Tycoon Li Ka-shing's conglomerate Hutchison Whampoa Ltd. reported a 63 percent drop in first-half earnings Thursday, but still beat expectations thanks to shrinking telecom losses and better income from its energy and port businesses.
Net income for the six months ended June 30 was 10.69 billion Hong Kong dollars (US$1.37 billion) compared with HK$28.76 billion in the same period last year, the company said in a statement to the Hong Kong stock exchange.
Revenue climbed 24 percent to HK$176.2 billion (US$22.6 billion).
Many analysts had expected the company _ a sprawling conglomerate with retail, property, energy, infrastructure and telecom operations in 57 countries _ to post half-year earnings below HK$10 billion.
Li, Hutchison's chairman, argued the company could fare well even in tough economic times because it operated in so many locations.
"If this country isn't doing well, another is doing better. So we're very lucky we can do quite well," said Li, whose US$26.5 billion fortune makes him the world's 11th richest person, according to Forbes.
The half-year slide was largely due to the absence of a major asset sale. In the same period last year, the company booked a disposable gain of HK$35.82 billion (US$4.6 billion) after its telecom unit, Hutchison Telecommunications International Ltd., sold off Indian mobile phone assets.
The company, though, was helped by improving performance at its third-generation mobile business, known as the 3 Group. The business trimmed its operating losses by 72 percent to HK$3.18 billion, on 14 percent higher revenues, leading the company to predict 3G would be profitable next near.
Meanwhile, its Canada-listed affiliate Husky Energy Inc. posted a 64 percent rise in earnings mostly on the back of higher oil prices and a joint-venture deal with BP PLC. Operating income at its port and related businesses was up 19 percent at HK$6.85 billion (US$878 million), and 143 percent higher at its property and hotel unit.
"It's mainly because of the acquisitions they've made in the past and their geographical diversity, so they are actually weathering the downturn quite well," said Credit Suisse analyst Cusson Leung.
Li said the company could benefit from its location in Hong Kong amid global economic turmoil.
"The outside world is very turbulent, but Hong Kong will be better sheltered because of China's stable economic growth," he told reporters. "We will keep investing and making purchases in the Hong Kong and Chinese markets."
Also Thursday, Li's flagship developer Cheung Kong (Holdings) Ltd., Hong Kong's No. 2 property firm by market value, posted a 35 percent slide in first-half net profit, hurt partly by lower contributions from affiliate Hutchison. The company's earnings fell to HK$12.02 billion (US$1.54 billion) from HK$18.54 billion, beating most expectations.
Shares of Hutchison, off more than 19 percent for the year, fell 1.3 percent to HK$70.55 on Thursday. Cheung Kong's stock, off nearly 28 percent this year, slid 2.79 percent to HK$101.1.