Cathay Pacific Airways Aktie

Good afternoon. Welcome to Cathay Group's 2025 Annual Results Analyst Briefing. My name is Andy Wong, General Manager, Corporate Affairs for Cathay. Whether you're attending here in person or online, it is a pleasure to see you all, and thank you for joining us. Introducing our speakers for today, Chief Executive Officer, Mr. Ronald Lam; Chief Financial Officer, Ms. Rebecca Sharpe. We'll begin the presentations by Ronald and Rebecca, after which we'll open the floor to questions. The slides and video recording of today's briefing will be available for download on our Investor Relations page after the briefing. Without further ado, let me invite Ronald to start the presentation. Ronald, please.

Good afternoon, everyone. Very happy to see all of you here. The first part, I would just give a brief overview on what we have achieved in the last 3 years and then how we're going to move forward for the next 5 years. And first of all, I would like to show you this time horizon is the journey we've gone through in recent years, starting with 2020 to 2022. Of course, those were the COVID-19 years.

And during those 3 years, we fought hard to survive and we did. And we also took the opportunity to transform many aspects of the Cathay Group so that when the pandemic was over, we could come out stronger than before. So Survive and Thrive. And it was probably the worst 3 years of our history over the past 80 years. And I think I'm so glad that is now well behind us.

And after that, 2023 to 2025, another 3 years where we spent our efforts rebuilding from the pandemic as well as investing in the future. Thanks to the opening of the Three Runway System at the end of 2024, it provided us with a major opportunity for growth, and that's what we did in the last 3 years. And last 3 years, I would say, was probably the best 3 years in our Cathay history. So we had the worst 3 years and then followed by the best 3 years. So quite a mirror image. And at the airline plus subsidiary level, I would say the loss we made in the worst 3 years is now fully recovered by the best 3 years already. So I think it's almost like a perfect mirror image.

Now we are into a new era. The next planning period for us is 2026 to 2030. The next 5 years is how we look at things. And 2026 is a new beginning, of course, and we are turning 80 years old. So it's a very special year from that regard. And these 5 years, there are also 2 themes. We need to sustain our success over the past 3 years. How can we make it consistent moving forward? How can we sustain our high performance into the next 5 years is one thing.

There are certain areas, although we've made progress in the last 3 years, but we are still not where we want it to be. So there are areas, especially when it comes to our customers, we still need to improve and further elevate customer experience is the focus areas. So on the one hand, I think we will consolidate over the success we had over the last 3 years. On the other hand, I think we'll make further progress in other areas so that I think we can climb another peak in the next 5 years. So that's briefly our time history.

So first of all, I would like to spend a little bit of time to sum up the last 3 years, 2023 to 2025. And our philosophy by the leadership team is very simple. Everything starts with our team because we believe happy team will lead to happy customers and happy customer would then lead to profitable business. This is our leadership philosophy. And therefore, in the last 3 years, we've spent a lot of time engaging with our team, listening to their concerns and then put out concrete actions to act on their concerns.

As you can see, we use one very important indicator to measure our morale and sentiment, which is team Net Promoter Score. And over the last 3 years, we have moved from the negative zone in 2023, gradually climb up to the positive zone, and then we ended 2025 at a historical high when it comes to our morale and sentiment. And the same has been sustained, by the way, into 2026. I would say whether it's our pilot cabin crew, our frontline ground employees or office-based employees across all groups, we've seen major uptick in terms of team Promoter Score. Very happy to see that.

And with happy team, we've also seen uptick on our customers' satisfaction. We use, again, a very simple overall indicator, which is customer Net Promoter Score to measure our customer satisfaction. We've made progress. We moved from positive 20-something to 30-something over the past few years. And each year, we have an uptick. But we're not satisfied with that. Actually, our target is to reach positive 40. We haven't quite done that. And as I mentioned, happy customer is the area we want to further elevate in the coming years.

Profitable business. This is not just for our shareholders. It is important that we maintain and achieve profitable business so that we can invest back into our own team as well as invest back into our customers. And from that perspective, I think we've done really, really well, 3 consecutive years of financial success consistently over the past 3 years.

From a consolidated profit angle, we make pretty much $10 billion on average in the last 3 years. And this is an unprecedented performance over a 3-year period. I think it's the high level of profit as well as the consistency of the profit. A golden measure we use to measure our financial success is return on capital employed. And also from that perspective, we have exceeded 10% for 3 consecutive years. In my 30 years career with Cathay, I've never seen this. And certainly, this is an unprecedented result as well from that perspective.

So to sum up, I think from a happy team and profitable business, it's probably the best ever achievement, and we need to sustain that. Customer -- happy customer front, we still have more work to do, although we have made great progress over the last 3 years, but we still want to elevate -- further elevate experience for our customers in the coming years.

In terms of we're building over the past 3 years, there's a quantitative perspective. There's also a qualitative perspective. Firstly, we're building quantitatively. We have built back our capacity in 2025 already. In fact, last year, 2025 was a record year when it comes to us launching new destination. Between Cathay Pacific and HK Express, we launched 20 new destinations as listed on this slide last year, and it was a record. And these new destinations has brought us to exceed 100 destinations worldwide at the end of last year.

And in terms of both passenger and cargo capacity by any measure, whether it's ASK, whether it's frequency, we have exceeded our pre-pandemic level already by end of last year. Equally important, we are to -- we build qualitatively as well. And we have been recognized over the past few years, in particular, in 2025 by many industry ranking and awards. On the Cathay Pacific front, we've been recognized by Skytrax as one of the top 3 airlines of the world. And in 2 specific categories, i.e., in-flight entertainment, as well as our economy class is being rated the world's best.

Cargo has been recognized by ATW in 2 times in the last 3 years as the Cargo Operator of the Year. So we are firmly a leading air cargo carrier of the world from a quality angle. And HK Express has been recognized by AirlineRatings last year as one of the top 5 low-cost carrier of the world. So we are very happy that across our 3 airlines, we've been recognized as one of the world leading ones. We won't stop there. I think our vision is very simple. We want whether it's Cathay Pacific, Cathay Cargo, HK Express to be the world's best. And we still have more work to do, but I think we are in a good position to build on.

Looking forward, the next 5 years, 2026 to 2030 will be another new era for the Cathay Group. And to guide our development in the next 5 years, among the leadership team, we have refreshed our strategy on the page, which will guide us forward in the next 5 years. As you can see, our strategy on the page comes in 3 languages, English, traditional Chinese and simplified Chinese. This is a reflection of our unique position, deep roots in Hong Kong, proudly part of China, connecting the world. We are Hong Kong. We are part of China, and we are very also very international. So this is our internally what we call a tripod position.

