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CK Hutchison ( CKHUF ) underlying profit at HK$20.8 bln vs HK$23.5

bln

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Cancels post-earnings conferences amid Beijing ports sale

criticism

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Deal seen as betrayal, state media says

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Ports sale would reduce earnings contribution to 1% from

15%

(Adds earnings and details throughout)

By Clare Jim

HONG KONG, March 20 (Reuters) - CK Hutchison ( CKHUF )

on Thursday reported an 11% drop in underlying profit for 2024,

as one of Hong Kong's most powerful conglomerates becomes

increasingly embroiled in a political row over the sale of its

ports business to a BlackRock ( BLK )-led consortium.

The telecoms-to-retail conglomerate, owned by billionaire Li

Ka-shing, said this month it had agreed to sell most of its

global ports business, including assets near the strategically

important Panama Canal, in a deal that would garner the firm

more than $19 billion in cash.

Its shares initially rallied after the deal, with investors

cheering the high purchase price. They had expected management

would give indications at Thursday's earnings conferences about

how it would reinvest the proceeds and whether it would pay a

special dividend.

The company, however, cancelled its post-earnings media and

analyst conferences in a rare move following criticism over the

deal from the government in Beijing.

CK Hutchison ( CKHUF ) made no mention of the ports deal in its

earnings statement, although it said "geopolitical and trade

tensions have ... risen significantly."

"The operating environment for the Group's businesses is

expected to be both volatile and unpredictable," it said in the

statement.

China's Hong Kong and Macau Affairs Office has reposted two

state media commentaries depicting the deal as a betrayal of

China and contrary to its national interests, fuelling

speculation as to whether China could take steps to try to

scupper the sale.

The deal has become highly politicised, with U.S. President

Donald Trump hailing it after previously calling for the Panama

Canal to be removed from what he says is Chinese control.

CK Hutchison ( CKHUF ) has said the deal is "purely commercial in

nature and wholly unrelated to recent political news reports

concerning the Panama Ports".

Analysts have said the deal would represent a significant

strategy shift because it would leave ports contributing only

about 1% of the conglomerate's earnings before interest, tax,

depreciation and amortisation (EBITA), down from 15%.

Even before the sale, CK Hutchison's ( CKHUF ) infrastructure and

telecom businesses contributed a significant portion of the

group's profit, despite it being the world's largest privately

owned port operator.

Li has been diversifying his business outside of Hong Kong

and mainland China since the 1980s and now only about 12% of CK

Hutchison's ( CKHUF ) revenue is from Hong Kong and China, with the

remainder from Europe, the rest of Asia Pacific and Canada.

CK Hutchison ( CKHUF ) reported an underlying profit of HK$20.828

billion ($2.68 billion) for 2024, compared with HK$23.5 billion

a year earlier.

The ports deal is not yet final as the agreement is for

negotiations on an exclusive basis for 145 days.

If it materialises, ratings agency Fitch expects CK

Hutchison's ( CKHUF ) revenue, EBITDA levels and margins will decrease

slightly, but said its business lines and geographic

contributions will remain well-diversified.

($1 = 7.7713 Hong Kong dollars)