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Hutchison H1 profit beats forecasts on solid overseas performance

By Yimou Lee

HONG KONG (Reuters) - Ports-to-telecoms conglomerate Hutchison Whampoa Ltd, owned by Asia's richest man Li Ka-shing, reported on Thursday better-than-expected first-half profits, buoyed by a solid performance in European infrastructure and telecoms investments.

Li, nicknamed "Superman" by local media for his deal-making savvy, plans to exit the mature Hong Kong supermarket business to focus on investing in European infrastructure and telecom assets as global economic woes drive down prices, analysts said.

"Whilst uncertainty will remain a challenge for the second half of 2013, major economies are showing signs of stabilization and gradual recovery," Li said in a filing to the Hong Kong stock exchange.

Hutchison said it would not hold a news conference after the earnings announcement. The company did not give a reason for the rare cancellation.

Hutchison, which operates in more than 52 countries, said despite difficult conditions in many of the economies in which it operates, its overall business achieved solid growth with the exception of its joint venture Vodafone Hutchison Australia.

In the first six months, the company posted an underlying profit of HK$12 billion ($1.6 billion), up from a revised HK$9.71 billion a year earlier. The result, which excludes exceptional items and property valuations, beat the average forecast for an underlying profit of HK$10.9 billion in a Thomson Reuters poll of four analysts.

Hutchison proposed an interim dividend of HK$0.60 per share, up from HK$0.55 in the same period last year. It was the first time the company has increased the interim dividend payout since 2011.

As part of its efforts to focus on growing its core business, Hutchison said in mid-July it was conducting a strategic review of its Hong Kong supermarket chain, ParknShop, with an asking price of up to $4 billion.

Industry analysts expect Hutchison to move its focus to China's health and beauty business, which was the highest earnings growth contributor in the company's retail sector and accounted for about one-fourth of its EBITDA in 2012.

Overseas infrastructure and telecommunications businesses were the major drivers behind the solid performance, a trend that is likely to persist for the rest of the year, analysts said.

"Europe was a drag on investor sentiment on Hutch in 2012; thus, an improvement in European macro should translate to positive investor sentiment on the stock," UBS said in a report before the earnings announcement.

Hutchison's unit, Cheung Kong Infrastructure Holdings, last week posted a 10 percent rise in net profit and said it expected growth to continue, boosted by the operations of Power Assets and UK Power Networks.

Analysts said a growing customer base in its telecom businesses in Britain and Austria also helped boost growth.

Husky Energy Inc, Canada's No.3 integrated oil company which is controlled by Li, also reported a better-than-expected quarterly profit as production rose and the company realized higher prices.

Separately, property conglomerate Cheung Kong (Holdings) Ltd, which holds a controlling stake in Hutchison, posted a 13 percent fall in first-half net profit to HK$13.4 billion ($1.73 billion) as cooling measures imposed since last October took a toll.

Hutchison's shares have risen 8.4 percent so far this year, beating a 2.5 percent fall in the benchmark Hang Seng Index.

($1 = 7.7553 Hong Kong dollars)

(Additional reporting by Donny Kwok in HONG KONG; Editing by Lee Chyen Yee and Matt Driskill)

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