Li Ka-shing’s group profit drops as pandemic slams business

CK Hutchison Holdings Ltd.’s profit fell as the Hong Kong conglomerate founded by the city’s richest tycoon Li Ka-shing saw its retail, ports and real estate businesses hurt by the coronavirus pandemic.
Net income fell to HKD13.2 billion ($1.7 billion) for the six months through June, the company said in a statement yesterday. The company also lowered its planned dividend to HKD0.614 a share from HKD0.87 per share last year.
The CK business empire spans ports, telecommunications, retail and utilities with two-thirds of profit last year coming from Europe, making it more vulnerable to the pandemic that has hit the continent harder than Hong Kong. At the same time, months of protests against China’s tightening grip on Hong Kong have also hurt CK Hutchison’s retail businesses in the city and raised concern that simmering geopolitical tension could make it harder for Li to make deals overseas.
The first-half results included a HKD9.2 billion gain from the merger of its Australian phone venture with TPG Telecom Ltd.
After the pandemic-led sell-off that dragged down both the city’s benchmark Hang Seng Index and CK Hutchison’s shares in March, the index has partially recovered while the company’s stock is still trading near the year’s low.
The plunge has pared its market value to about half of net assets, the least since it was formed in a 2015 restructuring.
Profit at the group’s listed property arm also fell as the pandemic undermined demand for residential real estate. Sales for new residential real estate projects slated will likely be postponed amid the pandemic, while mass residential prices could drop as much as 10% this year, Jones Lang LaSalle Inc. estimates. MDT/Bloomberg

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