Investing.com -- CK Hutchison, a telecoms-to-retail conglomerate, saw its shares fall by 3.1% in Hong Kong trade on Friday. The drop followed the release of the company’s disappointing earnings report and a reduction in its final dividend.
The group’s underlying profit fell by 11% to HK$20.8 billion ($2.7 billion) last year, falling slightly short of market expectations. This decline comes amidst the company’s ongoing struggle with Beijing’s dissatisfaction over the sale of its ports business.
CK Hutchison also announced a reduction in its final dividend, from HK$1.775 per share for 2023 to HK$1.514 per share. This announcement further contributed to the fall in the company’s share price.
The company has agreed to sell its ports business, including assets near the strategically important Panama Canal, to a consortium led by BlackRock (NYSE:BLK). The deal, criticized by Beijing, is expected to bring in more than $19 billion in cash for CK Hutchison.
Despite the significant transaction, the company made no mention of the ports deal in its earnings statement. Instead, it noted that "geopolitical and trade tensions have ... risen significantly." The company also warned that the operating environment for its businesses is expected to be both volatile and unpredictable.
In response to the challenging environment, CK Hutchison stated that it plans to limit capital spending and new investment, focusing instead on stringent cash flow management.
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