* Hutchison H1 net down 78 pct due to one-off gain a year earlier
* But H1 net, underlying profits beat forecasts
* Shares close down 1.15 before results announcement
* Li Ka-shing cautious on Hong Kong property market
By Donny Kwok and Alex Frew McMillan
HONG KONG, Aug 2 (Reuters) - Hutchison Whampoa Ltd , a ports-to-telecoms conglomerate owned by Asia’s richest man Li Ka-shing, reported better-than-expected first-half profits on Thursday after acquisitions boosted its UK earnings and retail sales posted healthy growth in Asia.
Li, nicknamed “superman” by local media for his deal-making savvy, might be eyeing further investments in Europe as the region’s economic woes drive down asset prices, analysts say.
His company already plans to acquire France Telecom’s Orange Austria and UK gas company Wales and West Utilities, and has signalled interest in buying a stake in Britain’s Manchester Airports Group.
“If the European and U.S. situation stays at current conditions, then the Hutchison and Cheung Kong group of companies will continue to grow over the next five years,” Li told a news conference.
Hutchison’s net profit totalled HK$10.21 billion ($1.3 billion) in January-June, down from HK$46.3 billion a year earlier when it booked a hefty one-off gain after spinning off some port assets, it said in a statement on the Hong Kong stock exchange.
The result beat the average forecast for a net profit of HK$9.39 billion in a Thomson Reuters poll of five analysts.
Excluding exceptional items and property valuations, Hutchison reported an underlying profit of HK$9.83 billion for the first half, higher than analysts’ average forecast of HK$9.17 billion and up from HK$8.715 billion posted a year earlier.
Hutchison’s businesses span from commercial properties in Hong Kong and China to telecommunications in Britain and energy in Canada.
In telecommunications, Hutchison competes with Britain’s biggest mobile operator, Everything Everywhere — a joint venture of France Telecom SA’s Orange and Deutsche Telekom AG’s T-Mobile. It also competes with Telefonica SA’s O2 and Vodafone Group Plc.
The company said its subsidiary Cheung Kong Infrastructure Holdings received a profit contribution from its recently acquired British utility Northumbrian Water Group, while it also benefited from investments in other UK utilities.
Although Europe’s economic conditions were dire, Hutchison said it managed to post strong growth in its retail sales in Asia, where it expanded the number of its stores.
But the performance of Husky Energy in Canada and Vodafone Hutchison — its telecom joint venture in Australia — disappointed in the first half. Husky Energy’s output was hit by maintenance work, while Vodafone Hutchison’s loss widened.
Alex Wong, a director at Ample Finance Group, noted shares of some Hong Kong blue-chip companies that have reported forecast-beating earnings have failed to hold up due to weak market sentiment.
“Hutchison and Cheung Kong may follow a similar path as investors are still not convinced of a better second half, especially Hutchison has quite a big exposure in Europe.”
Shares of Hutchison fell 1.15 percent to HK$68.60 prior to the results, while the Hang Seng Index declined 0.66 percent. Hutchison shares have risen 5.5 percent so far this year, compared with a 6.8 percent decline in the benchmark average.
Separately, Cheung Kong (Holdings) Ltd, Hong Kong’s second-biggest property developer and which holds a controlling stake in Hutchison, posted a 54 percent decline in first-half profit to HK$15.46 billion.
Cheung Kong property sales decreased in the first half compared with the same period last year due to a reduced number of developments, it said in a separate statement.
Profit before investment property revaluation and the impact of Hutchison Whampoa was down 9 percent at HK$7.6 billion, it said.
“We will not decrease investments in Hong Kong property, but the market will be relatively tough,” said Li, who is also chairman of Cheung Kong.
Li struck a cautious note about Hong Kong real estate, where the government has pledged to bring prices under control and increase supply.
Danie Schutte, an analyst at CLSA Asia-Pacific Markets, said the property business booked more sales in the first half of the year than expected.
“It’s a good number,” he said. “They surprise you in the first half and they might surprise you in the second half.”