(Bloomberg) -- CK Hutchison Holdings Ltd. has vowed to explore more deals with long-term value to navigate increasing geopolitical and financial market risks, as the Hong Kong conglomerate reported slumping profit for the first half of the year.
The group, founded by billionaire Li Ka-shing, saw net income in the first half this year fall 9% to HK$10.2 billion ($1.3 billion), it said in a filing Thursday. Total revenue rose 4% to HK$232.6 billion during this period.
Now led by Li’s son Victor Li, CK Hutchison announced an interim dividend of HK$0.688 per share, compared with HK$0.756 per share last year.
The continued focus on deal-making came as the group announced a slew of acquisitions and the second listing of its key subsidiary in recent months to drive growth.
While CK Hutchison’s diversified operations across the world are meant to reduce risks, a global economic slowdown and rising tensions from Europe to the Middle East has dealt a blow to key profit drivers from retail to infrastructure and ports.
Weak consumer spending has weighed on retailers in Europe, the company’s biggest market, contributing half of its income. China’s economic slowdown remains a challenge to the conglomerate’s businesses at home. The group collects the rest of its revenues from regions including Canada and Australia.
CK Hutchison has been active in closing deals recently, especially in the infrastructure and telecommunications sectors. Subsidiary CK Infrastructure Holdings Ltd. has applied for a secondary listing in London, with shares expected to begin trading on Aug. 19, the company said in a statement Wednesday.
CK Infrastructure and other CK group companies also said Wednesday they had agreed to buy a portfolio of wind farms in the UK from Aviva Plc for about £350 million. The deal followed two earlier acquisitions of renewable energy assets by the group this year.
CK Hutchison’s sister company CK Asset Holdings Ltd., which focuses on real estate development, reported a 17% decline in net income during this first half to HK$8.6 billion.
Persistently high interest rates and a glut of apartments are set to continue weighing on property prices in Hong Kong. CK Asset’s coming projects will have to keep its recent low pricing strategy to lure buyers.
Hong Kong’s weak office sector could also make it hard for CK Asset to fill up its skyscrapers in the Central business district. The city’s office vacancy rate hit a record high of 16.9% in the first half of the year, with rental prices expected to drop as much as 10% in 2024, according to CBRE Group Inc.
(Updates throughout)
©2024 Bloomberg L.P.
