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Hutchison Whampoa Releases Annual Results

LONDON, March 26 /PRNewswire/ -- Hutchison Whampoa Limited today issued the following:

CHAIRMAN'S STATEMENT

The Group's audited consolidated net profit after tax for the year ending December 31, 1996 was US$1,555 million compared with US$1,238 million earned in 1995, an increase of 25.6%. Earnings per share were US43 cents compared with US34 cents in 1995.

Your directors will recommend a final dividend of US13.97 cents per share at the forthcoming Annual General Meeting. This together with the interim dividend of US5.43 cents paid on October 18, 1996, gives a total dividend of US19.40 cents per share for the year and represents a 27.1 increase on the US15.27 cents paid in respect of 1995.

Overall Review

The Group Continued its growth during 1996 with the five core businesses achieving solid results in challenging market conditions. The property market showed a significant recovery during 1996 and, with an increase in purchasing power, this upward trend has continued into 1997.

The Group's rental income is showing steady growth as the property investment portfolio continues to expand. The portfolio will be further enlarged when the first phase of the new office tower, which is being built on the site of the former Hongkong Hilton Hotel is completed in 1998. The entire redevelopment of this site will be completed in the year 2000. The land premium for this development has already been paid and work in progressing on schedule. Profits generated from property development have declined in relation to previous years as a result of the South Horizons and Laguna City developments having been completed. However, the increase in income from our investment portfolios and other sectors of the Group more than offset the reduction in contribution from the property development sector. Since the beginning of last year, Further progress was made in replenishing the Group's land bank through acquisitions which include 50% interests in sites at Hung Shui Hiu and Tung Chung as well as the right to construct a commercial complex which will serve as a screen between the newly to be developed Container Terminal No. 9 and nearby residential complexes. The new development projects acquired to date in Hong Kong, together with our existing projects in China, provide the potential for future growth in profitability.

While throughput growth at our container terminal operations at Kwai Chung slowed in line with the downturn in Hong Kong's export performance, headway continued to be made in improving operational efficiency and strengthening relationships with international shipping lines. During the year, Hongkong International Terminals Limited was awarded the rights to develop, commission and operate two berths at Terminal 9 on Tsing Yi Island. In addition, a consortium in which the Group has a 33% interest has acquired the right to develop a site in Tuen Mun into a new river trade container handling facility. In the UK, the Group's port facilities at Felixstowe performed well and our joint venture container port operations in China also continued to make steady progress. The new container port which is being developed in phases at Yantian has grown rapidly since commencing operations in 1995 and as a result, Construction of the second phase, 3-berth facility has already begun. In line with the Group's strategy to further enhance its container terminal operations and profitability, steps have also been taken to expand the Group's container operations internationally through investments in port operations in the Bahamas, Myanmar, Indonesia and Panama Container terminal opportunities in other countries are also being considered.

During the year, A S Watson & Co. Made solid progress and further expanded its retailing presence in Asian markets in addition to strengthening its retailing and Manufacturing activities in China. Through improved efficiencies and cost controls, this division was able to record a strong increase in profit. Park 'N Shop continued to establish its operations in China, while Watson's personal care stores bolstered its position as the largest such retailing network in Asia. The addition of new product lines together with improved customer service helped Fortress to achieve increased profits. The Group will maintain its policy of selective expansion of its retail operations.

1996 was a significant year for the Group's telecommunications businesses in Hong Kong with the virtual completion of the change over from two limited capacity analogue systems to two digital systems with substantially greater subscriber capacity. The overall capacity has been further increased with the awarding of a Personal Communications Services (PCS) license to the Group. While profitability was down as a result of operating duplicate systems the change over is now virtually complete and has resulted in a substantially increased subscriber capacity. During the year, the businesses continued to build on strong foundations by consolidating resources, enhancing service standards and expanding subscriber base. The Group's cellular telephone subscriber base, which now stands at approximately 340,000, has tripled since the end of 1995 and the prospects for continued growth are encouraging. The establishment of Hutchison Telecommunications (Hong Kong) Limited has improved operational resources for mobile telephone, paging and fixed-line network services. Steady progress has also been made on the infrastructural development of the Network Eight fixed-line service. The PCS license which was awarded in July will provide additional spectrum for subscriber growth the years ahead as well as allow the Group to introduce a variety of new products and services.

