Cheung Kong posts 56% jump in second-half profit
Posted by luxuryasiahome on March 28, 2008
Earnings boosted by higher investment income, Hutchison’s sale of unit in India
Cheung Kong (Holdings) Ltd, Hong Kong billionaire Li Ka- shing’s biggest property developer, posted a 56 per cent rise in second-half profit after reporting higher investment income and earnings at unit Hutchison Whampoa Ltd.
Profit for the six months ended Dec 31 rose to HK$9.14 billion (S$1.62 billion) from HK$5.86 billion a year earlier, according to Bloomberg calculations subtracting first-half earnings from full-year numbers reported by the company yesterday.
Cheung Kong, which grew out of the plastics business Mr Li founded more than 50 years ago, benefited in 2007 as a four-year economic boom and falling interest rates fuelled gains in Hong Kong real estate and share prices.
Profit was also helped by Hutchison’s sale of a unit in India and narrowed losses from high-speed phone service.
‘Profit is still largely driven by growth in Hutchison,’ said Castor Pang, a strategist at Hong Kong-based Sun Hung Kai Financial & Co, before the release.
‘There’s a bit of uncertainty about its property business this year because of concerns over the movement of property prices in Hong Kong.’
Cheung Kong’s earnings from investment and finance grew 3.6 times in 2007, during which Hong Kong’s benchmark Hang Seng Index surged 39 per cent.
For the full year, net income rose 53 per cent to HK$27.7 billion, or HK$11.95 a share, from HK$18.08 billion, or HK$7.80, in 2006, the city’s second-biggest builder by market value said in Hong Kong stock exchange filing yesterday.
That beats the HK$24.7 billion average of five analysts’ estimates compiled by Bloomberg.
The Hong Kong landlord of companies including Goldman Sachs Group Inc and Deutsche Bank AG said sales excluding jointly developed projects rose to HK$13.3 billion from HK$11 billion.
Profit excluding earnings from Cheung Kong’s 49.97 per cent stake in Hutchison Whampoa, Mr Li’s telecommunications company, rose 54 per cent to HK$12.4 billion.
Its profit from investment and finance rose to HK$4.94 billion from HK$1.08 billion.
Shares of Cheung Kong had risen as much as 3.4 per cent in the morning, before the earnings announcement.
The stock has lost 23 per cent this year, outpacing the 19 per cent decline in the Hang Seng Index.
Mr Li, 79, is ranked No. 11 on Forbes magazine’s list of the world’s richest people with a fortune of US$26.5 billion, the publication said this month.
Cheung Kong’s profit from its property unit, including projects in Hong Kong, China and Singapore, rose to HK$7.5 billion from HK$7 billion, with most growth coming from rental income at its commercial properties in Hong Kong.
‘In 2008 we expect the inflationary trend and the cycle of interest cuts to continue,’ Mr Li said yesterday.
The ‘negative interest rate environment will provide further stimuli to the overall market demand and sentiment’.
Hutchison Whampoa, Mr Li’s ports, retail and telecommunications company and the world’s largest container-terminal operator, yesterday said 2007 profit rose 53 per cent on gains from asset sales and paring losses at 3 Group, which owns third-generation wireless businesses in Europe and Australia.
Cheung Kong will pay a final dividend of HK$1.95, compared with HK$1.74 in 2006. — Bloomberg
Source : Business Times – 28 Mar 2008
