operation side. So it's great to see Delta moving in the right direction, and we have a new CEO appointed to lead our healthcare business.

Speaker #1: So we're heavily focused on our business that we own in Delta and learning more in that front. But the healthcare business will remain a small part of the portfolio over the medium term.

Speaker #1: With that, I'll pass back to you two.

Speaker #2: Thank you. Thank you. So three key takeaways from what we just heard. An excellent first half with very good and improving consumer sentiment. We expect that consumer sentiment improvement and to translate across into the second half and we continue thirdly to with our planned strategic investment program across all of our businesses.

Speaker #2: So I'd say a very good set of results in the first half which we anticipate barring anything untoward will continue into the remainder of the year.

Browse all earnings call transcripts

Q2 2026 Swire Pacific Ltd Earnings Call

Request TrialDemo

Swire Pacific

Earnings