New | Li Ka-shing’s Power Assets posts lower profit after stake sale in Hong Kong unit

Power Assets Holdings, an international utilities firm controlled by tycoon Li Ka-shing, posted a net profit of HK$3.24 billion for the first six months of the year after booking a HK$532 million loss on a stake sale in its Hong Kong power unit.

Excluding the disposal loss, its underlying pre-tax profit would be HK$3.75 billion, flat compared with the HK$3.7 billion in the first half of last year, when a HK$52.93 billion gain was booked on the asset disposal from the separate listing of the unit, HK Electric Investments, early last year.

“The group remains in a strong cash position and will use those funds to actively seek suitable opportunities from around the world,” chairman Canning Fok Kin-ning said in a filing to Hong Kong’s stock exchange on Thursday. “We will continue to focus on high-quality investments in stable, well-regulated power and gas markets such as Australia, North America, the UK and continental Europe.”

Power Assets sold a 16.53 per cent stake in HK Electric last month to Qatar’s sovereign fund, while Cheung Kong Infrastructure (CKI), another firm controlled by Li, sold a 3.37 per cent stake in HK Electric to the fund. The sales reaped a total of HK$9.25 billion.

Power Assets’ stake in HK Electric, which faces the prospect of a further reduction in its permitted rate of return, was cut from 100 per cent to 33.4 per cent after the spin-off and stake sales.

CKI posted a net profit of HK$5.25 billion for the first half of the year on Thursday. It said underlying profit had risen 22 per cent year on year – mainly at its British operation - if accounting losses from the HK Electric stake sale this year and a HK$19 billion gain from HK Electric’s spin-off in the first half of last year were excluded.

Power Assets, which has energy assets in Britain, Australia, New Zealand, mainland China, the Netherlands, Canada, Thailand and Hong Kong, had HK$67.8 billion of cash and bank deposits at the end of June.