长和(00001) - 2023 - 中期业绩

Chairman's Statement Performance Overview and Dividends In the first half of 2023, the Group faced challenges including a strong US dollar and rising production costs amidst global economic slowdown, inflation, and geopolitical instability, resulting in a profit decline compared to 2022 which included one-off gains 2023 First Half Key Financial Indicators (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Reported Currency) | Change (Local Currency) | | :--- | :--- | :--- | :--- | :--- | | EBITDA | 49,933 | 58,244 | -14% | -11% (Excluding one-off items -3%) | | EBIT | 27,467 | 34,515 | -20% | -18% (Excluding one-off items -4%) | | Profit Attributable to Ordinary Shareholders | 11,009 | 17,740 | -38% | -36% | | Underlying Profit Attributable to Ordinary Shareholders | 11,009 | 12,602 | -13% | -10% | - The Board declared an interim dividend of HKD 0.756 per share for 2023, a 10% decrease from HKD 0.840 per share in the same period of 2022[2][4] - Key challenges faced by the Group include a persistently strong US dollar, rising production costs (especially energy-intensive telecom businesses in Europe and the UK), and the absence of one-off gains in the current period[3] Performance by Business Segment Business segment performance varied, with strong retail recovery in Europe and Asia, declining port throughput, slight infrastructure profit reduction due to interest rates and exchange rates, and significant telecom profit decline due to cost increases and prior-year one-off gains - Ports business: Throughput decreased by 7% year-on-year, with total revenue, EBITDA, and EBIT declining by 12%, 20%, and 27% respectively, primarily due to lower export cargo volumes and reduced storage income[5] - Retail business: In local currency, total revenue, EBITDA, and EBIT grew by 7%, 20%, and 28% respectively, driven by strong recovery in European and Asian operations[6] - 3 Group Europe: EBITDA decreased by 10% year-on-year in local currency, mainly due to new tower service fees in the UK, higher energy costs, and other inflationary pressures[10] - Hutchison Telecommunications Asia: EBITDA significantly decreased by 75% year-on-year, primarily due to a one-off net gain of HKD 5.1 billion from the merger of Indonesian operations recorded in the same period of 2022[12] - Finance & Investments: Contribution from Cenovus Energy decreased due to lower commodity prices, partially offset by gains from non-core asset disposals and treasury income[13] Sustainability The Group released its fourth Sustainability Report, setting its first group-wide emission reduction targets to halve Scope 1 and 2 emissions by 2035 and achieve net-zero value chain greenhouse gas emissions by 2050 - The Group set its first emission reduction targets: to halve Scope 1 and 2 emissions by 2035 and achieve net-zero value chain emissions by 2050[14] - Ports, Retail, and Telecom divisions are committed to Science Based Targets initiative (SBTi), with Retail and CKHGT already validated[14] - The Group addresses sustainability challenges through innovation and collaboration, such as the Retail division joining the EcoBeautyScore Consortium and 3 Ireland launching a device recycling program[14] Outlook The economic environment is expected to remain challenging in the second half of 2023 with ongoing inflation and growth deceleration risks, though recurring operating performance is anticipated to improve despite the absence of significant one-off gains compared to 2022 - The economic situation in the second half is expected to remain challenging, with risks of persistent inflation and slowing growth[15] - The Group's full-year operating outlook remains resilient, with downturns in some businesses offset by strong recoveries in others[15] - Compared to over HKD 10 billion in one-off gains recorded in 2022, the Group does not anticipate realizing significant net one-off gains this year[15] Financial Performance Summary Financial Performance Summary (Post-IFRS 16) Under IFRS 16, the Group's total revenue for the first half of 2023 was HKD 223.9 billion, a 3% year-on-year decrease, with EBITDA and EBIT also declining, and profit attributable to ordinary shareholders significantly down by 41% due to high prior-year one-off gains 2023 First Half Financial Performance Summary (Post-IFRS 16, HKD million) | Indicator | 2023 First Half | 2022 First Half | Change % | | :--- | :--- | :--- | :--- | | Total Revenue | 223,867 | 229,616 | -3% | | Total EBITDA | 61,151 | 70,525 | -13% | | Total EBIT | 29,613 | 37,648 | -21% | | Profit Attributable to Ordinary Shareholders | 11,208 | 19,088 | -41% | Financial Performance Summary (Pre-IFRS 16) Based on the management-focused Pre-IFRS 