In the UK, the Orange plc business continued its rapid growth with the subscriber base more than doubling that of the previous year to now stand at approximately 888,000. Orange has acquired an impressive 11% share of the overall UK market since the launching of its wirefree network. The flotation of Orange was completed in April, at which time the Group's effective interest was reduced to 48.22%. This has subsequently been increased to 49.02% as a result of the recent acquisition of additional shares in the company from British Aerospace.

Husky Oil performed very well during the year and steady progress was also made in its ongoing drilling and exploration program. In addition, Husky obtained an investment grade rating through two international rating agencies and successfully refinanced its debt on a stand alone basis.

The Group's overall strategy is to continue to expand its core businesses in Hong Kong, China and elsewhere, particularly in Asia. As part of its overall strategy, the Group also seeks to enlarge its current income base and to maximize the coordination of its businesses. The recent re-organization saw the consolidation of the Hongkong Electric group shareholding into its subsidiary, Cheung Kong Infrastructure. This will further enable the Group to focus on its core businesses in China and the region. The Group is most active in China in the areas of port operations, property development, infrastructure, power generation, manufacturing and retailing.

During 1996 we witnessed a gradual recovery in Hong Kong's economy with rallies in both the stock market and property sectors. This recovery is likely to be further enhanced in the months ahead with expected increases in China's exports and imports. Hong Kong will maintain its pre-eminent regional role given the on-going strengthening of economic ties between itself and China. The Group has complete confidence in the future of Hong Kong. Against that background, the Group is committed to continue developing its core businesses in markets with good potential and in those areas in which it has the resources and expertise. With its solid base of recurrent quality income, strong cash flow and financial position, the Group is well-positioned to move forward to the next century with confidence.

Mr. Charles Lee resigned as director on March 12 to devote himself to his public duties. Mr. Albert Chow Nin Mow will resign as a director with effect from April 30, 1997 for personal reasons. I would like to thank both gentlemen for their services and the valuable contributions they have made to the Group.

I also wish to thank the Board of Directors and all the employees of the Group for their support, dedication and hard work throughout the year.

Li Ka-shing

Chairman
 Hutchison Whampoa Limited
 Summary of Results
 for the year ended 31 December 1996
 1996 1995
 US$ Millions US$ Millions
 Turnover 4,743 4,531
 Operating Profit 810 844


Share of profits less losses
 of associated companies 470 505
 Exceptional items 530 98
 Profit before taxation 1,810 1,447


Taxation

Hong Kong
 Company and subsidiaries 72 66
 Associated companies 42 57


Overseas
 Company and subsidiaries 26 11
 Associated Companies 29 13
 Profit after taxation 1,641 1,300
 Minority interests 86 62


Profit Attributable
 to the Shareholders 1,555 1,238
 Dividends 738 552
 Profit for the Year Retained 817 686
 Earnings per Share US 43 Cents US 34 Cents
 Dividends per Share US 5.43 Cents US 4.27 Cents
 Interim US 13.97 Cents US 11.00 Cents
 Final US 19.40 Cents US 15.27 Cents


Notes:

1. Included in operating profit is an amount of US$0.9 million

(1995 - US$90.9 million) transferred from properties revaluation

reserves upon disposal of the relevant properties.

2. The exceptional item arose from the global offering and subsequent

listing of shares of Orange plc in April which reduced the Group's

holding in the company from 68.42% to 48.22%. The resultant gain to

the Group, after providing for estimated losses to be incurred by

Orange in building the business, amounted to US $530.4 million.

3. Hong Kong profits tax has been provided for at the rate of 16.5%

(1995 - 16.5%) on the estimated assessable profits for the year less

available tax losses. Overseas taxation has been provided for at the

applicable rate on the estimated assessable profits less available tax

losses.

4. The calculation of earnings per share is based on profit attributable

to shareholders and on the weighted average of 3,616,784,011 shares in

issue during 1995 (1995 - 3,614,332,483 shares). Fully diluted

earnings per share is not shown as the dilution is not material.

SOURCE Hutchison Whampoa Limited
 -0- 03/26/97


/CONTACT: Chris Markham of Hill and Knowlton, Inc., 212-885-0482/

CO: Hutchison Whampoa Limited ST: IN: SU: ERN

MP -- NYW043 -- 7456 03/26/97 10:03 EST http://www.prnewswire.com
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