Hong Kong Aircraft Engineering Company (Haeco), Swire Pacific's aircraft-maintenance subsidiary, is set to post substantial increases in net profit and revenue when it releases its year-end results tomorrow.
But the company also faces a raft of challenges as it grapples with a downturn in the air cargo market which will impact on its aircraft-conversion work in the mainland.
Analysts said turnover was likely to top HK$4.92 billion last year, up 15.3 per cent compared with HK$4.27 billion in 2010. Net profit could also exceed HK$800 million, up from HK$701 million a year earlier, although much will depend on the performance of its mainland offshoot, Taikoo (Xiamen) Aircraft Engineering Company (Taeco).
While Haeco contributed the lion's share of total group profit for the first half of last year, HK$195 million out of HK$425 million, Taeco saw its own net profit double to HK$78 million. The surge reflected a recovery in demand for heavy aircraft maintenance at the Xiamen facility.
But at the time of the interim results Haeco chairman Chris Pratt said: 'Forward bookings for Taeco's airframe heavy maintenance in the second half' last year were weak.
Demand for aircraft conversions, where passenger aircraft are converted to cargo planes at Xiamen, has been adversely affected by the downturn in the airfreight market caused by global economic worries.