CK Hutchison (0001) investor relations material

Executive summary

• Underlying revenue grew 7% year-over-year to HK$241.6bn, with 4% of growth attributed to favorable foreign exchange movements; total revenue rose 6% to HK$255.4bn.

• Underlying net earnings increased 7% to HK$12.6bn, while reported net earnings surged to HK$26.8bn due to significant one-off gains from disposals of UK Power Networks, UK Rails, and UK Telecom.

• Major asset sales, including UK Power Networks, UK Rails, and the UK Telecom interest, significantly impacted reported results but are excluded from underlying performance analysis.

• Group liquidity reached HK$186.9bn, with net debt dropping to HK$63.7bn and a net debt to total capital ratio of 8.1%, expected to fall further post-VodafoneThree transaction.

• Interim dividend per share was HK$0.7455, up 5% year-over-year, with dividend policy aligned to underlying earnings growth.

Financial highlights

• Underlying EBITDA rose 6% to HK$56.5bn; reported EBITDA jumped 77% to HK$79.7bn, reflecting disposal gains.

• Operating free cash flow declined 10% to HK$19.9bn due to investments in associates and JVs, but free cash flow soared 88% to HK$58.3bn, driven by one-off disposals.

• Dividend per share was HK$0.7455, up from HK$0.71 in the prior period.

• Net debt to total capital at 8.1%, with average cost of debt at 3.3% and 63% of debt fixed-rate.

• Interest coverage: EBITDA covers net interest expenses 58.3 times.

Outlook and guidance

• Ports division expects earnings growth for 2026, despite geopolitical risks and the Panama expropriation.

• Retail anticipates modest to full-year growth, focusing on loyalty expansion, technology adoption, and sustainability.

• Infrastructure businesses remain strong and predictable, positioned for future growth after major UK asset disposals.

• Telecoms focus on cost reduction, AI adoption, and product expansion to improve profitability in the second half.

• Operating environment expected to remain challenging due to geopolitical tensions, inflation, and softening demand in some segments.