16 basis, the Group's total revenue for the first half of 2023 was HKD 223.9 billion, a 3% year-on-year decrease (1% increase in local currency), with EBITDA, EBIT, and profit attributable to ordinary shareholders all showing declines 2023 First Half Financial Performance Summary (Pre-IFRS 16, HKD million) | Indicator | 2023 First Half | 2022 First Half | Change % | Change % in Local Currency | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 223,867 | 229,616 | -3% | +1% | | Total EBITDA | 49,933 | 58,244 | -14% | -11% | | Total EBIT | 27,467 | 34,515 | -20% | -18% | | Profit Attributable to Ordinary Shareholders | 11,009 | 17,740 | -38% | -36% | Operations Review Ports and Related Services In the first half of 2023, the Ports and Related Services division saw a 7% year-on-year decrease in throughput to 39.3 million TEUs, primarily due to weaker export cargo volumes and global consumer demand, leading to double-digit declines in revenue, EBITDA, and EBIT Ports and Related Services First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 19,863 | 22,651 | -12% | | EBITDA | 6,509 | 8,273 | -20% | | EBIT | 4,337 | 6,042 | -27% | | Throughput (million TEUs) | 39.3 | 42.4 | -7% | - The decline in throughput was mainly due to weak exports from China to Europe and the US, and reduced cargo demand in European ports due to high inflation, partially offset by growth in Shanghai port from a low base in the prior period[20] - Reduced port congestion led to a general decrease in storage income across major ports, further impacting divisional revenue[20] Retail The Retail division demonstrated strong performance in the first half of 2023, with local currency growth of 7% in total revenue, 20% in EBITDA, and 28% in EBIT, primarily driven by the health and beauty segment's 11.3% comparable store sales growth Retail First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 88,619 | 84,905 | +7% | | EBITDA | 7,056 | 6,030 | +20% | | EBIT | 5,420 | 4,331 | +28% | | Number of Stores | 16,164 | 16,244 | -1% | | Comparable Store Sales Growth | +7.2% | +7.4% | N/A | - The health and beauty segment was the core of growth, accounting for 97% of the division's EBITDA, with its local currency EBITDA increasing by 22%[22][23] - Regional performance: European health and beauty comparable store sales grew by 11.3%; Asia grew by 16.8%; Mainland China saw a modest growth of 2.0%[24] Infrastructure The Infrastructure division, primarily comprising interests in Cheung Kong Infrastructure (CKI), maintained stable revenue in the first half of 2023, with a slight 1% EBITDA decrease and 2% EBIT increase, while CKI's profit declined 4% due to interest rates and exchange rates but grew 4% in local currency Infrastructure First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 27,540 | 27,600 | +4% | | EBITDA | 14,681 | 14,864 | +4% | | EBIT | 10,041 | 9,851 | +7% | - Profit attributable to CKI shareholders was HKD 4.239 billion, a 4% year-on-year decrease, mainly due to increased finance costs and unfavorable foreign exchange movements[27] - CKI maintains a strong financial position, holding HKD 12 billion in cash as of June 30, 2023, with a net debt to net total capital ratio of 9.3% and an "A/Stable" credit rating[28] CK Hutchison Group Telecom The CKHGT division's first-half revenue remained stable, but EBITDA and EBIT significantly declined by 20% and 86% respectively, primarily due to reduced contributions from 3 Group Europe and adverse foreign currency revaluation CKHGT First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 41,761 | 41,817 | +3% | | EBITDA | 10,019 | 12,512 | -18% | | EBIT | 335 | 2,474 | -88% | - 3 Group Europe's total active customer base increased by 2% year-on-year to 39.9 million, primarily driven by the UK business[10][30] - The decline in 3 Group Europe's EBITDA was mainly due to three factors: new tower service fees in the UK (approximately HKD 0.6 billion), increased energy and inflation costs (approximately HKD 1 billion), and higher network expansion costs[10][30] - The Group has agreed to merge 3 UK with Vodafone UK (Group holding 49% stake) and establish a wholesale communications joint venture in Italy (Group holding 40% stake), both pending regulatory approvals[11] Hutchison Telecommunications Asia Hutchison Telecommunications Asia's first-half 2023 performance was severely impacted by one-off items in the prior year, with reported EBITDA and EBIT significantly declining by 75% and 88% respectively, primarily due to a HKD 6.1 billion gain from the Indonesian business merger in 2022 Hutchison Telecommunications Asia First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 5,775 | 5,839 | +3% | | EBITDA | 1,877 | 7,572 | -74% | | EBIT | 723 | 6,047 | -87% | | Total Active Customers (million) | 122.5 | 115.1 | +6% | - The significant decline in performance was primarily due to the inclusion of a HKD 6.1 billion gain from the completion of the Indonesian telecom business merger and a non-cash impairment of HKD 0.962 billion for the Sri Lankan business in the first half of 2022[45] - The Indonesian joint venture IOH performed strongly, with total revenue growing by 9.5% and underlying EBITDA (Post-IFRS 16) increasing by 24%, driven by customer growth and increased data traffic[45] Finance & Investments and Others This segment performed well, with EBITDA and EBIT growing by 9% and 15% respectively, as gains from non-core asset disposals, higher money market deposit rates, and increased contributions from Hutchison Whampoa China effectively offset reduced contributions from Cenovus Energy Finance & Investments and Others First Half Performance (Pre-IFRS 16) | Indicator | 2023 First Half (HKD million) | 2022 First Half (HKD million) | Change (Local Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | 40,309 | 46,804 | -10% | | EBITDA | 9,791 | 8,993 | +13% | | EBIT | 6,611 | 5,770 | +17% | - The Group's share of Cenovus Energy's EBITDA contribution was HKD 4.132 billion, a 47% year-on-year decrease, primarily due to lower commodity prices and production disruptions[47] - As of June 30, 2023, the Group held cash and marketable investments totaling HKD 146.735 billion, with consolidated net debt of HKD 139.193 billion, and a net debt to net total capital ratio of 17.0%[13] Interim Financial Statements Independent Auditor's Review Report PricewaterhouseCoopers reviewed the Group's interim financial statements for the six months ended June 30, 2023, in accordance with Hong Kong Standard on Review Engagements 2410, finding no material matters suggesting non-compliance with HKAS 34 - PricewaterhouseCoopers, the auditor, issued a review conclusion on the interim financial statements, stating no material issues were found indicating non-compliance with Hong Kong Accounting Standard 34[51] Condensed Consolidated Income Statement For the six months ended June 30, 2023, the Group's revenue was HKD 133.377 billion, largely flat year-on-year, but profit before tax decreased from HKD 24.810 billion to HKD 15.718 billion due to a significant reduction in other income and gains and increased interest expenses, leading to a 41% decline in profit attributable to ordinary shareholders Condensed Consolidated Income Statement (Unaudited, HKD million) | Indicator | 2023 First Half | 2022 First Half | | :--- | :--- | :--- | | Revenue | 133,377 | 131,358 | | Share of Profits of Associates/Joint Ventures | 7,800 | 10,783 | | Profit Before Tax | 15,718 | 24,810 | | Profit After Tax | 14,343 | 22,604 | | Profit Attributable to Ordinary Shareholders | 11,208 | 19,088 | | Earnings Per Share (HKD) | 2.93 | 4.98 | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets slightly increased to HKD 1,158.834 billion, while total liabilities slightly decreased to HKD 496.548 billion, resulting in an increase in net assets (total equity) to HKD 662.286 billion, with non-current assets, goodwill, and interests in associates and joint ventures being major components Condensed Consolidated Statement of Financial Position Summary (Unaudited, HKD million) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Non-current Assets | 947,070 | 924,162 | | Current Assets | 211,764 | 224,275 | | Total Assets | 1,158,834 | 1,148,437 | | Current Liabilities | 144,457 | 176,515 | | Non-current Liabilities | 352,091 | 324,613 | | Total Liabilities | 496,548 | 501,128 | | Total Equity | 662,286 | 647,309 | Condensed Consolidated Cash Flow Statement In the first half of 2023, the Group's net cash generated from operating activities was HKD 21.191 billion, lower than the prior year, with net cash used in investing activities of HKD 6.047 billion and net cash used in financing activities of HKD 24.489 billion, leading to a HKD 9.345 billion decrease in cash and cash equivalents, ending the period at HKD 128.740 billion Condensed Consolidated Cash Flow Statement Summary (Unaudited, HKD million) | Indicator | 2023 First Half | 2022 First Half | | :--- | :--- | :--- | | Net Cash from Operating Activities | 21,191 | 28,034 | | Cash Flows Used in Investing Activities | (6,047) | (14,375) | | Cash Flows Used in Financing Activities | (24,489) | (54,477) | | Decrease in Cash and Cash Equivalents | (9,345) | (40,818) | | Cash and Cash Equivalents at End of Period | 128,740 | 112,315 | Notes to the Financial Statements The notes to the financial statements provide detailed explanations and supplementary information on interim financial