Principal Activities
CK Hutchison has five core businesses - ports and related services, retail, infrastructure, energy and telecommunications.
Latest Results
The Group's profit attributable to shareholders for the year ended 31-12-2024 amounted to HKD 17.09 billion, a decrease of 27.3% compared with previous corresponding period. Basic earnings per share was HKD 4.4616. A dividend of HKD 1.514 per share was declared. Turnover amounted to HKD 281.35 billion, an increase of 2.1% over the same period last year, gross profit margin up 0.6% to 62.3%. (Announcement Date: 20 Mar 2025)
Business Review - For the year ended December 31, 2024
Ports and Related Services
This division reported revenue of HK$45,282 million, an increase of 11% compared to 2023, primarily driven by 6% higher throughput with growth across all segments, a 13% uplift in storage income and the favourable performance of a shipping line associated company. Consequently, EBITDA(1) of HK$16,172 million and EBIT(1) of HK$11,873 million, increased by 19% and 27% respectively compared to 2023, due to higher revenue as mentioned above and effective cost controls.Looking ahead to 2025, there may be headwinds with supply chain disruptions anticipated in the early part of the year due to shipping lines transitioning into their new alliances, as well as ongoing geopolitical risk impacting global trade. However, moderate organic growth is expected to continue mainly from Asia and Middle East, which together with expansion at existing terminal facilities and strengthening strategic partnerships, the division will look to deliver improvements in operating results in the coming year.
Retail
The division’s total revenue of HK$190,193 million increased by 4% in reported currency against last year, while EBITDA(2) and EBIT(2) of HK$16,395 million and HK$13,018 million both increased by 1%. In local currencies, total revenue increased by 5%, while EBITDA and EBIT both increased by 2%. Most operations in this division delivered favourable performance, except for non-ASEAN Asia regions which suffered from declined store footfall and weak consumer confidence. Excluding the non-ASEAN Asia regions, EBITDA and EBIT both achieved a strong growth of 10% in local currencies against last year.Looking ahead, the European and ASEAN Asian businesses are projected to maintain strong performance, while the Asian operations in non-ASEAN markets are anticipated to show improvement through store network optimisation and various strategic actions. Leveraging its 170 million loyalty customer base, this division will focus on deepening customer engagement and maximising lifetime value, maintaining a rapid return on investment for store openings, as well as delivering revenue growth through its online plus offline platform strategy.
Infrastructure
The Infrastructure division comprises a 75.67% interest in CK Infrastructure Holdings Limited (“CKI”), a subsidiary listed in Hong Kong as well as interests in six co-owned infrastructure investments with CKI.
CKI
Profit contributions from operating businesses reported strong growth of 10% year-on-year. However, net profit was impacted by treasury items including higher interest cost and lower foreign exchange gain, resulting in the announced net profit under Post-IFRS 16 basis of HK$8,115 million being 1% higher than last year.Looking into 2025, this division’s regulated businesses will continue to provide steady and recurring income and the non-regulated businesses will also generate good growth contributions. Together with its strong financial position, this division is well placed to capitalise on investment opportunities as they arise.
CK Hutchison Group Telecom
Revenue of CK Hutchison Group Telecom (“CKHGT”) was HK$88,371 million (10,458 million), 2% higher against last year in reported currency. EBITDA(3) and EBIT(3) of HK$24,129 million (2,855 million) and HK$3,485 million (405 million) were 8% and 54% higher than last year in reported currency, primarily due to better performance of 3 Group Europe operations.
3 Group Europe
Revenue of HK$81,710 million was 2% higher against last year in local currencies, primarily driven by moderate growth in net customer services revenue from the higher customer base and favourable revenue initiatives phased throughout the year. Revenue growth also reflects higher MVNO and other wholesale revenue. As a result of improved revenue mix, 3 Group Europe reported an overall 3% higher total margin in local currencies.
EBTIDA(4) of HK$23,122 million was 8% or HK$1,760 million higher against last year in local currencies, primarily driven by good growth in total margin. Despite continued challenges from cost inflation, operating expenses and customer acquisition spending remained stable year-on-year under tight cost control initiatives. Depreciation and amortisation increased by 3% or HK$599 million due to higher depreciation from enlarged network asset base, as well as a one-time accelerated depreciation from the swap out of certain network equipment in the Denmark operation, partly offset by the favourable variance from accelerated depreciation on the legacy IT system recognised by the UK in 2023 that did not recur in 2024. Correspondingly, EBIT(4) of HK$3,603 million was 48% or HK$1,161 million higher against last year in local currencies, reflecting primarily the higher EBITDA as mentioned.
3 UK and Vodafone UK merger approval from the competition authorities (“CMA”) was received in December 2024 and the Group is working with CMA to put in place the final undertakings in order to close the transaction with completion expected within the first half of 2025.
Looking ahead to 2025, the operations will focus on delivering stable underlying performance through growing the customer base, continuing revenue initiatives, stringent cost discipline and stabilising depreciation under tight management of capital spending. The Group will also comprehensively review ways and means of enhancing productivity and significantly reducing its operating and capital cost base. This in depth review will be completed and new targets announced during the year.
Finance & Investments and Others
This segment reported adverse EBITDA(5) and EBIT(5) results compared to last year, primarily due to the one-time non-cash impairment and other provisions on the telecommunication business in Vietnam of HK$3,740 million(6), certain treasury gains on non-core asset disposals in 2023 not recurring in 2024, as well as lower contribution from Cenovus Energy.
The Group’s 17.4% share of Cenovus Energy’s Post-IFRS 16 EBITDA, EBIT and net earnings were HK$9,311 million, HK$4,491 million and HK$3,041 million, a decrease of HK$783 million, HK$1,073 million and HK$922 million compared to last year respectively, mainly reflecting the decline in commodity prices, partly offset by increase in production volume.
The Group's telecommunications joint venture in Indonesia, Indosat Ooredoo Hutchison (“IOH”) continued to report robust revenue growth of 9%, primarily driven by an increase in data traffic and an enhanced customer experience from the expanded network, resulting in the Group’s share of IOH EBITDA increasing by 4% in reported currency. Excluding the net gains from the disposal of non- core assets in 2023 not recurring in 2024, the Group’s share of IOH’s underlying EBITDA increased 12% year-on-year, reflecting revenue growth and disciplined cost control.
The Group’s liquidity and financial profile remain strong. Consolidated cash and liquid investments totalled HK$129,445 million and consolidated total bank and other debts(7) amounted to HK$259,059 million, resulting in consolidated net debt(7) of HK$129,614 million (31 December 2023–HK$131,810 million) and net debt to net total capital ratio(7) (8) of 16.2% (31 December 2023–16.1%).
Business Outlook - For the year ended December 31, 2024
The operating environment for the Group’s businesses is expected to be both volatile and unpredictable. In such an environment, the Group will constrain capital spending and new investment and focus on stringent cash flow management. We will also task all our businesses to increase productivity and reduce operating spending, in particular through the rapid adoption of suitable emerging technology tools. Lastly our strong balance sheet and liquidity position ensure that the Group will be able to maintain a strong financial profile even in the severest of market conditions.I would like to thank the Board of Directors and all our dedicated employees around the world for their continued loyalty, diligence, professionalism and contributions to the Group.
Source: CK Hutchison (00001) Annual Results Announcement |