And our overall Cathay Group vision for the next 5 years is that we want to become our customers' most loved service brand. We are not just comparing ourselves with other airlines. We want to be able to compare us with any service brand that our customers get into touch with, and we want to be among their most loved service brand.

And across the 4 lines of business, as I mentioned, in turn, we want to be the world's best. Cathay Pacific, we want to become the world's best premium airline. We are now world's top 3 already. And then Cathay Cargo, we want to keep it that way that we are the world's best air cargo carrier. For HK Express, our ambition is to become Asia's best LCC low-cost carrier. And for Cathay Lifestyle, we want to be the world's best premium travel lifestyle brand. Very ambitious target, but as shown in the last few years, we are making good progress, and we are on track in moving towards this vision in the coming years.

The leadership philosophy, I explained for the last 3 years will continue into the next 5 years. This philosophy has proven to be sound and practical. We will always focus on our team first. And once our team are motivated, happy, they will make our customers happy. Once the customers are happy, they're more willing to choose us over other choices they might have, which will lead to profitable business. And of course, within profitable business, we have work to do to make sure that we have the best revenue efficiency, we have the best cost efficiency, and that will continue to be the focus for the next 5 years.

A few highlights in terms of our development for the next few years, starting with our fleet. So this year, we'll be taking delivery of 8 aircraft, and they are all belonging to the narrow-body family, A320 and A321neo. And then in the coming years from 2027, we'll be taking quite a few more such aircraft. And then in 2027, around second half of next year, we'll be taking delivery of our new generation long-haul fleet, 777-9 will finally arrive, and it will also come with our new generation first-class products on that new fleet.

So with the new fleet, we will continue to expand to more long-haul destination and more long-haul frequencies from second half of next year. And then come 2028, we'll take delivery both on the freighter side as well as the regional wide-body side. So freighter will be taking our first A350 freighter from 2028. And then our first A330-900, also known as A330neo aircraft will also arrive in 2028. Altogether, we have more than 100 new generation aircraft coming our way in the coming years. This is part of our HKD 100 billion investments into the future.

A majority of our investment will be spent on our fleet, modernizing our fleet. Not only that, we'll continue to upgrade our cabin products, which are very important to our customers. So already starting last year, we have been rolling out new cabin products on our 777-300ER with the now world-famous Aria Suite, new business class products as well as our new generation premium economy class products on our 777-300ER fleet. Currently, we have 14 of such aircraft retrofitted. And altogether, we will have 35 of them. So there will be more retrofitted aircraft coming out this year and next year on our 777.

Later this year, we have another hero product, which will be for our regional fleet. A330-300, also known as A330ceo aircraft will be equipped with brand-new business class as well. We are calling it Aria Studio. This is a sister product to Aria Suite. And this is a lie-flat business class seat for our regional fleet. Also, each seat would have direct aisle access because it will be in a 121 configuration. So our customers will be -- will find it very convenient that each seat will be given aisle access. So we'll continue to roll out throughout the next 2 years, starting end of this year, we'll see the first of such retrofitted aircraft.

And then next year, as I mentioned, the hero product is our 777-9 first-class cabin. We'll be introducing our new generation first-class cabin for coming with the 777-9 in the second half of next year. So each year, I think we are rolling out a new set of cabin products on different fleet. On the ground, we will continue to upgrade our lounges worldwide. And starting with Hong Kong, the Wing first lounge has been under renovation for quite a few months, and I'm glad to share that we're going to reopen very soon, in April is the plan that we'll open this lounge.

And this will be our new generation first-class lounge that our members and customers would have been looking forward to. So I'm also very excited to see the new lounge myself. Later this year, for the first time ever, we'll be having our own Cathay Pacific flagship lounge in New York JFK Airport for the first time. Again, a very exciting project that I look forward to experiencing the new lounge by myself. On the cargo front, our strategy is to provide value that other providers cannot match. Our tagline is that we know how. We ride on our expertise in shipping special shipments for our customers, whether they are time sensitive, temperature-sensitive or handling sensitive, we are the expert.

Cathay Cargo has been recognized as the expert within the industry in handling such kind of special cargo that requires special skill arrangement. We also want to excel on our digital leadership for Cathay Cargo. There are different initiatives to improve customer experience, operational efficiency using digital technology within cargo.

Our lifestyle business will continue to focus on 2 areas: our mileage sales business as well as product sales. Our mileage sales, Asia Miles currency has been very popular in Hong Kong and in Taiwan, for example. And our focus moving forward is to strengthen Asia Miles presence in the Chinese Mainland, in particular, the Greater Bay Area cities.

On the product business side, we will focus on Cathay Shop, Cathay Holiday as 2 very important pillar. So taking the chance of the 80th anniversary, we'll be launching many special edition Cathay branded merchandise. So I think some of you would have seen it outside on display. So a very exciting year for us.

So speaking of 80th anniversary, I have a short video to share with you, which feature our special livery aircraft, what we call lettuce leaf sandwich aircraft. We have 2 of such aircraft, one on the passenger side using our A350 aircraft and one on the cargo side using our 747 freighter. So enjoy the video.

[Presentation]

How many of you would have seen those 2 aircraft? No. Okay. You'll be lucky to see them because they've been flying busy flying through the world. And I think many, many pictures and social media posts have been created because of them over the last 2 months. And not only that, those 2 aircraft are more looking back, right, to celebrate our heritage and history. This Monday, we've unveiled a more future-looking aircraft with what we call the Spirit of Hong Kong with a special Hong Kong artist design artwork on this plane. And it's been flying across the world to promote Hong Kong arts and culture as well as the Spirit of Hong Kong.

And this one is the fifth generation Spirit of Hong Kong aircraft already. The first one we introduced back in 1997 during the handover. And then since then, this is the fifth generation.

Starting March, we are also launching Vintage Uniform Show on our aircraft. So chances are when you take our flights this month onwards until end of the year, you will spot some of our cabin crew in vintage uniform. And also across the airport, we will have some of our frontline employees wearing this vintage uniform from the past many decades. Last, but not the least, as I mentioned, on the lifestyle side, we are also launching many new and creative Cathay branded merchandise to celebrate 80th anniversary. So that concludes my presentation, and let me pass the time to our CFO, Rebecca, to walk you through the numbers. Thank you.

