Li Ka-shing’s CK Asset issues first profit warning as Hong Kong and UK businesses suffer, CK Hutchison says retail earnings might be halved this year

Hong Kong-based conglomerate CK Asset Holdings issued a profit warning on Thursday, its first since it was listed in 2015 as part of a restructure of Hong Kong tycoon Li Ka-shing’s Cheung Kong Holdings.

The company said lower property sales and negative contribution from its hotels division, as well as the temporary closure of its pubs in the United Kingdom in the first quarter, could “result in a material reduction to the group’s profit attributable to shareholders” for the six months ending June 30, 2020, if such a financial performance continues into the second quarter, as compared with the same period last year. CK Asset, which owns the pub company Greene King, operates 2,700 pubs, restaurants and hotels in the UK.

In a filing to the stock exchange, it said the closures had contributed to a negative contribution from its pub operations, which had been shut because of the coronavirus pandemic, while the market value of its holdings in listed real estate investment trusts had declined as of March 31.

The company reported a profit of HK$15.12 billion (US$1.95 billion) for the six months ended June 2019, down 38.8 per cent from a year ago.

“Every business and sector around the world are suffering under the current environment,” said Victor Li Tzar-kuoi, Li Ka-shing’s elder son and CK Asset’s chairman and managing director, who hosted an annual general meeting of listed flagships CK Asset and CK Hutchison Holdings on Thursday.

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He said the companies’ financial position was stable and healthy, with a gearing ratio in low single digits. “The group should be one of the most resilient companies among peers in the world,” Li said, adding that the companies would still receive an A rating from credit agencies.