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Denise Tsang

Cash-rich Cheung Kong Infrastructure (Holdings) reported a worse than expected 7.3 per cent drop in net profit to HK$4.42 billion for  last year, but raised the prospect of joining with associate Hongkong Electric Holdings in future acquisitions.
CKI chairman Victor Li Tzar-kuoi said yesterday that the group was aggressively pursuing investment opportunities since asset prices had sunk so sharply that the global mergers and acquisitions arena had become 'a buyer's market'.
Without elaborating on potential targets, he said CKI and its 38.87 per cent-owned power utility, Hongkong Electric, could  pool their cash resources to bid for projects with stable income and cash-flow and in markets with clear-cut regulatory regimes.
'We are aggressively pursuing projects and vigorously studying targets, but will [if they materialise] conclude them conservatively,' Mr Li said after disclosing that the company had a war chest of HK$11 billion as of the end of last year. 
He declined to comment  on whether the potential acquisition would be the biggest in the company's history.
Some analysts have speculated that the combined financial strength of CKI and Hongkong Electric could be sufficient for an acquisition as large as US$3 billion and it could be in the pipeline.
CKI's net profit for  last year  was below analysts' consensus of HK$4.77 billion. 
Net profit was dragged down by a HK$631 million exchange loss from a 30-year, 30 billion yen (HK$2.43 billion) denominated loan made in 2002. In 2007, it  recorded an exchange gain of HK$88 million.
Foreign exchange volatility ate into bigger contributions from its overseas portfolio. 
Its Australia power distribution assets generated 194 per cent growth in profit to HK$850 million, and earnings at its gas and water supply business in Britain were 20 per cent higher at HK$550 million. 
Profit from the company's mainland portfolio, which includes power plants and toll roads, slid 14 per cent to HK$1.32 billion. But the base of comparison was inflated by a one-off gain of HK$815 million from asset disposals in the previous period.  The company said toll income and traffic volume recorded growth.
The final dividend was lifted 0.96 per cent to 83.8 HK cents per share, bringing the full-year payout 3.2 per cent higher to HK$1.135 per share. Earnings per share fell 7.54 per cent to HK$1.96. The stock  fell  0.17 per cent to HK$29.95  after the results announcement.



CKI targets acquisitions while earnings drop 7.3pc to HK$4.4b