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One-off disposal gains and fewer losses in its third-generation (3G) business lifted Hutchison Whampoa's earnings last year.
Hutchison, owned by tycoon Li Ka-shing, booked net profits of HK$30.6 billion last year, up 53 percent from 2006.
The company reported a HK$35.8 billion one-off gain on the disposal of its India mobile business, Hutchison Essar.
Total revenue of the company went up 15 percent to HK$308.8 billion, thanks to robust port business and contributions from its oil arm, Husky Energy. The Canadian oil and natural-gas company reported net earnings of C$3.2 billion (approximately HK$24.5 billion), up 18 percent.
3 Group, which operates Hutchison's 3G wireless business, achieved positive earnings before interest, taxes, depreciation and amortization (EBITDA) in the second half of last year for the first time ever. The full-year EBITDA turned into the black, too, bringing in HK$1.2 billion, compared with a HK$7.5 billion loss a year before.
Li said the company's 3G business is on the verge of making substantial profits.
"It's quite hard to do the business," Li said, "but the picture will be totally different in 2009-10. "3G will no longer be a burden, but rather a fast-growing business."
In the meantime, 3G operations continued to drag Hutchison's earnings last year, reporting a loss before interest and taxes of HK$17.9 billion, compared with a HK$20 billion in 2006.
"Hutchison once again boosted its profits through disposal gains," said Castor Pang, a strategist at Sun Hung Kai Financial.
Hutchison has long been known as a deal maker, buying and selling assets to make money.
But he said he is not that optimistic about the 3G business this year.
The average revenue per user (ARPU) declined substantially last year. 3 Group's customer base increased 20 percent last year, and it currently stands at over 17.6 million, but the ARPU dropped by 9 percent to 41.74 euros (HK$509).
"I am afraid the group's EBITDA may turn negative again as the competition in Europe will put pressure on the ARPU," Pang said, adding that Hutchison may need to partly sell its Husky Energy stake to maintain a decent profit growth this year.
"At this time, I have no plan to sell assets," Li said, adding that: "If I get an excellent offer tomorrow, of course I will look into that".
Instead, the company is now looking for valuable assets to buy. Acquisitions are likely to become more attractive amid the turndown of the global markets, Li said.
Hutchison will pay a final dividend of HK$1.22 a share, the same as it paid last year. Some investors complained the payout ratio doesn't match the earnings growth.
Li said he would raise the dividends if the 3G business turns profitable.
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