Peak-hour traffic passes through the Lane Cove Tunnel, which is 40 percent owned by Cheung Kong Infrastructure Holdings Ltd, in Sydney, Australia. The company has been expanding its overseas presence and seeking overseas investment to counter slower growth in local market. Bloomberg

Cheung Kong Infrastructure Holdings (CKI), which reaped favorable first-half earnings from investment in Hong Kong Electric Holdings and infrastructure projects around the world, said its net profits jumped 15 percent during the first half of this year.

Net income rose to HK$2.3 billion, or HK$1.03 a share, from HK$2 billion, or HK$0.90 a share, in the first half of 2007, the company said yesterday. Its turnover rose to HK$3.18 billion in the six months ended June 30 this year, up by 16 percent from a HK$2.74 billion a year earlier.

CKI, the infrastructure arm of tycoon Li Ka-shing's Cheung Kong Holdings, owns power, gas, water and road assets in Australia, China, and the UK. It earns half of its profits from Hong Kong Electric, the city's second largest electricity supplier.

Hong Kong Electric, which is 39 percent owned by CKI, said last Tuesday its profits had risen 18 percent to HK$3.17 billion on earnings from overseas operations and a one-time tax gain.

The utility company contributed HK$1.24 billion profits to the CKI in the first half, up by 21 percent from a year earlier.

CKI Chairman Victor Li told reporters at a press conference yesterday that, with a strong portfolio of investments, the company is well placed to continue its growth momentum.

"Seventy-five percent of our power business on the mainland is unaffected by rising coal prices and power price caps, as we have got our returns guaranteed in agreements," he said.

Earnings from the group's energy business in Australia was up by 3 percent to HK$448 million, while earnings from its water and gas business in the UK surged 59 percent to HK$271 million.

Energy and toll road projects on the mainland added HK$487 million in profits, to the group's revenue, an increase of 5 percent year-on-year.

Encouraged by past experiences, Li said, the company is interested in purchasing operations with double-digit internal rate of return.

He added that CKI has been actively seeking overseas investment to counter slower growth in local markets, because "the economic slowdown provides a favorable environment for acquisitions".

CKI agreed in April to buy Vector Ltd, a power network in New Zealand, for $540 million. Vector gets most of its earnings from its power and gas networks in Auckland, where it also runs telecommunication services.

The Hong Kong-based group planned last year to acquire Canada's TransAlta Power LP for about $591 million.

The group has also benefited from higher permitted return from its Zhuhai power plant this year than in 2007 and a one-off HK$118 million disposal gain after selling the Fushun facility in Liaoning province.

Shares in CKI dropped 1.49 percent yesterday to close at HK$36.25.

(HK Edition 08/15/2008 page2)