UK assets bolster CK Infrastructure
Cheung Kong Infrastructure on Thursday reported a 18 per cent rise in interim net profit mainly on the strength of its UK portfolio, which includes Northumbrian Water, the FTSE 250 utility taken over by the Hong Kong company for £2.41bn in October.
Victor Li, chairman, said the company was well-positioned to make further acquisitions as it had HK$8bn in cash and a 7 per cent net debt-to-equity ratio.
“A challenging economic landscape may also create opportunities. Acquisition prospects for quality assets often arise during periods of instability. Backed by our strong financial platform, we will continue to seek acquisitions that further enhance our asset base and income stream,” he said in a statement.
CKI’s debt gearing was lower than the 14.3 per cent in the previous financial year, according to Bloomberg data. The same measure for Centrica, a UK energy group, was 65 per cent last year and for National Grid, 220 per cent.
“The results exceeded my expectations. They must have improved operational efficiency and cost management at their UK assets,” said David Dai, utilities analyst at Daiwa Securities in Hong Kong. The company said Northumbrian Water’s profits beat its own forecast while its UK power business benefited from cost cutting, higher revenue and a tax reduction.
CKI is an affiliate of Cheung Kong Holdings, headed by Victor’s father Li Ka-shing. The company has been snapping up UK utilities as the senior Mr Li repeatedly says that he favours the stable environment offered by developed, Commonwealth economies. Less than a year before CKI bought Northumbrian Water, it had paid £5.8bn for EDF’s UK power grids as part of a consortium.
The company said net profit for the six months to June reached HK$4.7bn and it would pay an interim dividend of HK$0.40 per share, 10 per cent more than the previous year.
Its UK portfolio contributed just over half of CKI’s pre-tax profit in the period. The company did not comment on an unconfirmed report last month that it might invest in Manchester Airports Group.
Victor Li, chairman, said the company was well-positioned to make further acquisitions as it had HK$8bn in cash and a 7 per cent net debt-to-equity ratio.
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CKI’s debt gearing was lower than the 14.3 per cent in the previous financial year, according to Bloomberg data. The same measure for Centrica, a UK energy group, was 65 per cent last year and for National Grid, 220 per cent.
“The results exceeded my expectations. They must have improved operational efficiency and cost management at their UK assets,” said David Dai, utilities analyst at Daiwa Securities in Hong Kong. The company said Northumbrian Water’s profits beat its own forecast while its UK power business benefited from cost cutting, higher revenue and a tax reduction.
CKI is an affiliate of Cheung Kong Holdings, headed by Victor’s father Li Ka-shing. The company has been snapping up UK utilities as the senior Mr Li repeatedly says that he favours the stable environment offered by developed, Commonwealth economies. Less than a year before CKI bought Northumbrian Water, it had paid £5.8bn for EDF’s UK power grids as part of a consortium.
The company said net profit for the six months to June reached HK$4.7bn and it would pay an interim dividend of HK$0.40 per share, 10 per cent more than the previous year.
Its UK portfolio contributed just over half of CKI’s pre-tax profit in the period. The company did not comment on an unconfirmed report last month that it might invest in Manchester Airports Group.
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