Financial Data and Key Metrics Changes - Revenue for the first half of 2024 increased compared to the same period in 2023, with a notable 9% decrease in earnings, attributed to tax changes rather than operational performance [2][3] - EBITDA and EBIT both rose by 5%, with EBITDA increasing by HKD2.3 billion and EBIT by HKD1.4 billion [4] - Operating free cash flow decreased by HKD600 million compared to the first half of 2023, while free cash flow increased by 17% year-on-year to HKD8.9 billion [4][9] Business Line Data and Key Metrics Changes - The ports business saw a 7% increase in throughput to 42.3 million TEUs, with EBITDA rising by 22% to HKD7.938 billion [16][17] - The retail division faced challenges, with EBITDA flat at HKD7.089 billion, impacted by a 19% decline in comparable sales in Health and Beauty China [20][21] - CKH Group Telecom reported a revenue increase of HKD1.2 billion (3%) and an EBITDA increase of HKD800 million (8%) [27] Market Data and Key Metrics Changes - Contributions from Hong Kong and Mainland China decreased, while ports and telecoms businesses showed growth [5] - The retail division's performance varied significantly between regions, with double-digit growth in ASEAN markets contrasted by declines in non-ASEAN regions [20][50] Company Strategy and Development Direction - The company aims to maintain a conservative financial profile while exploring value-accretive transactions and capital deployment for shareholder returns [55] - CKI's recent acquisitions in renewables align with the group's ESG objectives, indicating a strategic focus on sustainable investments [26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in the ports sector, expecting moderate growth despite potential softness in Q4 due to front-loading by shippers [19][40] - The retail division is implementing initiatives to improve performance in Hong Kong and China, while maintaining growth in Europe and ASEAN markets [24][50] Other Important Information - The company reported a flat net debt ratio year-on-year, with a strong liquidity profile and an average cost of debt at 3.6% [14][15] - HUTCHMED's oncology products revenue grew by 59%, indicating a positive trend in its biopharma development [35] Q&A Session Summary Question: Is share buyback still a possibility? - The company remains open to share buybacks but chose not to execute them in the first half of 2024 to preserve a conservative financial profile [38] Question: Can you elaborate on the strong performance of ports? - The ports division experienced continued growth, with major ports in Mexico, Pakistan, and the U.K. showing double-digit growth [39][40] Question: Are you confident that CMA will approve the proposal for U.K. Vodafone merger? - While overconfidence is unwise, the company believes the merger will strengthen competition in the U.K. mobile sector [41][42] Question: Will CKH consider a secondary listing in London? - There are currently no plans for a secondary listing, as the focus is on completing CKI's second listing [44] Question: What is the financial performance of A.S. Watson? - A.S. Watson performed well globally, except in non-ASEAN Asian markets, with a long-term positive outlook for the China retail market [47][48] Question: What is the outlook for the group's health and beauty sales? - Health and beauty sales in Asia are expected to maintain growth, driven by strong performance in ASEAN markets [50][51]
CKH HOLDINGS(CKHUY) - 2024 Q2 - Earnings Call Transcript