CK Hutchison Holdings Limited

On a pre-IFRS 16 basis, underlying revenue increased 7%, with about 4% of that driven by favorable FX. Pre-IFRS 16 net earnings increased 6%, and reported net earnings increased 7%; management said this translated into reported EPS growth. Underlying operating free cash flow was HKD 30.635 billion, and underlying free cash flow was HKD 7.705 billion, after HKD 3.7 billion of investments in associates and joint ventures. Reported free cash flow was HKD 58.3 billion, up 88% year on year. Consolidated net debt to total capital was 8.1%, with liquidity of about HKD 187 billion and net debt of about HKD 64 billion; pro forma net debt would be under HKD 20 billion, or about 2.5%, after the VodafoneThree proceeds. In the Ports division, throughput was 43.6 million TEUs, down 1%, and EBITDA was HKD 9.03 billion, up 4% reported. Retail EBITDA was HKD 8.68 billion, up 9% reported. Telecoms EBITDA for 3 Group Europe declined 5% in local currency, but was flat in reported currency because of FX. Guidance-wise, management expects Ports to achieve earnings growth for 2026 as a whole, Retail to deliver modest growth for the year, and Telecoms to see second-half improvement from cost and productivity initiatives, including AI tools and agents.

Frank Sixt stressed that the group is focused on underlying performance rather than one-off gains, pointing to asset sales, the UK telecom transaction, and other nonrecurring items as reasons reported comparisons are messy. He repeatedly framed the business as well diversified and financially flexible, but said capital deployment decisions will be handled prudently because the operating and geopolitical backdrop remains uncertain. He also said management is actively evaluating potential realignment and value-enhancing restructuring across CKH, CKI and CKA, but has not made decisions yet.

Kwan Hoi Cheung said liquidity improved to about HKD 187 billion, with net debt of about HKD 64 billion and a net debt-to-net total capital ratio of 8.1% at June 30. He highlighted that the group's average cost of debt was 3.3%, 63% of debt was fixed after swaps, and 61% was in bonds and notes. He also said pro forma net debt would be under HKD 20 billion and pro forma leverage about 2.5% after the GBP 4.3 billion VodafoneThree proceeds, underscoring a very strong balance sheet and manageable 2026 refinancing needs.

Investors asked how the group would deploy its enlarged cash position and whether higher dividends or buybacks are likely; management said it is too early, that board-level capital allocation must consider EPS, cash flow per share, credit metrics and returns, and that updates should come with full-year results. On the Panama terminal, management said it does not believe an impairment is required and that legal challenges are ongoing because it strongly disagrees with the state action. On Telecoms, management said it is watching European consolidation closely and is open to in-market deals, but nothing actionable is on the table yet. Management also said it is not planning to reduce its Cenovus stake because it views that holding as an earnings and inflation hedge.