BLBG:Hutchison Profit Doubles as Utilities, Oil Earnings Climb
Hutchison Whampoa Ltd. (13), billionaire Li Ka-shing’s biggest company, posted full-year profit that more than doubled after boosting earnings from U.K. utilities, Canadian oil production and cosmetics stores in China.
Net income climbed to HK$56 billion ($7.2 billion) in 2011, from a restated HK$20.2 billion a year earlier, the Hong Kong- based company said in a statement today. The average of nine analyst estimates compiled by Bloomberg was for a profit of HK$55.9 billion.
Investment returns from Li’s $9.2 billion takeover of power networks in southeast England in 2010, his biggest acquisition, and higher oil prices fueled earnings at Hutchison, which also booked one-time gains from sales of ports and property assets. Demand from smartphone users in markets including the U.K. and Sweden helped the company’s 3 Group wireless division post a second full-year profit.
“Infrastructure and Husky should be the main drivers,” Lorraine Tan, director of equity research at Standard & Poor’s in Singapore, said before the earnings announcement, referring to Hutchison’s Husky Energy Inc. (HSE) affiliate. Hutchison is expected to focus on further investments in utilities and may review acquisitions of phone assets in Europe, she said.
Revenue Increase
Hutchison fell 0.4 percent to HK$79.05 at the close of Hong Kong trading today before the announcement. The stock has gained 22 percent this year, outperforming the city’s benchmark Hang Seng Index, which has advanced 12 percent.
Hutchison, with investments in ports, telecommunications, retail, property and energy in more than 50 countries, said it increased revenue 12 percent to HK$233.7 billion in 2011.
Full-year profit at Cheung Kong Infrastructure Holdings Ltd. (1038), the roads and utilities arm of Hutchison, rose 54 percent to a record HK$7.7 billion. Cheung Kong led a group of Li- affiliated companies to buy the U.K. power networks of EDF SA (EDF) for 5.8 billion pounds ($9.2 billion) in October 2010. A year later, it acquired Northumbrian Water Group Plc (NWG), based in Durham, England, for 2.4 billion pounds.
Husky, the Calgary, Alberta-based oil producer part-owned by Hutchison, said last month that full-year profit more than doubled on higher margins and increased production.
3 Group, an operator of 3G, or third-generation, mobile- phone services in seven markets in Europe and Australia, earned HK$1.5 billion before interest and tax last year, compared with HK$2.93 billion in 2010.
The mobile-phone division posted its first annual profit in 2010, seven years after starting services.
Hutchison booked a profit from the $5.5 billion initial public offering of Hutchison Port Holdings Trust (HPHT) in Singapore in March 2011, and the 10.5 billion yuan ($1.7 billion) listing of the Hui Xian Real Estate Investment Trust (87001) in Hong Kong the same month.
To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