Thank you, Ronald, and good afternoon, everyone. I have to say, I was remembering that the very first analyst briefing I did, I was talking about double-digit losses. So it's really exciting to me today to be talking for the first time about double-digit profits. So -- and as Ronald has explained, off the back of 3 consecutive profitable years.

So as normal, I will follow a similar presentation that we've done before. I'll talk a bit about the financial highlights and then something about the -- some of the key business statistics, more of the operational statistics and then a bit about outlook to wrap up before we move to Q&A with Ronald and myself. So let's get started.

This slide, you will be familiar with it. We've got some of the key 6 sort of top numbers that we refer to. I will cover some of these through the course of the presentation. So the one I just want to draw attention to here is around our revenue. So at GBP 116.8 million, almost GBP 117 billion, fascinating fact for you. This is the highest revenue number we've ever generated in our 80-year history. So this was a real milestone for us in 2025.

This slide covers the consolidated profit, but we split it out at a number of levels. So you can see some of the buildup. And looking back over the 3 years to 2025. You can see there we had a small nonrecurring item in there, which is an impairment provision on some fixed assets in our subsidiaries that we've been able to write back based on the better performance. And the other line that you can see that doesn't feature on other slides is the improvement in the associates line. So that also improved to contribute to our bottom line number of HKD 10.8 billion for the year.

This chart is a map of the 2024 consolidated number at HKD 9.9 billion and how we get to the consolidated number for 2025. And of course, the big drivers you can see on here are the key things that affected our 2025 number. The story effectively of much higher capacity. So you'll see a bit more detail later, but around 26% increase in capacity, and that drove the big green bar there in terms of revenue, but also the larger red bar further to the right because, of course, we incurred greater costs in order to support this higher operations.

But equally, the other big element in there is the yields going down. As we expected, we talked about this back in August. We expected yields to continue to normalize, and they did. That was an impact of about 10% over the course of the full year. Fuel, this is a bit of a hot topic at the moment. I'm sure you'll have questions for us on this later. But our fuel costs increased, of course, because we increased the capacity during the course of the year. But that was offset because actually, to some degree, because the fuel price last year for whole '25 was actually around 9% less than it was in 2024.

So we got the benefit of a lower fuel price, but of course, higher fuel costs because we're operating greater capacity. But maybe at this point, you can see on the right-hand side, the chart where we set out our hedging. So I think you're all familiar with the fact that we hedge our fuel. And so you can see that for 2026, we've got about 30% of our fuel hedged at around or just under $70 a barrel. This is hedged on crude oil -- crude oil hedges rather than jet fuel.

And maybe just to talk about jet fuel briefly because, of course, that is the large number or the elephant in the room perhaps. I think on average, since the conflict in the Middle East started, the jet fuel price has been around USD 167. Now if I look at that compared to the average jet fuel price for January and February, it's almost double. So you can see the step change that we've seen in jet fuel just over the last sort of 10 days.

It's a dramatic increase. And so our hedging is on crude oil rather than jet fuel. And therefore, whilst we do have some protection from that hedging, obviously, it's not protecting against the jet fuel price in totality because that refiners difference or the cost of getting the fuel from crude to jet, the refinery is charging a huge amount, the crack spread, and that is significant at the moment.

Our fuel hedging policy, though, does stay in place. We're continuing to be operate it the same way as we have done for the past number of years during 2025, and it remains in place today. I know that's another question you always ask me, so I'll answer it now.

In terms of costs overall, this slide is setting out our cost per ATK, you can see including and excluding fuel, of course, our costs, the chart on the left, you can see them going up because we have increased our capacity. But the trend as a result of economies of scale is our cost per ATK coming down. So it was around 2.4% reduction if I exclude fuel between 2024 and 2025. So again, that we talked about that, I think, previously, that was as expected.

Financing, of course, this is a key number for us, too. Chart on the left is telling you what the total cost of our financing was or a net number. And you can see that in 2025, that was a similar level to 2023. And the reason for that going down was a combination of 2 factors. Of course, we saw the interest rates start to go down in 2025. But also, we -- off the back of generating profits in '23, '24, we were able to pay off some of the debt that we had, and therefore, we're not borrowing at such high levels. And therefore, that brings our financing charges down, of course.

Chart on the right shows you the split between our borrowings in terms of fixed versus floating. And you can see, I think I've talked about this before as well. We typically try to have around 50% in terms of fixed versus floating. We hover sort of around that number. You can see it was 48% versus 52% for 2025. And that strong profit position, you can see it drove into the cash flow numbers.

So this slide is mapping our liquidity at the end of 2024, around HKD 19 billion and mapping it through to the HKD 25.4 billion that we had at the end of 2025. And the big green bar that you can see, of course, is the cash generation from our operations. We were able, therefore, to use it to invest. So some of the products that Ronald was talking about earlier, the aircraft, obviously, you have to pay some money upfront for some of those. We're starting to make investments, so around HKD 9 billion spend there. And we were also able to repay some of our financing as a result of the cash generation.

Some funding, we refinanced. You can see new financing coming in, some we repaid, and we ended up with a balance of HKD 25.4 billion at the end of the year. Now you might say to me that's quite a big difference from the number at the start of the year, and that is shown on here, too. The reason for that, I'm sure you're all aware that we bought back the Qatar shareholding last month completed, and that cost us around HKD 7 billion. And so towards the end of last year, we were building up funds to be able to fund that buyback. So hence, the number at the end of 2025 was somewhat elevated as a result.

At the end of February, of course, it came down because we paid for it. The other thing you can see on this chart is our gearing number, and that was down to 0.6 at the end of last year. So a healthy position. And the other thing this reflects too is the debt level. So you can see also, as I mentioned earlier, that has come down too.

One of the elements of that, you may remember the end of 2024, we bought back a large portion, around 68% of the convertible bond. The remainder of that bond, around 2.1 billion was converted during the course of 2025. So it moved out of our debt balance and into our share capital and hence, brought the debt balance down too.

Finally, on this section, I haven't talked about it yet, I should have done this at the start, the dividend. So the second interim dividend that we've announced today of HKD 0.64. So added to the HKD 0.20 we paid in October, made a total -- or makes a total HKD 0.84 dividend per share.

You can see here, and as we mentioned the slide, although it's small writing, so you probably can't read it. But our policy is to pay approximately 50% of our profit after tax, adjusting for exceptional noncash items and of course, taking into account the environment at the time. But yes, we've announced today a second interim dividend of HKD 0.64 per share. And of course, that's a little bit higher because following the buyback, there's less shares in circulation. So the 50% number has a bit further to or more on a per share basis. So that's a very quick sort of wrap-up of the financial numbers.

