The largest diversified infrastructure company listed on the Hong Kong Stock Exchange, Cheung Kong Infrastructure Holdings (CKI), has reported 26 percent annual net profit growth yesterday, due to a strong mainland portfolio performance last year.

Although profits of CKI's local investments traced an evident downturn in 2009, the strong momentum of its mainland and overseas investments countered the loss, which has encouraged the company to further explore markets outside the city.

The utilities and roads company said its net profit for 2009 rose to HK$5.57 billion from the previous year's HK$4.42 billion.

Together with the interim dividend, total dividend recommended for the year was HK$1.20, a 5.8 percent increase over 2008.

The overall profit gain was mainly due to its investments in the mainland, which brought in a total HK$1.72 billion last year, up 29 percent from the year earlier.

In February 2009, the group sold its three power plant assets in Guangdong and Jilin provinces to its affiliate Hongkong Electric Holdings (HKE) for HK$5.68 billion.

CKI said it generated a one-off gain of HK$1.31 billion from the disposal.

Kam Hing-lam, group managing director of CKI, said earnings from HKE continued to be the largest contributor to the company, which contributed over 42 percent of the total profit to the group in 2009. However, the city's second largest electric supplier recorded a 17 percent decrease in profits compared to the previous year.

The group also invests in Australia, the UK, Canada, the Philippines, and New Zealand, besides Hong Kong and the mainland, with businesses ranging from electricity generation to water and natural gas supply.

Kam said a strong cash position of over HK$10 billion will well position the group in considering large-scale acquisitions. It is currently studying potential targets and will continuously seek to acquire additional overseas businesses to offset slowing growth in the power distribution market in Hong Kong.

Chief Operating Officer Andrew Hunter said at the media briefing that the company will put in a bid for Electricite de France (EDF)'s three power distribution businesses in the UK by March.

"These assets produce predictable and steady returns. These sorts of regulated and monopolized business are exactly what CKI is familiar with and interested in," said Hunter.

Gary Chiu, an analyst at HSBC Securities Asia in Hong Kong said the group "already has assets in the UK and knows the business environment there. It's a highly regulated and mature market, which suits the company's low-risk strategy."

CKI last year achieved more than doubled profits in Canada and New Zealand, and a 12 percent profit gain in its UK business. Its Australian businesses recorded a 5 percent drop, due to the tumbling Australian dollar in 2009.

(HK Edition 03/05/2010 page2)