HONGKONG (September 16): HUTCHISON International dumped an arithmetical time-bomb in the laps of the financial community with the announcement of their first consolidated figures.
The trading 'hong' produced net after tax group profits of $176,844,000 for the year ended March 31, compared with chairman Sir Douglas Clague's well-informed 'guesstimate' of $138,200,000 in his annual report covering the previous year when no audited consolidated profits were available.
I would justify the journalistic phrase 'time-bomb' for three reasons. Firstly we will have to wait around a month or so for the full report and accounts. Secondly the local community is likely to seize on the traditional H.I.L. net figures (which have dropped to $100,611,000 from the previous $136,362,000), and lastly because British institutions will want to study the position carefully before they make a move in the market place.
Many of us have been baying for blood, in the shape of consolidated figures from Hutchison's for years - and we got them.
Now the trick is to try to understand and analyse a veritable maze of figures.
A key phrase used by the company in the results announcement was: 'The difference between cost and market value of the company's quoted investments [that means a book loss] amounting to $218,635,000, has been fully written off by transferring $100,000,000 from Capital Reserve to the credit of Profit and Loss Appropriation Account and by charging the full amount to the latter account.'