Li Ka-shing's Cheung Kong H1 net profit fall 54 pct

Property giant Cheung Kong Holdings, controlled by Hong Kong billionaire Li Ka-shing, said Thursday that its profit attributable to ordinary shareholders in the first half of 2012 slumped 54 percent from a year ago to 15.46 billion HK dollars (2 billion U.S. dollars).

Earnings per share were 6.67 HK dollars, the company said in the filing to the Hong Kong stock exchange. It will pay an interim dividend for 2012 of 0.53 HK dollars per share to shareholders in September.

Cheung Kong Holdings, also the largest shareholder of HK-listed telecom-to-port conglomerate Hutchison Whampoa, said turnover for the six months ended on June 30 stood 17.72 billion HK dollars, down 32 percent from a year ago.

In breakdown, property investment generated 10.36 billion HK dollars of profit in the first half for Cheung Kong, an increase of 2 percent over the same period last year. Hutchison Whampoa, at which Cheung Kong owns some 49.97 percent of stake, brought 5.1 billion HK dollars of profit, much less than 18.58 billion HK dollars in the first half of 2011.

This comparative decline against the same period last year was primarily due to the IPO of the HPH Trust in Singapore, Cheung Kong said in the statement.

Cheung Kong Holdings and Hutchison Whampoa, both blue chips of the Hang Seng index, are flagship listed companies of the Cheung Kong Group, which also owns the other nine listed companies globally. In total, the group operates in 53 countries and regions, and employs about 270,000 staff worldwide.

Cheung Kong Holdings is one of the largest property developers in Hong Kong of residential, commercial and industrial properties. About one in seven private residences in Hong Kong were developed by the company.

Market value of Cheung Kong Holdings stood at 236.9 billion HK dollars, measured by the closing share price on Thursday. Its shares fell 1.1 percent to end at 102.3 HK dollars at the Hong Kong stock exchange.

Li said in the statement that Hong Kong's property market outlook will largely hinge on the external economic conditions and the development of housing policies.

"We expect market fundamentals to remain healthy in the second half year with property prices generally staying steady (in Hong Kong)," he said.

On the Chinese mainland, property prices and sales volume were below expectations as the policy-led property market correction has continued. Despite market challenges, the company is steadfast in driving further expansion on the mainland by making focused but cautious investments, he said.

In 2011, Cheung Kong Holdings made its first foray into the infrastructure business through the acquisition of Northumbrian Water, a regulated water and sewerage company in the U.K. Li said Northumbrian Water recorded better-than-expected performance and provided its first full period of contribution.

And the acquisition of Wales & West Utilities Limited, one of the eight gas distribution networks in the U.K., is expected to be completed at the end of September.

"Global market conditions will remain highly volatile in the second half year as uncertainties over the Eurozone debt crisis are anticipated to persist, and the pace of U.S. economic recovery is seen to be slowing," he said.

China's economic performance was inevitably affected by external forces, but its economic conditions are stable as a whole. Proactive measures have been taken to ease monetary conditions and accelerate fiscal efforts to stimulate the economy following the Chinese central government's pledges to place a higher priority on stabilizing growth.

"We expect positive growth in the second half year with GDP growth (of the mainland) for 2012 maintained at 7.5 percent," Li said. "We are optimistic about the long-term economic prospects for the Mainland and Hong Kong."

Li said he saw positive prospects for Cheung Kong Holdings in terms of operating results and business growth, and the company was "well placed to pursue investments that are beneficial to our future development." (1 U.S. dollar equals 7.76 HK dollars)