HONG KONG, March 22: Hutchison Whampoa Ltd is expected to report a 14 to 20 per cent rise in 1997 net profit on exceptional gains later this week, with telecommunications the major growth area in its core businesses, analysts said.The Hong Kong-based blue chip conglomerate is seen posting a net profit of between HK$13.75 billion and HK$14.4 billion for the year ended December 31, 1997, against HK$12.02 billion in 1996, they said. The results are due out on Thursday.
"I think if you look through their results you will see very large exceptional gains again in 1997, that is one of the dominant features last year," said John Hetherington, at Paribas Asia Equity.
Hetherington forecast HK$ 13.75 billion net profit for Hutchison in 1997, of which exceptional gains accounted for HK$5.0 billion. The exceptional gain include the disposal of part of its shares in Asia Satellite Telecommunications Holdings Ltd, and profit from transferring its 35.01 per cent interest in Hong Kong Electric Holdings Ltd to CheungKong Infrastructure Holdings Ltd, he said.
It also includes the sale of some of its stake in Procter & Gamble-Hutchison Ltd to joint venture partner Procter & Gamble Co and the sale of 420 places at a car park at the Provident Centre. One analyst at a regional brokerage said he expected Hutchison to see profit grow to HK $14.4 billion. "They have got very good recurring income and also they have some property projects and contributions from the telecommunications sector and rental income from the investment portfolio," he said. Hutchison, which is 49.91 per cent owned by Cheung Kong(Holdings) Ltd , would contribute more than HK$8.3 billion to Cheung Kong's profit, he added. Strong growth was seen in telecommunications, with Hutchison occupying about 30 per cent of Hong Kong's cellular service market, analysts said. Telecommunications should contribute about HK$500 million to operating profit in 1997, after taking into account the loss for Orange Plc, said Desmond Cheung at OCBC Securities.
Hutchison has a49 per cent stake in the London listed mobile telephone company Orange, which posted a 139.1 million pounds pretax loss in 1997 versus a loss of 229 million pounds in 1996. Cheung forecast Hutchison would post an annual net profit of HK$ 14.0 billion for 1997."It was mainly boosted by exceptionals, and in core businesses only the growth in telecommunications was higher while others were just fairly up."
He also saw reasonable profit growth in Hutchison's shipping terminals in Hong Kong, China and overseas."In its port business, it should see between 11-12 per cent growth to HK$4.67 billion in consolidated income," he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
