CHAIRMAN'S STATEMENT
-
THE Group's audited consolidated net profit after tax for the
year ended 31st December, 1985 was HK$1,185 million compared with HK$1,023 million earned in 1984, an increase of 16%. Earnings per share were HK$2.17 compared with HK$1.81 in 1984. In addition, the Group earned extraordinary income of HK$369 million (1984 HK$269 million) resulting mainly from the sale of shares in The Cross-Harbour Tunnel Company, Limited and Hongkong Electric Holdings Limited and realised surpluses from the sale of property.
Your directors will recommend a final dividend of 70 cents per share at the forthcoming annual general meeting. This, together with the interim dividend of 35 cents paid on 15th October, 1985, gives a total dividend of HK$1.05 for the year and represents a 25% increase on the 84 cents paid in respect of 1984.
Overall review
1985 was an eventful year for Hutchison with the Group making several significant acquisitions and invest- ments in Hong Kong. The Group completed the acquisition of a 34% shareholding in Hongkong Electric Holdings Limited in February as a long term strategic investment for a total consideration of HK$2,930 million. This share- holding was subsequently reduced to approximately 23%.
Following due notice, the Group redeemed 82.7 million of the 72% Cumulative Redeemable Participating Preference Shares on 31st December, 1985. In October, the Group acquired China Building for a combination of cash and the issue of new Hutchison ordinary shares. This acquisition of a strategically located office building in Central complements Hutchison's existing portfolio of prime investment properties.
It was also announced in October that Union Faith Company Limited, a company owned on a 50:50 basis by the Group and Hongkong Electric Holdings Limited, would make an offer to acquire all the issued shares of Inter- national City Holdings Limited (ICH) at a cash price of HK$1.01 for each ICH share of HK$1. As at 31st December, 1985, holders of 98.7% of the issued ICH shares had accepted Union Faith's offer. The remaining shares are being compulsorily acquired in accordance with the provisions of the Companies Ordinance.
In general, the Group performed well in 1985 with the exception of the bulk carrier operations and ship re- pairing which sustained losses as a result of the continuing depressed state of the shipping market. Arrangements have been completed since the year end whereby the Group no longer has any involvement in or exposure to bulk carrier operations. The cost of terminating this line of business has been treated as an extraordinary item in the 1985
accounts.
The residential sector of the property market improved during the year. Our Group has successfully sold more than 3,600 flats in the Whampoa Garden development of which 600 flats in Site 1 were completed and delivered to the owners in December, 1985. Whampoa Garden is a HK$4,000 million development project and is due for com- pletion in phases over the next four years.
Hongkong International Terminals Limited (HIT), the Group's container terminal operator, continues to perform well and handled a record throughput representing approximately 45% of the Kwai Chung container port's total volume during the year. In view of the continued growth in throughput and pressure on existing facilities and
CHAIRMAN OF
HUTCHISON WHAMPOA
LIMITED, LI KA-SHING.
"During the year, the
Group continued to
invest in support of
many of its subsidiaries
with the acquisition of
several new businesses
to complement their
existing activities."
5
HUTCHISON WHAMPOA LIMITED