Hutchison profit cut in half


Hutch is the world's largest ports operator, but business was down in its hometown, Hong Kong

Alex Frew McMillan
CNN

HONG KONG, China -- Conglomerate Hutchison Whampoa on Thursday said it earned a net profit of HK$12.1 billion ($1.55 billion) for the 2001 year.

That was down 65 percent from the previous year, but it outstripped expectations by some 24 percent.

Hutchison Whampoa is one of the crown jewels of tycoon Li Ka-shing, Asia's richest man. His Cheung Kong Holdings owns 49.9 percent of the company.

Also on Thursday, Cheung Kong reported profits of HK$7.3 billion ($935 million). Those were at the low end of forecasts (full story).

Li, Hutchison's chairman, admitted that 2001 had been a very difficult year, with the economic downturn in the United States intensifying in the second half of the year.

Oil and gas prices dropped and stock markets were choppy, he noted, and credit markets are increasingly fragile.

Ports business up

"Accordingly, 2002 is expected to be another volatile and perhaps more challenging year than 2001," he stated in a release with the earnings.


Li says 2002 may well be even more volatile than 2001, which was a tough year

Hutch is the largest operator of ports in the world, controlling the bulk of shipping in Hong Kong and other major ports such as Rotterdam, in the Netherlands.

It also has stakes in several telecommunications companies and joint ventures.

Though its numbers were down substantially, that was expected. "Hutch," as the company is often called, saw its 2000 earnings inflated by some outsize trading gains.

A poll of analysts by Reuters news agency had forecast a profit of HK$9.73 billion for the year just ended. The 2001 profit translated to HK$2.84 per share.

Total ports revenues increased 9 percent to HK$15.5 billion, thanks to higher traffic at its ports in Panama and in Yantian, the company said. But business was down in Hong Kong, Shanghai and ports in the United Kingdom.

Telecom sales increase 14 percent

Hutch also has 4.6 million telecom subscribers around the world. Total phone-business sales were up 14 percent to HK$11.5 billion. The company credited adding customers in India and Israel for the gain.

Sales from Hutch's property and hotels business plummeted, down 24 percent to HK$5.5 billion. The group blamed a slump in activity in its main market, Hong Kong.

The 2001 results include a HK$30 billion extraordinary gain on the sale of its investment in the telecom company VoiceStream.

Hutch also made an extraordinary profit of HK$4.4 billion from selling stakes in British cell-phone provider Vodafone and in Germany's Deutsche Telekom.

But those gains were mostly offset by a HK$31.3 billion extraordinary charge the company took to write down the value of its investments.

Hutchison Whampoa fell 1.83 percent on the day to end at HK$67.00. That was on a day most of the blue chips on the Hang Seng lost ground (market roundup).

But partner company Pacific Century CyberWorks climbed 1.23 percent to HK$2.05 a day after its releasing its earnings.

PCCW said on Wednesday that it had returned to the black in 2001, posting a profit of HK$1.89 billion ($243 million), a year after losing HK$6.9 billion (full story).

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.