statement items, covering accounting policies, segment information, asset and liability breakdowns, contingent liabilities, related party transactions, and fair value measurements Note 5: Operating Segment Information This note details the Group's operating performance by its four core business segments—Ports, Retail, Infrastructure, and Telecom—along with Finance & Investments, showing stable or growing EBITDA contributions from Retail and Infrastructure, while Ports and Telecom faced challenges, particularly Hutchison Telecommunications Asia due to high prior-year one-off gains Segment EBITDA Contribution (Pre-IFRS 16, HKD million) | Segment | 2023 First Half | 2022 First Half | Percentage of Total (2023) | | :--- | :--- | :--- | :--- | | Ports and Related Services | 6,509 | 8,273 | 13% | | Retail | 7,056 | 6,030 | 14% | | Infrastructure | 14,681 | 14,864 | 29% | | CK Hutchison Group Telecom | 10,019 | 12,512 | 20% | | Hutchison Telecommunications Asia | 1,877 | 7,572 | 4% | | Finance & Investments and Others | 9,791 | 8,993 | 20% | | Total | 49,933 | 58,244 | 100% | - The note explains why management presents both Pre- and Post-IFRS 16 data, considering the former more reflective of the Group's underlying operating performance and used for internal decision-making[73] Note 24: Bank and Other Debts As of June 30, 2023, the Group's total principal amount of bank and other debts was HKD 282.3 billion, with HKD 239.2 billion being long-term, primarily consisting of notes and bonds (69%), and a balanced maturity profile over the next five years Total Principal Amount of Bank and Other Debts (HKD million) | Category | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Portion | 43,142 | 70,206 | | Long-term Portion | 239,158 | 213,401 | | Total | 282,300 | 283,607 | Note 33: Contingent Liabilities and Guarantees As of June 30, 2023, the Group provided total guarantees of HKD 4.902 billion for bank and other borrowings of its associates and joint ventures, of which HKD 4.612 billion was utilized, in addition to HKD 5.277 billion in performance and other guarantees - Total guarantees for bank and other borrowings provided to associates and joint ventures amounted to HKD 4.902 billion[145] Group Capital and Other Information Treasury, Cash Management and Risk Control The Group's centralized treasury department manages financial risks to mitigate interest rate and exchange rate fluctuations, avoiding speculative derivative transactions, while maintaining investment-grade credit ratings and utilizing interest rate swaps and local currency borrowings for risk management - Interest Rate Risk: As of June 30, 2023, approximately 30% of the Group's debt was floating rate and 70% fixed rate, after accounting for interest rate swaps[165] - Foreign Exchange Risk: The Group operates in over 50 countries, with major exposures to Euro and Sterling; 47% of 2023 first-half EBITDA came from Europe (of which 20% from the UK), and 55% of consolidated net debt was in Euro, 3% in Sterling[167] - Credit Ratings: The Group maintains long-term credit ratings of Moody's A2, S&P A, and Fitch A-, all with a "stable" outlook[169] Liquid Assets, Cash Flow and Debt Position As of June 30, 2023, the Group held HKD 146.7 billion in liquid assets, with 88% in cash and cash equivalents, demonstrating a robust financial position, while maintaining a healthy net debt to total capital ratio of 17.0% despite total debt of HKD 285.9 billion - Total liquid assets amounted to HKD 146.735 billion, with cash and cash equivalents accounting for 88%, US Treasury bills and other listed bonds for 4%, and listed equity securities for 8%[171] - The net debt to net total capital ratio (Pre-IFRS 16) was 17.0%, largely consistent with 16.7% at the end of 2022, indicating stable financial leverage[177] Debt Principal Amount Maturity Distribution (June 30, 2023) | Maturity Period | Percentage | | :--- | :--- | | Remaining 2023 | 10% | | 2024 | 17% | | 2025 | 11% | | 2026 | 12% | | 2027 | 10% | | 2028 and Beyond | 40% | Other Information As of June 30, 2023, the Group employed 172,622 staff, maintained compliance with all applicable Listing Rules on corporate governance, and had its interim financial statements reviewed by PricewaterhouseCoopers and the Audit Committee, reaffirming its core objective of enhancing long-term shareholder returns - As of June 30, 2023, the Group (including subsidiaries) had a total of 172,622 employees[180] - The company complied with the Corporate Governance Code during the reporting period and explained its co-managing director governance structure[181] - The interim financial statements were reviewed by PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410[183]