If I move perhaps more into the business elements, in terms of Cathay Pacific, this is our premium travel airline. This slide sets out the key statistics. So here, you can see the story that I mentioned earlier in terms of our revenue has gone up by almost 16%, but capacity went up by 26%. And so that's where you see the impact coming through on the yield going down by the 10% as those 2 parts of the equation intersect.

So we continue to add more passenger flights and destinations as we grew that capacity. And the other thing that was slightly stronger in 2025 compared to 2024 was the load factors. And you can see those more clearly on this page. So they're in the middle chart. You can see that progressive increase over the last 4 halves of our load factors continuing up.

So this chart is trying to show you by each half of 2024 and 2025, the numbers in terms of capacity, load factor and yield, as I say, load factor, you can see that upward trajectory; capacity, of course, you all know, we've been gradually increasing that over the past 2 years; and yield on the other side, again, we've talked about it a lot, the normalization of yield. The slightly interesting thing in 2025 was the second half yield managed to stay at a similar level to the first half. So you can see that sort of tailing off of the yield normalization.

Moving on to Cathay Cargo, our second line of business. Again, the same slide as I've got for the premium travel. We've got the cargo revenue at a very similar level to the level it was in 2024. Their capacity went up too, not by as much as the passenger side of the business, but the reason for the capacity increase in cargo is the bellies of our passenger planes. There was not additional capacity on the freighters, but it was in the bellies of our passenger planes. They also saw some yield normalization, but not to such a strong or a large amount is on the passenger side of the business. And their load factors stayed very similar year-on-year.

And then this, again, the same chart as we had for the travel business. You can see each half year numbers are somewhat different to the passenger part of the business. But -- so you can see that sort of steady load factor across the 2 years. Yield, first half, second half, we see that the second half was stronger. And the big difference in the capacity first half, second half for 2025 was in the first half of the year, we had some of our freighters for extended maintenance. So we didn't have quite as much capacity on the freighters themselves flying. But that was back available in the second half of 2025, and you can see that coming through there.

I remember that we talked in August about what was the sort of peak going to be like for the cargo business because we often talk about the fact that the second half of the year for cargo, you have a sort of peak in Q4 as you get to Q4. And we wondered whether because of the sort of tariff situation and everybody was wondering is all the cargo being pulled forward in order because people were sort of stocking up, would there be a peak at the same level? I would say the cargo peak for Cathay Cargo was a strong peak in Q4 of last year.

Then our lifestyle business, I won't touch on that. Ronald has elaborated earlier. Moving on to HK Express. So this is our fourth line of business. Now their capacity dramatically increased again last year, more than 30% during the course of the year. And you remember the prior year, it already increased by around 46%. So they've had a really strong capacity increase over the past couple of years. They launched more destinations. I think they're flying to around 37 by the end of last year and operating around 44 aircraft at the end of the year.

In terms of the numbers, you'll have read in the announcement, I'm sure that they were loss-making in 2025. There you can see that capacity increase of nearly 32%, but the revenue only goes up by 7%, impacted by yield going down and load factor going down. And they were affected by a number of things, but the most significant, and again, we did talk about this in August was the changes in customer preference.

So you remember, we talked quite a lot about Japan back in the summer with the earthquake rumor. And although that sounds a bit sort of unusual perhaps, but it had a big impact on the demand for our flights to Japan on HK Express in July and August, particularly. So that, of course, came through in our second half number.

The other thing is they're increasing their capacity and they're adding new destinations. Some of these are destinations that we've not flown to before. There's not been an airline to fly between Hong Kong and that destination. So these new destinations take time to mature. So we are making a bit of an investment in raising awareness and creating new destinations, and that will take some time to mature.

Then the industry-wide Pratt & Whitney issue continues on. I think we had about 5 aircraft on ground of HK Express during the course of last year, which is similar to the previous year as the Pratt & Whitney engines are not able to be repaired as yet. So that will continue on. But although these numbers perhaps look a bit negative, shall we say, I have to say the fundamentals of HK Express continue to improve. So things like their utilization of aircraft continue to go up. Their cost efficiencies are continuing to improve. Their on-time performance is strong.

So from a sort of business from a group perspective, we are confident in their future trajectory, and we do see a path to profitability for them off the back of these strong fundamentals. In terms of sustainability, just to briefly finish off on this section, you know this is important to us. It's one of our key areas of focus in terms of sustainability leadership for the group as a whole.

Our sustainability report will be published next month alongside our annual report. There's lots and lots of interesting information and facts for you in there to help you with your analysis. The 2 key areas for focus, as we've talked about before, our climate change and the circular economy. Climate change because, of course, this is financially material to us as a group, circular economy because this is very important to our customers.

We have lots of initiatives underway in both these areas. If you've been on some of our flights, maybe you've heard our cabin crew asking to collect the plastic bottles back. So we've got lots of different things in order to remote development and improvements in both of these areas. But as I've said before, this is a challenge for the aviation sector, and it does need many stakeholders to get involved in order to work our way through this particular challenge.

The last but not least, outlook. The first thing I was just going to briefly touch on, and this slide is more for your sort of later reference. You've probably read it in the press statements, et cetera, our share buyback from Qatar Airways that we completed late last month.

As I said before, some of the information in these slides is for your easy reference. I don't talk to every single bullet point on them. But yes, this was a good outcome in terms of Qatar asking us if we're interested to buy their shares back and us deciding that this was a way to have an orderly exit for them as an organization. And of course, it has improved our earnings per share and the dividend per share as well. But that happened post year-end.

In terms of our outlook for our passenger businesses. So we're confident in 2026, subject to Middle East geopolitical challenges at the moment, but we're expecting to grow our passenger capacity by around 10% for the year. So this, of course, is quite a bit less than the last couple of years. But we -- as Ronald already mentioned earlier, we're back to 100% capacity. So this is sort of moving us beyond that.

We do see various challenges. Of course, the supply chain continues to be challenged, whether it's new aircraft deliveries, whether it's parts for maintenance. That still does have challenges, and we anticipate they will continue. We've got lots of processes and procedures in place to try and mitigate the impact, but it is something that should be flagged as a risk for us going forward. And of course, it goes without saying the current Middle East conflict is a part of sort of some huge level of uncertainty and volatility at the moment and how that plays out is really hard to assess at the moment.

