Hutchison Whampoa Ltd posted a 50 percent gain in second-half profit as losses from high-speed phone services shrank and earnings from energy and ports increased.

Annual net income climbed 53 percent to HK$30.6 billion ($3.93 billion), or HK$7.18 per share, from HK$20 billion, or HK$4.70, a year earlier, the company said in a statement yesterday.

3 Group, owner of Hutchison''s third-generation wireless businesses in Europe and Australia, stemmed losses by limiting sales through third parties. Higher oil prices and global trade boosted the energy and ports units, helping fund a fourth year of 3G losses.

"The numbers show the 3G operations have stabilized, and are becoming self-sustaining," said Alexander Chia, who rates Hutchison shares "hold" at Standard and Poor''s Equity Research in Kuala Lumpur. "The question is whether the rate of improvement can continue given the slowdown in Europe."

The company targets positive monthly earnings before interest and tax for 3 Group during the second half. In 2007, 3 Group lost HK$17.9 billion before interest and tax, compared with HK$20 billion a year earlier.

The 3G unit earned HK$2.8 billion before interest, tax, depreciation and amortization, and after deducting customer acquisition costs in the second half, meeting the profitability target set by Hutchison Managing Director Canning Fok.

In the previous six months, 3 Group lost HK$1.6 billion on that basis, which Fok deemed as the threshold that signals the 3G business is getting enough sales to cover running costs.

Chairman Li Ka-shing has relied on asset sales and earnings from ports, energy, property and retail businesses to offset 3G losses and increase Hutchison''s earnings for the fourth straight year.

Earnings before interest and taxes at Hutchison Port Holdings Ltd, the world''s biggest operator of shipping terminals, increased 23 percent to HK$12.8 billion from HK$11.4 billion a year earlier. Sales climbed 15 percent to HK$37.9 billion from HK$33 billion.

Husky Energy Inc, a Canadian oil and natural gas company in which Hutchison owns 35 percent, last month reported a 18 percent jump in profit to 3.2 billion canadian dollars ($3.14 billion) on higher output and prices. Li owns an additional 36 percent in the energy company.

Earnings before interest and tax in Hutchison''s property and hotels business fell to HK$4.1 billion last year, from HK$5.7 billion in 2006, as sales of residential units declined, the statement said.

Hutchison said it will pay a final dividend of HK$1.22, the same as the year before.


Source:China Daily

Tags:3G