Gantry cranes stand at the Kwai Tsing container terminal operated by Hongkong International Terminals Ltd, a unit of CK Hutchison Holdings Ltd, in Hong Kong, July 30, 2018. (PHOTO / BLOOMBERG)

The conglomerate founded by Hong Kong tycoon Li Ka-shing, who profited for decades by expanding in times of crisis, is hunkering down with controls on spending as geopolitics and the pandemic batter earnings.

Reporting a 29 percent drop in first-half profit, CK Hutchison Holdings Ltd warned Thursday its core ports and retail businesses may not be as profitable in the second half as they were last year

Reporting a 29 percent drop in first-half profit, CK Hutchison Holdings Ltd warned Thursday its core ports and retail businesses may not be as profitable in the second half as they were last year. The group cut its planned interim dividend, saying it needs to save cash.

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“This time, it is only right to conserve a bit of cash so we can prepare ourselves for unexpected surprises and also the war chest for potential acquisitions,” Chairman Victor Li, the founder’s son, said at a webcast briefing the same day.

The business empire built by the 92-year-old senior Li is among local conglomerates weathering multiple crises, including the global outbreak of COVID-19.

The group, whose businesses range from telecommunications and utilities to supermarkets and ports has suffered a few setbacks in recent years, including failed bids for assets in Australia and a contract in Israel. It is focused for the time being on narrowing its horizons.

In the current fiscal half year, controls on costs, investment, capital spending would be “stringent but flexible,” Victor Li said in the statement.

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The group also pointed to the difficulty in foreseeing a rebound in earnings.

“It is impossible at the present time to predict the vectors for recovery in any economic sector or, indeed, in the global economy as a whole,” the company said in the statement.

CK Hutchison’s net income fell to HK$13.2 billion (US$1.7 billion) for the six months through June, the company said. The group also lowered its planned dividend to HK$0.614 a share from HK$0.87 per share last year.

The first-half results included a HK$9.2 billion gain from the merger of its Australian phone venture with TPG Telecom Ltd.

Victor Li, who took over from his father in 2018, has had a hard time winning over investors to a sprawling group that has grown globally through acquiring big telecommunications operators and utilities.

After the pandemic-led sell-off that dragged down both the city’s benchmark Hang Seng Index and CK Hutchison’s shares in March, the index has partially recovered while the company’s stock is still trading near the year’s low. It slipped 0.7 percent Thursday to HK$50.90, and is 31 percent lower than at the start of the year.

The plunge has pared its market value to about half of net assets, the least since it was formed in a 2015 restructuring.

CK shares have underperformed the benchmark since the pandemic

Profit at the group’s listed property arm also fell as the pandemic undermined demand for residential real estate.

CK Asset Holdings Ltd’s net income dropped 58b percent in the six months ended June, the company said Thursday in a statement.

Sales for new residential real estate projects slated will likely be postponed amid the pandemic, while mass residential prices could drop as much as 10 percent this year, Jones Lang LaSalle Inc estimates.