In terms of cargo, similar. The cargo flows, again, hard to predict or project. But as Ronald talked to earlier, our specializations give us some advantages in certain areas and our ability to be flexible with our network to move where the demand is coming from has enabled us to have a solid performance in cargo in 2025. And we also have the 6 freighter aircraft delivering in the future. Until then, their increase in capacity on the cargo side will come -- continue to come from the increased capacity on the passenger aircraft.

So to wrap up before we -- I pass over to Andy to questions. We've had 3 solid -- or 3 consecutive solid years of financial performance, which on the back of that has enabled us to strengthen our balance sheet. We've been able to buy back shares. We've been able to reward our people. We've been able to commit to investing HKD 100 billion in aircraft, in product, et cetera, for our customers, for Hong Kong. We've been able to pay dividends as a result as well.

So as we look forward into 2026, we're confident this year with a 10% capacity. I'm caveating that based on the current world situation. But generally, we're confident with our 10% capacity projection for the rest of the year. And of course, also, as Ronald said, 2026 is a very special year for us. It's our 80th anniversary, and we'll be holding all sorts of exciting events through the course of the year to mark the 8 decades that we've grown in Hong Kong and to celebrate our unique position as being deeply rooted in Hong Kong, proudly part of China and connecting us to the world. With that, I will hand on to Q&A.

Good afternoon. Welcome to the Cathay Group 2025 Interim Results Analyst Briefing. My name is Andy Wong, General Manager, Corporate Affairs for Cathay. Whether you're attending here in person or online, it is a pleasure to see you all here, and thank you for joining us.

Introducing our speakers for today, Chief Customer and Commercial Officer, Ms. Lavinia Lau; Chief Financial Officer, Ms. Rebecca Sharpe. We'll begin the presentation by Lavinia and Rebecca, after which we'll open the floor to questions. In case you haven't scanned the QR code at the reception desk, for an electronic copy of the presentation slide, a copy is available after the session for download.

So without further ado, let me invite Lavinia to start the presentations. Thank you.

Okay. Good afternoon, everyone. Hi, I'm Lavinia. So I think I'll just spend a few minutes to share our group strategy before passing on to Rebecca to talk about the very important part, our first half performance.

So in terms of our group strategy, well, we as a group, we continue to grow both quantitatively and qualitatively. From a quantitative angle, I think June marks a very important milestone for us because that is when the group actually reached 100 destinations. Actually, by now, I think we are flying to 104 destinations already since we also just launched Brussels just on a Monday.

Between the 2 groups, we have already launched or announced 19 new destinations for this year. So if you look at the split, actually, they are, well, pretty widely spread throughout globally, so with Cathay Pacific going to long-haul destinations like Dallas and 3 new destinations in Europe, and for the HK Express side, continue to expand their footprint in the region.

But I think it's also important to note that apart from growing our breadth, we're also growing our depth in our network. I think this year, we are adding a lot of new frequencies, particularly on the Cathay Pacific side. If you look at just this summer on the long-haul network, which everyone is very interested about, just on North America, we are increasing our number of flights by 50%, 5-0, and in Europe, 3-0, 30%, and Southwest Pacific, 25%. So we are -- so a lot of people are interested in new destinations, but I have to say that we are also adding a lot of frequencies on our existing trunk routes, which are very important in our network.

So of course, to fly to this increasing expanded network, we need to have more aircraft. And I'm sure that you have already read the news of today. So apart from announcing our interim results, the very -- other very exciting news that we have just announced is our new order of 777-9. So we already have 20 aircraft of such Boeing aircraft in our order. And now we are exercising our purchase right to add on another 14, so making the fleet size a total of 35 for this particular fleet.

So the 777-9 will be our flagship fleet. The aircraft that will arrive starting from 2027, at least 2027, '28, the initial aircraft, they will be 4-cabin aircraft equipped with our new flagship first class. But eventually, this will be a mixed fleet, so consisting of aircraft both with 4 cabin and 3 cabins. And this will be our new flagship fleet with a lot of new products -- new cabin products to look forward to.

Then apart from this very exciting announcement, the other of our aircraft orders you know about. So altogether, we will have over 100 aircraft coming to join our fleet in the coming years, ranging from narrow-body, regional wide-body, long-haul wide-body and freighters. So next year, well, these 2 years, actually, our focus will be on taking delivery of our narrow-body aircraft, both for Cathay Pacific and HK Express. And then starting from 2028, then our regional wide-body, the A330neos will start to come in, and obviously, from 2027, also the 777-9, the 4-cabin one will start to come in as well. So all these new aircraft will continue to help us expand our footprint globally.

Apart from going quantitatively, of course, we continue to ensure that we offer the best customer experience and provide value so that they can continue to get on our aircraft. So I'm also very pleased to say that qualitatively, so far this year, we have already been winning quite a number of very significant industry awards. So at Cathay Pacific, if you know Skytrax, that's the main industry award, so this year, we have gone back into top 3. And then we also win the best economy-class cabin and best in-flight entertainment. On the cargo side, we also win a very important award from ATW, Cargo Carrier of the Year. And then even our little sibling, HK Express, has started to get recognition in some of the industry awards as well. So I think this is all a very good motivation for us to keep improving our service and enhancing the customer experience.

On the Cathay Pacific side, well, including the 777-9 new order that we are making, we will be making well over $100 billion of an investment in Hong Kong, our international aviation hub. So apart from fleet, which makes up the bulk of that investment, we will continue to also invest in new cabin products and new ground products. So in the air, I think these are -- you should -- may already be quite familiar with some of these. On the 777-300ER, so we have been rolling out our award-winning Aria Suite. Currently, we already have 7 of our aircraft equipped with this new product. And over the coming, well, 20, 24 months, we'll almost have one aircraft being rolled out with this particular product every month.

And so this will continue to be deployed on our long-haul routes. Currently, we already have one daily flight each of London, Vancouver, Sydney and Melbourne being operated with this new aircraft, and it will continue to be rolled out on more of our new long-haul routes.

And then starting end of next year on our current A330 regional aircraft, we will also be doing some upgrading, retrofittings throughout the entire aircraft. Particularly, we will be equipping them with flatbed business-class products. But even before that, on some of our other existing 330 and 777 regional aircraft, we're also giving them a refresh. So if you have flown recently on them, you will see that they now come in new coverage, new colors, I mean, mimicking more of the other aircraft cabin products that we have. So that is a refresh before we actually go into the retrofit for the rest of the 330 with the new cabin products I described.

