Hong Kong's Hutchison says 1H profit drops 78 pct

AP News
Posted: Aug 02, 2012 7:07 AM
Hong Kong's Hutchison says 1H profit drops 78 pct

HONG KONG (AP) — Hong Kong tycoon Li Ka-shing's conglomerate Hutchison Whampoa said Thursday that first-half profit tumbled 78 percent from the year before when results were boosted by a big one-time gain.

The ports-to-mobile phones conglomerate, which has operations in 53 countries and employs more than a quarter-million people, said stripping out that gain showed that recurring profit was 13 percent higher. Hutchison said that the company's divisions "continued to perform well despite deteriorating global economic conditions that affect many of the markets and sectors in which we operate to varying degrees."

The company, controlled by Li, Asia's richest man, posted a profit of 10.2 billion Hong Kong dollars ($1.3 billion) for the January-June period, down from HK$46.3 billion last year. Last year's profits were boosted by the spin-off its ports in Hong Kong and southern China, which raised HK$37.2 billion.

Most Hutchison divisions posted profit gains despite the bleak economic outlook in Europe, where many of them have significant operations. The results help illustrate why the 84-year-old businessman is nicknamed Superman by Hong Kongers, who revere his moneymaking abilities. Forbes Magazine estimates Li's net worth at $25.5 billion, making him the world's ninth richest person, as of March.

Hutchison's retail division, which owns chains including Superdrug in Britain and Marionnaud in France, posted a 12 percent gain in earnings before interest and tax. The growth came despite the weakness in Europe and was helped by strength in Asia, the company said.

Earnings before interest and tax at the company's European mobile phone division grew by 51 percent as it captured a larger share of the smartphone segment and tightened cost controls.

Hutchison's ports division, which operates ports in dozens of countries on nearly every continent, reported a 15 percent gain in earnings before interest and tax.

The company also benefited from profit contributed by Britain's Northumbrian Water Group Ltd., which its infrastructure division purchased in October, as well as higher profits at another British utility, UK Power Networks.

But at Hutchison's Canadian oil company, Husky Energy, earnings fell 21 percent, partly due to a one-off profit from the sale of assets the year before that distorted the comparison.

At a press conference, Li said he has no plans to retire but reiterated that he will eventually pass the reins of his business empire to his eldest son, Victor.