Cheung Kong profits disappoint in massive drop


Cheung Kong owns half of Hutch, as well as Internet company Tom.com, and blamed its drop on the property slump

Alex Frew McMillan

HONG KONG, China (CNN) -- Property company Cheung Kong Holdings came in with a full-year net profit that was down 62.5 percent for 2001.

The company stated Thursday that it earned HK$7.3 billion ($935 million) for the year ended December 31. That was below expectations. The year before it posted a net profit of HK$19.4 billion.

A group of investors polled by Multex had predicted a 2001 profit of HK$7.8 billion, thanks to a much smaller contribution from conglomerate Hutchison Whampoa

The earnings translate to HK$3.15 per share. Its total sales were just HK$7.5 billion, not far off its profit figures. For 2000, total revenues were HK9.3 billion.

Cheung Kong Holdings owns 49.9 percent of Hutchison Whampoa. Hutch said on Thursday that it cleared a net profit of HK$12.1 billion ($1.55 billion) for the 2001 year (full story).

But that too was down substantially, off 65 percent over 2000, when it posted some outsize investment gains.

Property slump to blame

Cheung Kong blamed the property slump in Hong Kong for its poorer performance. It said it is taking a HK$1.5 billion provisional charge to offset a drop in the value of two property projects, the Caribbean Coast and Metropolis developments.

Cheung Kong stock ended down 1.43 percent at HK$69.00 on Thursday. Hutchison Whampoa fell 1.8 percent to HK$67.00.

Investors have been looking for signs of a recovery in Hong Kong's property market. Cheung Kong's drop came on a poor day for property developers.

Henderson Land fell 7.7 percent to HK$31.30. The sector's lull helped bring the Hang Seng down 1.9 percent to 10,829.73, on a day most Asian indexes fell (market roundup).

The Hang Seng is the only main Asian index that is still showing a loss for the year. It is down 4.98 since January. But it still up 14.1 percent since September 11.