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Signage for Hong Kong International Terminal (HIT), a unit of CK Hutchison, is displayed on gantry cranes at Container Terminal 9 at Kwai Tsing Container Terminal in Hong Kong, on January 22, 2019. Photo: Bloomberg

CK Hutchison and CK Asset post upbeat profit results during Victor Li’s debut year as chairman

  • The listed flagship companies of tycoon Li Ka-shing reported improving profit for the period ending December 31
  • CK Hutchison’s posted net profit of HK$39 billion (US$4.97 billion), a rise of 11 per cent on year, and exceeding the average forecast of analysts polled by Bloomberg
  • CK Asset Holdings reported net profit of HK$24.13 billion, up 18.8 per cent from 2017
Victor Li

CK Hutchison Holdings and CK Asset Holdings, the listed flagships of tycoon Li Ka-shing, reported higher profit in the first set of annual results since his eldest son Victor Li Tzar-kuoi took over as chairman in May last year.

CK Hutchison, the conglomerate with businesses spanning container ports, retail, telecommunications, and power plants, said net profit increased 11 per cent to HK$39 billion (US$4.97 billion) for the year ending December 31, beating the HK$38.4 billion average forecast of analysts polled by Bloomberg.

Some 57 per cent of the growth in earnings before tax and interest expenses came from its Canadian oil and gas unit Husky Energy, with the rest mainly driven by retail and telecommunications.

CK Asset, Hong Kong’s second biggest property developer by market capitalisation, posted an underlying net profit, excluding revaluation gains on investment properties, of HK$24.13 billion for 2018, up 18.8 per cent from 2017. The result was lower than the HK$28.3 billion average estimate of six analysts polled by Bloomberg.

CK Hutchison’s declared a final dividend of HK$2.30 per share, bringing its full year dividend to HK$3.17, compared to HK$2.85 in 2017.

CK Asset’s board declared a final dividend of HK$1.43 per share, bringing the full-year payout to HK$1.90, up from HK$1.70 in 2017.

Since becoming chairman, Victor Li has turned CK Asset’s investment focus back to the Hong Kong property market, initiating residential and commercial projects estimated by industry consultants to require some HK$66 billion of investment.

But he told reporters the company has not changed its strategy, saying: “We have not and will definitely not change our broad strategy in pursuing stable growth. Amid ample global uncertainties, quality of earnings is more important than the absolute amount of profit.”

“This can be achieved through geographical and industry diversity of earnings to reduce cyclical risks.”

His father in 2016 said the group would spread its focus globally as it faced challenges finding investments with reasonable returns in the local property sector.

That change saw the firm sell down assets in the city and plough HK$64 billion into aircraft leasing, infrastructure and utility assets in Europe, Australia and Canada.

On Wednesday, Victor Li said its related unit CK Infrastructure will look beyond conventional infrastructure to potential investments in “new industries and other infrastructure-like businesses”. The statement was made after CKI reported weaker than expected profit.

Victor Li referred to investments by CKI in Germany-based home energy management services company Ista and Canadian home heating and air-conditioning provider Reliance Home Comfort,

as examples of diversification into new industries.

Li Ka-shing warned in January against speculation in Hong Kong’s property market.

Victor Li added on Thursday: “Global uncertainties on the political and economic front can have an impact on Hong Kong's interest rates and employment – which in turn have big implications for the city’s property market.”

The elder Li has continued to serve as senior adviser to CK Hutchison and CK Asset since stepping down as chairman last May. Victor Li said his father continues to visit the office and provide advice to the companies.

This article appeared in the South China Morning Post print edition as: ck hutchison, ck asset report higher profits
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