Cheung Kong Infrastructure Net Rises 15% on Expansion

By Winnie Zhu and Wang Ying

Aug. 14 (Bloomberg) -- Cheung Kong Infrastructure Holdings Ltd., a roads and utility company owned by billionaire Li Ka- shing, said first-half profit rose 15 percent, helped by contributions from its overseas business and a power unit.

Net income climbed to HK$2.33 billion ($298 million), or HK$1.03 a share, from HK$2.02 billion, or HK$0.90 a share, a year earlier, the company said in a statement to the Hong Kong stock exchange today. That's lower than the median estimate of HK$2.363 billion in a Bloomberg survey of three analysts.

Cheung Kong Infrastructure has acquired gas, water and road assets in Australia, China and the U.K. to counter slowing growth in the domestic power distribution market. The company's 39 percent-owned unit, Hongkong Electric Holdings Ltd., said Aug. 5 profit rose 18 percent to HK$3.17 billion on earnings from overseas operations and a one-off tax gain.

``With a strong portfolio of investments, Cheung Kong Infrastructure is well-placed to continue its growth momentum,'' Cheung Kong Infrastructure said in today's statement. Sales, including those from jointly controlled businesses, gained 16 percent to HK$3.18 billion. The company gets about half of its profit from Hongkong Electric.

The Hong Kong-based company has ``ample resources'' to pursue new acquisitions, it said. It has cash-on-hand of HK$8.9 billion.

Cheung Kong Infrastructure agreed to buy a power network in New Zealand's capital from Vector Ltd. for NZ$785 million ($540 million), Vector said in April. The company in October planned to acquire Canada's TransAlta Power LP for about C$629 million ($591 million).

The utility has also benefited from higher permitted return from its Zhuhai power plant this year than in 2007 and a one-off HK$118 million disposal gain after selling the Fushun facility in mainland China, Citigroup Inc. analysts Pierre Lau and Maggie Mok wrote in a note on Aug. 1.

The shares fell by 0.14 percent to HK$36.75 as of the midday break. The shares have gained 26 percent this year, compared to a 24 percent drop in the benchmark Hang Seng Index.

To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.netWang Ying in Beijing at ywang30@bloomberg.net.