And then of course, last but not least, we have always talked about flagship fleet, 777-9. So according to the latest delivery schedule, they will start coming into our fleet in early part of 2027.

And then in terms of ground products, lounges are very important for our members, for our premium customers. So we'll continue to invest in these very important signature flagship lounges of ours. Starting earlier this year, we have already embarked on a program to actually upgrade all our existing lounges in the Hong Kong International Airport. We have closed The Wing first already. In place, we have reopened The Bridge, which is our new proposition with really a new redesigned bridge, so to speak. So this will be the first part of our HKIA lounge renovation programs.

Then also in the outports, we continue to have our own flagship lounges in strategic ports, which are of high value to our customers. So actually, next week, in Beijing, we will be reopening our flagship lounge in here. As you know, Beijing is a very strategic route with a lot of VIPs and premium customers traveling. So I think this lounge will be very welcomed by them.

And then next year, early next year, we'll be also opening for the first time our own flagship lounge in New York as well. Again, New York is a very business-heavy route, so I'm sure that this will also be very welcomed by our corporate travelers.

Apart from the travel side, of course, our different lines of business will continue to receive our investment focus as well. On the cargo side, I'm sure that during the Q&A, there will be a lot of questions and discussion on the outlook, but apart from handling or tackling the short-term challenges given the tariff situation and all the geopolitical issues, I think we are not forgetting that we will need to -- our commitment to invest long term on the cargo business will continue. Well, particularly, we have been, over the past few years, trying to really differentiate ourselves from other cargo operators by apart from carrying general cargo, we are moving into more specialized cargo solutions, which will give us a higher premium and, again, more value for our customers.

So some examples here. Well, last year, we carried pandas, so our whole live animal solution. And recently, we have been carrying, well, actually terracotta warriors from Chinese Mainland down to Australia. So all these valuable goods need special expertise.

And apart from cargo solutions, we also continue to invest in our whole customer experience, particularly the digitalization process so as to allow our customers to be able to deal with us or have business with us in a more convenient manner.

So I think over the -- by continuing to invest in these will help us to, over the long term, again, build up our position to really be a premium cargo carrier and differentiate from others.

Well, last but not least, we do have a non-air line of business within our group portfolio. So our Lifestyle business, although it's relatively small compared to the other streams, but it will continue to be a good complement and supplement to our other 3 lines of business.

So within our Lifestyle business, more familiar to everyone of you will be our Asia Miles business. So in that side of the mileage business, we continue to have a lot of, well, partnerships. Particularly on the payment side, our own co-brand cards and all our partnerships with other conversion cards have been performing very well so far.

And in the product side, the non-mileage side, we'll continue also to invest in our other business. For example, our Cathay Shop, before you come in, you should have seen some of our products that we are promoting in there, and also Cathay Holidays. I think these are really business which can allow us to tap into our very good membership base and allow us to really tap into more of their wallet share as well.

So all in all, I think, well, we have a very robust business or robust strategy for our different lines of business, which will help propel us forward.

So on to -- I'll pass it on to Rebecca who will then talk you through some of the -- really the highlights of our first half performance.

Thank you, Lavinia.

Thank you, Lavinia, and good afternoon, everybody. Oh, I've forgotten my clicker. That would help me. That's not a good start, is it? Oh, I can use this one. Thank you.

So moving or changing tack rather, Lavinia has talked to us and given you a bit of insight and flavor on our strategy. I'm going to take us back to the numbers. And as I talk about this, probably if I was to capture it in one short sentence or 3 elements, our first half result is solid, and it has been driven by 3 key elements: passenger volumes increasing, a solid performance from -- or consistent performance from our cargo business and a lower fuel price. And so that's what's helped us to deliver a third consecutive profitable first half. So it's great to be standing here talking about that today.

This slide captures 6 of our key financial metrics. I won't talk through all of them, and I do intend to try and go relatively quickly through the slides in general to give you time for questions. But maybe just to touch on a couple of these at the moment, revenue, starting there. So our revenue in the first half of this year compared to the first half of last year has gone up by 9.5%. And as I say, this is primarily driven by the increasing passenger volumes, increasing capacity in our Cathay Pacific business. That has contributed to the group attributable profit of $3.7 billion for the first half, very similar to the first half of 2024, which is $3.6 billion.

Now off the back of this, we've been able to announce today a $0.20 dividend as our first interim dividend for the 2025 full year. And again, that is the same as the first interim dividend we announced this time last year. And our earnings per ordinary share have increased by just over 8% in the first half this year. You may remember, although I think I have forgotten to some degree, but last year at this time, we had preferred shareholders. So we still had $9.5 billion of preference shares. So that distorted the earnings per share number, which is driving some of the difference.

So then if I move on to focusing on the profit. This slide just sets out the different profit numbers and shows you any one-off nonrecurring items and also the impact of our losses from associates. So the thing I was just going to point out on this is the losses we take into our books in the first half of this year for -- from our associates has gone down in the first half. So that's moving in the right direction. Overall, the bottom line, $3.7 billion.

So then this chart is trying to show you the key drivers. So we're mapping here the first half of 2024 through to the first half of 2025. And it's quite stark there. You can see what I was referring to earlier. The green bar, which is a positive bar, of course, is the revenue increase driven by the volume, the increased capacity. But of course, with that increased volume and capacity come increased costs. So the red bar further across on the slide, I'll come back to the other big red bar, the one halfway across is the cost of operating that greater capacity.

Now interestingly, the little red bar you can see there next to the large one for the operating cost is fuel. So of course, with the increase in capacity we're operating, fuel has gone up as well in terms of how much we've consumed. But because of the lower fuel price in the first half, that has been very beneficial to our numbers in terms of the cost of operating that extra capacity.

But -- and this is in line with what we said when I stood here back in March. The yields are continuing to normalize. And so the red bar you see there, again, reasonably significant, is the impact of the yields of our business coming down as expected. So suffice to say, although the bottom line number is very similar to the number we presented last year, the components within it are somewhat different.

Now fuel, I touched on that already. This chart, the table at the top tells you the total spend on fuel if you look at that bold line in the center. And you can see there in terms of total fuel spend has gone up by 3%. But of course, given the 26% capacity increase we've seen, that's quite a small percentage for that number to increase by. And the line below on that table shows why. So in terms of our interfuel cost, that has come down by 13%.

