Hutchison Whampoa, the Hong Kong-based conglomerate headed by the tycoon Li Ka-shing, reported better-than-expected interim results on Thursday in spite of the global economic downturn.
It attributed this to the company’s international presence. Hutchison Whampoa, which has operations in 57 countries, said its strong business growth in some markets had offset poorer performances elsewhere.
“The economy has not affected us a lot,” said Mr Li, chairman.
“Very often one country may not do very well, but another does well. We have been pretty lucky.”
For the first six months of this year, revenue at the group jumped 25 per cent to HK$176.2bn ($22.5bn).
Net profit dropped 63 per cent to HK$10.7bn from the same period in 2007 when it had booked a HK$35.8bn gain from the sale of a wireless business in India. Analysts had forecast net income of about HK$9.1bn.
Hutchison’s 3G mobile operation, which has been a drag on earnings for years, also reported a narrower loss after the company signed up more broadband customers, who usually provide lower average revenue but higher gross margins.
The 3G business, which operates mainly in Europe and the UK, also benefited from a HK$2.95bn foreign exchange gain and the strengthening of the euro and sterling against the Hong Kong dollar, which is pegged to the US dollar.
Hutchison maintained its target for the 3G unit to report an operating profit in 2009.
Canning Fok, managing director, said the company would continue to focus on the 3G business for the next two to three years. “It’s a big asset to exploit,” Mr Fok said.
While Hutchison has been relatively unscathed by the slowdown, Mr Li warned that the worst was yet to come for the Hong Kong economy, which shrunk between April and June for the first time in five years.
The company also sees acquisition opportunities arising from the global downturn, but would be selective regarding targets.
“In this economic environment with the credit crisis, we will be extremely careful. We will only consider very good opportunities,” Mr Li said.
For the second half Hutchison said its Canadian oil business would be the biggest growth-driver. Husky Energy contributed 28 per cent of operating profit in the first half.
In Europe the company’s retail business had been “holding up quite well” in softening economic conditions, Mr Fok said.
“So far, we’re on budget but, as our chairman said, the ultimate test is December”
