Cheung Kong Infrastructure Holdings

Mogul's flagship still hungry

PUBLISHED : Friday, 29 July, 2011, 12:00am
UPDATED : Friday, 29 July, 2011, 12:00am

Li Ka-shing's Cheung Kong Infrastructure Holdings (CKI), which has almost doubled its interim profit to HK$3.98 billion, is looking at more acquisition to maintain growth.

The billionaire's infrastructure flagship - which has a portfolio of electricity-distribution networks in Britain, Hong Kong, Australia and New Zealand, and gas and water suppliers in Britain - yesterday said it was 'assessing a number of new projects around the world'.

The British portfolio was the largest profit contributor to the group in the first half, generating HK$1.87 billion in profit, or 41 per cent of the total. The British holdings outperformed the group's Hong Kong electricity company Power Assets Holdings - formerly Hongkong Electric Holdings - which contributed HK$1.56 billion, or 34 per cent, of CKI's total profits.

Chairman Victor Li Tzar-kuoi said CKI's financial strength was enough to make offers for 'almost all emerging opportunities'.

Earlier this month CKI expanded its war chest, selling shares worth HK$3.4 billion, its first share placement since going public in 1996. That cut its net debt-to-equity ratio to less than 1 per cent. CKI had HK$5 billion in cash as of the end of last month.

Some analysts said the financial muscle would be handy if CKI's offer to take over British water-supply group Northumbrian Water materialised. CKI is conducting due diligence on Northumbrian after launching a GBP2.4 billion (HK$30 billion) bid two weeks ago.

An analyst with a US brokerage said CKI's interim results were 'surprisingly good' and that the proposed deal would boost CKI's growth further in the second half of the year.

In the first six months of this year, profit at CKI's UK portfolio jumped 770 per cent to HK$1.87 billion, boosted largely by UK Power Networks, which a CKI-led consortium bought from Electricite de France last October. The other consortium members include Power Assets and the Li Ka-shing Foundation.

CKI's power networks in Australia saw profit grow 35 per cent to HK$694 million in the first half.

The New Zealand portfolio, which distributes electricity in Wellington, did badly with a 32 per cent decline in profit to HK$26 million.

CKI realised a HK$110 million exchange gain in the first half, compared with an exchange loss of HK$76 million in the first half of last year.

The interim dividend was raised 11 per cent to 36.5 cents per share as earnings per share surged 96.66 per cent to HK$1.77. CKI shares jumped HK$1.45, or 3.36 per cent, to HK$44.60 yesterday.

Shares of Power Assets gained HK$2.45, or 4.02 per cent, to HK$63.30 yesterday, a day after announcing 47.3 per cent growth in first-half profits to HK$4.05 billion.