“How to respond depends on the Hong Kong government. There are only a few [international financial centres], and Hong Kong has been one of them for many years. It is hard-won. We must not lose this place.”
CK Hutchison, with businesses spanning ports and infrastructure to telecommunications and supermarkets, announced an underlying profit of HK$23.5 billion (US$3 billion), a decline of 9 per cent from the HK$25.74 billion in 2022.
Including one-off items in 2022, the decrease was 33 per cent. These included gains from the disposal of UK tower assets and from the merger of its Indonesian telecoms business. That partly offset the non-cash impairments of the group’s telecoms businesses in Italy and Sri Lanka, and non-cash impairment charges of Cenovus Energy in Canada.
‘Always the first’: CK Asset’s history of foretelling property slumps
‘Always the first’: CK Asset’s history of foretelling property slumps
CK Asset’s revenue from property sales, including its share in joint ventures, fell 49 per cent to HK$13.15 billion, against HK$25.76 billion in 2022. The company attributed the decrease to the worsening economic conditions and weak property market sentiment in Hong Kong and on the mainland.
“The world’s economic landscape remains challenging [this year] and will continue to be affected by geopolitical tensions, elevated interest rates, inflationary pressure, tight monetary policy, and trade conflicts,” said Victor Li, Li Ka-shing’s elder son, in a filing from CK Asset to the Hong Kong stock exchange.
“Housing policies and interest rate movements will continue to be determining factors for the property market.” Li said. But the group is well-poised to navigate the current high interest rate environment with its low gearing ratio, ample liquidity and solid financial position, he added.
“If we had bought a lot of land during the peak four or five years ago, our gearing would not be at 3 per cent, and we may be holding quite a few projects with book values that are higher than market values. I would say this is an OK set of results.”
Regarding CK Hutchison’s prospects, Li said “the group will maintain a prudent approach to managing our businesses this year, with a strong focus on cash flow and tight management of capital expenditures and new investments”.
Hong Kong home prices won’t rebound despite property curbs withdrawal: analysts
Hong Kong home prices won’t rebound despite property curbs withdrawal: analysts
Late last month, Financial Secretary Paul Chan Mo-po scrapped all cooling measures restricting property transactions as he unveiled a budget aimed at restoring the city’s flagging fiscal health.
CK Asset is set to complete the Cheung Kong Center II office tower in Central this year, which will add 550,000 sq ft of prime office space in the city.
The new supply and increase in the office vacancy rate to 14.7 per cent in the fourth quarter of 2023 from 12.9 per cent in the previous quarter will weigh on rents, which could decline between 5 per cent and 10 per cent this year, according to Savills.
“The interest environment is high and the supply demand imbalance in Hong Kong continue to affect the office leasing market, it’s not easy,” Li said.
CK Asset declared a final dividend of HK$1.62 per share. Together with the interim dividend of HK$0.43 per share, the total payout for the year stood at HK$2.05, against HK$2.28 in 2022.
CK Hutchison declared a final dividend of HK$1.775 per share. Together with the interim dividend of HK$0.756 per share, the full year dividend totalled HK$2.531, against HK$2.926 in 2022.