The line below that reflects our consumption per ATK in terms of fuel. And I know I had a question about that this time back in March when I stood here before, and that has gone up again a little bit as it did last time when we were talking. The reason for that is as we utilize our older aircraft more, they are not quite so fuel-efficient as our newer aircraft, and therefore, our consumption is increasing in terms of fuel.

Now the chart on the bottom left, of course, reflects the jet fuel price over the last 18 months. And I think what I quite like about this chart is the 6 months from January 2025 shows the pure roller coaster that we've been on with the fuel price and therefore why we would be continuing to hedge fuel. So again, another question that I always get is, are you continuing with your fuel hedging policy? And the answer is yes. Our fuel hedging policy remains unchanged, and we continue to hedge a portion of our fuel to help us mitigate that volatility that we see in the jet fuel price.

The chart then on the right sets out the fuel hedging that we had in place as at 30th of June. So you can see if I look 12 months forward, we've got just under 30% of our fuel hedged. And the red line on that chart is the strike price, the price it's been hedged at. So you can see progressively coming down because we typically will hedge for up to 2 years but at differing percentages based on our forecast consumption and based on the fuel price at the time.

Moving on from fuel. Of course, that's a big cost component. But if I look at the trend in our overall unit costs, so as we're continuing to grow our capacity, our unit costs continue to come down. So this chart is showing '23 full year, '24 full year and the first 6 months of this year. And probably, I should draw your attention to the darker green bars on this chart because they exclude fuel. Fuel is always going to distort our unit costs. So you can see that on that chart, the fuel cost -- sorry, excluding the fuel costs, the unit cost is continuing to come down as we increase our capacity.

Financing charges, very similar this first half compared to last first half. And then in terms of our interest rate profile, at the end of June, we had 60% of our financing on floating rates and the balance of 40% on fixed rates.

So then if I do move on to talking about cash, we have strong operating cash performance again in the first half of this year. And what this chart is doing is mapping the balance we had in liquidity at the start of the year to where -- what we had at the end of June. And just a reminder, liquidity is our cash that we have on hand and also the committed funds we have access to. So you can see the different elements. We split it into the operating activities and the financing activities. And that green bar of cash generation, the $11.9 billion actually is very, very similar to the first half of last year. I think the same green bar was $12.1 billion, so very similar.

Now that strong cash generation has enabled us to do a number of things. Obviously, the smaller red bar in the center is what we've invested in. You heard Lavinia earlier talking about the Aria Suite. There's some spend in that $3.8 million (sic) [ $3.8 billion ] that is going on the Aria Suite that I hope a number of you have had the opportunity to fly and you'll then be able to tell me that was a great investment. But it's not just that, it's also a number of other things, but just as an example, I quote that.

In terms of the financing activities, one of the other things that the strong cash performance has enabled us to do is to repay some financing early. So there's a small amount of financing that we have repaid ahead of time in order to save some interest costs. The other elements of financing are generally relatively routine in terms of loans expiring and leases expiring and being renewed.

And last but definitely not least, the dividend. We announced the second interim dividend for 2024. We paid that in May. So that appears in our cash flow statement for the first half. And then we did take on a bit more committed facilities, the green bar at the end in order to have a little bit more liquidity around us given the uncertain economic environment that we find ourselves in at the moment.

So turning to liquidity specifically. The chart on the left shows that liquidity balance for a year ago for December and now. And you may be wondering, why did we have $25.4 billion in liquidity at the end of June this time last year? But if you remember, we were building up cash in order to pay back the balance of the preference shares. So in July of 2024, we repaid the remaining $9.5 billion in preference shares. So in June, we did have a higher level of liquidity in place in order to be able to do that.

And then of course, we bought back preference shares and replaced some of that with debt. And that's why you see the big step change in gearing on the chart on the right, which has, in this first half of the year, come down a little bit as we've generated greater levels of cash.

So then if I transition from more financial figures to some of the slightly more operational figures for each of the lines of business that Lavinia was talking about earlier. Starting with Cathay Pacific, which, of course, is our premium airline. And here, we set out 5 of the key metrics for that business, all of them sort of looking positive, and that's partly reflecting what Lavinia was talking about in terms of the addition of destinations and frequencies. We can see that coming through in higher revenue numbers, in higher available seat kilometers, more passengers carried and also in load factor.

And equally, we can see the passenger yield number coming down as we expected. As you've got more supply coming in, and we've always talked about sort of yield in terms of supply and demand, as we've got more supply coming into play, the demand is closer to supply, and therefore, yields start to come down.

If I dive a little bit more into capacity and load factor and yield, here, we're trying to show you the comparison of the last 18 months. And so you can see that capacity climbing across that 18-month period. The load factor is also climbing, staying reasonably robust during that period and the yield progressively reducing over that same period, as I say, as the supply and demand become closer to each other.

If I then turn to Cathay Cargo. Cathay Cargo has had a solid performance in this first half despite the challenges that have been thrown at us in the global economy. And we can see that coming through in their numbers. So their revenue didn't change that much, a little bit higher than it was this time last year. And just for your reference, the cargo revenue is approximately 20% in the first half of our total revenue as an organization. Think it's 20.5%. We've had more capacity also in cargo, and that's driven not by additional freighters but with the additional passenger planes that we operate. So passenger bellies of our passenger planes are what's adding capacity for the cargo business. And that has helped, of course, us carry more cargo in the first half.

Again, yield under pressure given the tariff situation and the sort of changing demand for cargo flows. The beauty of our network, our freighter network is that we can adjust the routes where we fly to to match more effectively with the demand, and that enables us to maintain the levels and the numbers that we see here.

Again, digging into -- similar to the Cathay Pacific business, digging into capacity, load factor and yield. The capacity chart on the left, you can see in the 2025 first half number how significantly higher than 2024 first half that capacity is. I think it's about an 8% increase. But you might be wondering, why is it less than the second half of 2024? And typically, of course, the second half of any year is stronger than first in cargo typically. But the main reason for that variance is because our freighters that have had base maintenance in the first half of this year, unfortunately, a number of them have been a bit delayed. So we've ended up with aircraft on ground longer than anticipated and therefore a bit less capacity available to us.

Load factors have stayed reasonably robust given the economic environment. You remember that typically, you've got much more demand on the flights going west than you have coming east, and that drives the load factor in cargo. And then yield, remaining reasonably solid despite the environment that we're operating in at the moment.

Lifestyle, I won't mention. Lavinia gave you a bit of flavor of the things we're doing there.

