By Mark Lee and Chia-Peck Wong March 31 (Bloomberg) — Li Ka-shing , Hong Kong’s richest man, said Hutchison Whampoa Ltd. may raise its dividend for the first time in a decade as the global recovery busies ports from the U.K. to Korea and drives retail earnings to a record. “If this year we can meet the budget, I will consider raising dividends on Hutchison,” Li said at a briefing yesterday, after Hutchison announced 2009 results. “The expectation on 3G business would be better than last year. If 3G can meet the target, there is a chance to increase dividends.” Hutchison, with investments from drugstores in the U.K. to phone services in Vietnam, last increased its full-year dividend for 2000, to HK$1.73, the amount it has paid shareholders in every subsequent year. The company and parent Cheung Kong (Holdings) Ltd. will generate growth in 2010, Li told reporters. Li sold some of Hutchison’s most profitable businesses and used ports, property, energy and retail earnings to finance more than seven years of losses at 3 Group, the provider of 3G, or third-generation, services in seven markets in Europe and Australia. The phone unit is expected to be profitable before interest and tax this year, the company said yesterday. Li said “the future is good” for 3G. “The cost of acquiring customers has come down and they are operating their businesses more efficiently,” Gary Pinge , who rates Hutchison shares “buy” at Macquarie Group Ltd. in Hong Kong, said before the announcement. The mobile-phone operations will show an “ongoing improvement,” while the ports and energy divisions are expected to rebound, Pinge said. Slower Spending Hutchison cut spending on its wireless units and increased property sales in China as the global recession dragged down earnings from oil production and shipping. The company, with operations in 54 countries, may increase investments this year as the economic recovery revives trade and consumer spending. “The company deferred some capital spending last year, and they will put some of that back this year,” said Kalai Pillay , senior director at Fitch Ratings in Singapore. The improvement at the mobile-phone division was marginal “and not game- altering,” Pillay said. Hutchison’s net income rose to HK$14.2 billion ($1.8 billion), or HK$3.32 a share, from a restated HK$12.7 billion, or HK$2.97, a year earlier, Hutchison said in a filing to the Hong Kong stock exchange yesterday. That compares with the HK$14.6 billion median estimate of five analysts surveyed by Bloomberg News. Sales fell to HK$208.8 billion from HK$235.5 billion a year earlier, Hutchison said. Ports Earnings Hutchison’s port unit earned HK$10.4 billion before interest and tax last year, 21 percent less than a year earlier, the statement said. Sales at the division fell 16 percent to HK$33.4 billion. The company handled fewer containers in China last year as slumping economies in the U.S. and Europe dampened demand for Asian-made clothes, furniture and other consumer goods. Volume at Chinese ports jumped 28 percent in the first two months of 2010 as the economy improved and retailers rebuilt inventories. The container-port industry will improve this year after an “extra difficult” 2009, Li said yesterday. In retailing, the operator of drugstores in Asia and Europe will have a record year, he said. Hutchison’s retail earnings before interest and tax increased 30 percent to HK$5.69 billion, according to yesterday’s filing. In Hong Kong dollar terms, sales fell 2 percent to HK$116.1 billion. The company also runs supermarkets and electronics chains in Asia. Husky Energy Husky Energy Inc. , the Calgary-based oil producer partly owned by Hutchison, last month said full-year profit more than halved to C$1.42 billion ($1.39 billion) as sales declined because of the drop in selling prices. Hutchison’s profit was lifted by HK$12.5 billion in one- time gains from transactions, including the sale of an indirectly held controlling stake in Israel’s Partner Communications Ltd. in October and the merger of its mobile unit in Australia with the local subsidiary of Vodafone in June. At parent Cheung Kong, 2009 net income climbed to HK$19.9 billion, or HK$8.59 a share, from a restated HK$13 billion, or HK$5.63, in 2008, the world’s second-biggest builder by market value said in a statement yesterday. That beat the average HK$17.6 billion estimate of 10 analysts compiled by Bloomberg. Excluding 49.97-percent-held Hutchison, profit jumped to HK$12.8 billion from HK$6.69 billion. Cheung Kong Cheung Kong’s income rose as Hong Kong home prices jumped 29 percent last year. It booked an HK$3.86 billion gain in the fair value of real estate held for investment, compared with HK$134 million in 2008. Revenue from China jumped 76 percent. “People would focus on their China number because Hong Kong shouldn’t be any big surprise,” Adrian Ngan , a Hong Kong- based analyst at CCB International Securities Ltd., said yesterday after the announcement. Victor Li , deputy chairman of Cheung Kong and Li’s son, said at yesterday’s briefing that “demand is very strong” for Hong Kong property. Li Ka-shing said that investors should consider buying real estate if they have “excess funds” and aren’t borrowing too much. “The local property market is expected to remain stable and positive in the medium to longer term” amid low interest rates and the government’s pledge to increase land supply, Li said in the statement accompanying the earnings announcement. Li, dubbed “Superman” by Hong Kong’s media because of his track record for investing, was born in Chaozhou in the southern Chinese province of Guangdong. The plastics company he started in 1950 spawned an empire with investments in industries ranging from oil drilling to telecommunications. Forbes magazine listed Li as the world’s 14th-richest person this month, compared with 16th a year earlier, after his wealth increased 30 percent to $21 billion. To contact the reporters on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net ; Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net .
Read the original:
Li May Raise Hutchison Dividends for First Time in 10 Years on 3G Business
