Reuters logo
Profits rise 6 percent at Li Ka-shing's CK Hutchison, beats forecast
March 22, 2017 / 9:07 AM / 7 months ago

Profits rise 6 percent at Li Ka-shing's CK Hutchison, beats forecast

HONG KONG (Reuters) - CK Hutchison Holdings Ltd (0001.HK), the ports-to-telecoms arm of billionaire businessman Li Ka-shing, beat forecasts on Wednesday with a 6 percent rise in 2016 net profit and said it was cautiously optimistic about the group’s prospects.

Hong Kong tycoon Li Ka-shing attends a news conference announcing CK Hutchison Holdings company results in Hong Kong, China March 22, 2017. REUTERS/Bobby Yip

Li has increased the pace of overseas acquisitions in recent years, which has helped lift group profits, with growth in its European telecoms business providing a significant boost despite the impact on the value of its British business from the country’s decision to leave the European Union.

Looking ahead, the outlook was uncertain due to the political changes but Li said whatever the impact it would be manageable and the group’s fundamentals remained solid.

“The impact of Brexit negotiations, new U.S. presidential policies and upcoming elections across Europe remain unknown and could affect the economic environment of countries in which the group operates,” he said in the results statement.

Net profits last year rose to HK$33.01 billion ($4.25 billion), ahead of the HK$32 billion average of 11 estimates given by analysts in a Reuters poll and up from the HK$31.17 billion made in 2015.

Total revenue fell 6 percent to HK$372.69 billion.

CK Hutchison has significant investments in Britain and elsewhere in the European Union.

Most recently its Hutchison 3G UK (Three) subsidiary agreed to buy fixed wireless Internet service provider UK Broadband for 300 million pounds ($370 million) from PCCW Ltd (0008.HK), which is controlled by Li’s son Richard.

Last year the European Commission blocked Hutchison’s deal to buy UK rival O2 UK from Spain’s Telefonica (TEF.MC) for 10.3 billion pounds due to competition concerns.

But in September it won EU approval to merge its Italian mobile business 3 Italia, with VimpelCom’s VIP.O Wind, after pledging to help French maverick Iliad SA (ILD.PA) bring new competition to the Italian market.

RETAIL

Hong Kong tycoon Li Ka-shing attends a news conference announcing CK Hutchison Holdings company results in Hong Kong, China March 22, 2017. REUTERS/Bobby Yip

Regarding CK Hutchison’s separate retail business division, Li said at a results news conference that the group did not plan to spin off the division in the next two years.

The division had more than 13,300 stores across 25 markets as of Dec. 31, 2016. Net additions for the year were 931 stores.

The retail division plans net openings of more than 1,000 stores in 2017, with 65 percent under the health and beauty format in mainland China and Asia, the company said.

Also on Wednesday, Li’s Cheung Kong Property Holdings Ltd (1113.HK) reported a 16 percent rise in 2016 full-year core profit due to a solid performance across the group’s property businesses.

Hong Kong property prices hit a record high in January despite government attempts to cool the market.

Li told the news conference he did not expect Hong Kong property prices to fall in the next one to two years.

Mainland Chinese developers have been aggressively bidding for land sold in the financial hub, and the buying frenzy is set to drive property prices up even further.

On the political front, Li spoke of his concerns of political tensions weighing on Hong Kong’s economy. He said that Hong Kong’s next leader that will be chosen on Sunday by a 1200-person election committee stacked with pro-Beijing loyalists, would be someone able to foster closer co-operation and communication with Beijing.

In a veiled reference to the turbulence seen over the past five years under unpopular and pro-Beijing leader Leung Chun-ying, including massive pro-democracy protests in 2014, Li said there couldn’t be a repeat of this period.

“If the new chief executive can have better communication as well as cooperation, and is trusted by the central government, there can be a miracle (to turn around Hong Kong),” Li added.

Li, however, declined to name which candidate he supported, with the frontrunners being former top officials John Tsang and Carrie Lam.

Reporting by Donny Kwok and Venus Wu, James Pomfret, Anne Marie Roantree; Editing by Greg Mahlich

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below