So if I then move on to our fourth line of business, HK Express. So you remember, this is a part of our dual-brand strategy where we have Cathay Pacific as the premium airline and HK Express as the low-cost carrier, looking to tackle 2 very different customer segments in support of that. And just sort of for your interest in terms of the capacity that we operate, if I look at ASKs as a measure, HK Express equates to about 11.5% of those ASK in the first half of the year.

Now we've got the same or very similar metrics for HK Express as I showed you for Cathay Cargo and Cathay Pacific. Unfortunately, more of these are in a red color than the other lines of business. But they have been facing some headwinds this first half, and those have resulted in revenue being pretty much the same as it was a year ago. They have generated a loss of $500 million approximately, but they continue to increase their capacity as we grow that part of the business. But equally, they -- or also they've had impact on load factor and passenger yield.

And I suppose the thing I would say about HK Express' first half is that they have seen quite differing demand in their traditional routes. So Japan for HK Express has been a very strong market for them. Unfortunately, given earthquake rumors, et cetera, the demand for flying to Japan has been significantly impacted by that in the first half. And therefore, that's had a knock-on effect to this business.

The other element is as we grow the business and add new destinations, they take time to mature. A number of them are sort of brand-new destinations for people to fly to from Hong Kong, takes a while to mature, and they then put a bit of pressure on our cost base.

The other element of this, in terms of sort of looking a bit further ahead, you might say to me, well, what's going to happen with this business? I think what we're seeing is the Japan market is starting to pick back up again. It's not at the normal levels that we saw pre-earthquake rumors, but it is starting to pick back up. I think the other thing is we see this as a long-term business for us. It's part of our dual-brand strategy.

If I look at the fundamentals of the business in terms of things like aircraft utilization, cost per ASK, those are trending in the right direction. So we can see through looking ahead a path to profitability for this business, albeit in the beginning with investing in new destinations, with challenges from certain external factors, we can see that short term, it does have its challenges.

And then last but definitely not least in this section before I move on to outlook is a little bit about sustainability. So I think you're all familiar with our ambitions in sustainability leadership. And you may remember, if you joined this presentation in March, that I talked about the 5 levers for airlines to get to net zero. Don't worry, I'm not going to talk about all 5 levers again this morning, but you may -- or this afternoon rather, but you may remember that they included things like new technology, so sort of hydrogen planes in the future. We talked about new aircraft deliveries. Of course, we've got a number of those that will drive efficiency in this space. Fuel operating efficiencies will also drive improvements here. And then, of course, you've got carbon offsets. But the biggest one for us and for all airlines to focus on is sustainable aviation fuel. And so we continue to work on that as one of our key pillars in this space.

And in the first half of this year, we've progressed a couple of things here. We signed an offtake agreement with SK Energy to upload some SAF in Incheon in Korea and also work with Sinopec to bring some SAF to Hong Kong International Airport. So we continue to make small steps of progress in this space.

Our second pillar in the Cathay Group is around the circular economy. Now we know that the sort of cabin waste, the single-use plastics in terms of our carbon footprint doesn't have a major impact. But to our customers, it does. It's very much what our customers see. And when we get customer feedback, this is a space that they want us to continue to improve.

So we continue to work on reducing our single-use plastics. For those of you who have flown with us and seen the newer amenity kit, you'll have noticed, I'm sure, there is far less single-use plastic in those kits. And also, you might have been on some of our flights when we're looking to collect the water bottles so that we can recycle them. We're trying to make small steps in this direction as well.

Now this is a hugely challenging area. Airlines can't do it alone. It's going to take quite a long time. It needs all stakeholders to come together to support us collectively moving towards net zero. So just a flavor for you of where we're at with that.

So finally, if I just talk a bit about outlook, which I'm sure all your questions will be about in a few minutes. So trying to start this off here. In terms of our passenger businesses, we see that demand will be robust, but there may be challenges on different routes subject to external factors. I already mentioned Japan. And that I'm sure will take time to recover based on what we've seen in this month so far. But overall, we think demand for travel is robust.

We will continue to add, Lavinia mentioned earlier, more destinations. We'll continue to add frequencies to different destinations. So sort of deepening our numbers of flights to different places but also adding different places. So we'll continue to be adding capacity into the network. And consequently, that will have impact on yields and traffic mix. So we're expecting some changes there.

And then of course, I couldn't get through a presentation sort of since COVID, I don't think, without talking about supply chain. The supply chain in our sector continues to be challenged. Parts supply, maintenance, et cetera, there are still challenges, the production line for new aircraft. These are still challenged in -- as the industry still continues to recover from COVID.

In terms of cargo, well, the word I would just say, cargo is uncertainty. And although uncertainty can be a bit of a scary thing, the thing I would say about our business is we have worked really hard to put in place the ability to navigate through this to be flexible. So when we see demand on certain routes changing, we can flex where our network goes. So we'll continue to work hard to adjust to the demand that we see out there in the market.

And in terms of the capacity itself in this space, with the increasing capacity on our passenger fleet, of course, the passenger bellies provide more capacity for cargo. And so there will continue to be an increase in capacity in cargo coming through our passenger fleet.

So in summary, I would say we've had a solid first half of 2025 driven by passenger volumes, the solid cargo, consistent cargo performance and a benefit from fuel prices. That's enabled us to pay or to announce rather a first interim dividend for 2025 of $0.20 per share. As Lavinia mentioned earlier, we got to 100 destinations in June, a very exciting milestone for us, but we're above that now, and we'll continue to grow the number of destinations but not just destinations, also the number of frequencies relatively significantly to North America, Europe, et cetera.

Then in terms of our fleet, we've got 4 narrow-body aircraft delivering in the second half of this year. They will be going to HK Express. And then with today's announcement of the exercise of 14 purchase rights, we will be taking delivery of more than 100 aircraft over the next few years. And that, of course, is a big part of our more than HKD 100 billion investment that we have committed to. And this demonstrates our confidence and our commitment to the Hong Kong international aviation hub and its success.

And aside from that and our commitment to the future, we believe that I'd be sort of naive to stand here and say the business environment is fine. There is lots of uncertainty in the environment. There's been uncertainty in the first half. I think that will be ongoing. But I can say that with the strong foundations we've put in place over the last few years, navigating these more challenging times when they arrive for all of our lines of business is not easy, but it's doable because of those strong foundations. So I believe that based on what we see around us and what the foundations we've put in place, we can see a path to continuing to grow a successful business into the future.

Thank you.