CK Hutchison : UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017

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HK$ millions

For the six months ended 30 June 2016

HK$ millions Change

Local currency change

Total Revenue (1) 190,053 180,511 +5% +9%

Total EBITDA (1) 45,311 44,256 +2% +7%

Total EBIT (1) 30,012 29,469 +2% +7%

Profit attributable to ordinary shareholders before profits on disposal of investments

& others 15,892 15,228 +4% +10%

Profits on disposal of investments & others 27 (307) +109% Profit attributable to ordinary shareholders 15,919 14,921 +7%

Recurring earnings per share (2) HK$4.12 HK$3.95 +4%

Earnings per share (3) HK$4.13 HK$3.87 +7%

Interim dividend per share HK$0.780 HK$0.735 +6%

1. Total revenue, EBITDA and EBIT include the Group's proportionate share of associated companies and joint ventures' respective items.

2. Recurring earnings per share is calculated based on profit attributable to ordinary shareholders before profits on disposal of investments and others, after tax.

3. Earnings per share is calculated based on profit attributable to ordinary shareholders.

The global economic environment has shown modest signs of recovery in the first half of 2017, with less volatility in commodity prices, currencies and interest rates, alongside modest growth in major economies. Although the Group remained subject to adverse foreign currency translation effects during the half, particularly in Sterling, these were to some extent offset by stabilising economic conditions in all major markets. As a result, the Group continued to deliver year on year recurring earnings growth in both reported currency and local currencies.

Both EBITDA and EBIT increased 2% in reported currency and 7% in local currencies compared to the same period last year. Accretive contributions from the Wind Tre joint venture and various acquisitions made by the Infrastructure division during 2016 and 2017 mainly contributed the year on year growth, as well as improvements in the performance of Husky Energy from the more stable oil prices, partly offset by the lower contribution from telecommunication operations in Asia.

Recurring profit attributable to ordinary shareholders before profits on disposal of investments and others in the first half of 2017 was HK$15,892 million, an increase of 4% in reported currency and 10% in local currencies. Recurring earnings per share in the first half of 2017 was HK$4.12, compared to HK$3.95 in the same period last year.

Profits on disposal of investments and others after tax in the first half of 2017 was a profit of HK$27 million representing the Group's 50% share of operating results 1 , after consolidation adjustments, of Vodafone Hutchison Australia ("VHA") which has reported improved performances in the period. This is compared to a charge of HK$307 million recorded in the first half of 2016 that included an impairment charge on certain non-core investments held by the ports operation of HK$577 million, the Group's 50% share of VHA's operating losses of HK$328 million and partially offsetting a marked-to-market gain upon acquisition of additional interest in an existing port operation of HK$598 million.

Profit attributable to ordinary shareholders for the first half of 2017 increased 7% to HK$15,919 million from HK$14,921 million for the first half of 2016.

The Board declares an interim dividend of HK$0.780 per share (30 June 2016 - HK$0.735 per share), payable on Thursday, 14 September 2017, to shareholders whose names appear on the Register of Members of the Company at the close of business on Tuesday, 5 September 2017, being the record date for determining shareholders' entitlement to the interim dividend.

1 The Group's 50% share of VHA's operating results continued to be included under "Others" of the Group's profits on disposal of investments and others line as VHA continues to operate under the leadership of Vodafone under the applicable terms of our shareholders' agreement since the second half of 2012.

The ports and related services division handled throughput of 41.1 million twenty-foot equivalent units ("TEU") through 276 operating berths in the first six months of 2017, a 3% increase compared to the same period in 2016, mainly due to steady volume growth in Mainland China and Hong Kong, Barcelona and Pakistan, partly offset by volume reduction in Rotterdam, Jakarta and Dammam. Although this division's underlying performance has improved year on year, its results were adversely affected by foreign currency translation effects with total revenue of HK$16,195 million, being flat against the same period last year and EBITDA decreased 1% to HK$5,706 million. In local currencies, revenue and EBITDA increased 3% and 2% respectively, primarily driven by higher throughput. EBIT decreased 3% to HK$3,623 million in reported currency, but remained flat against the same period last year in local currencies as the EBITDA improvements were offset by the higher depreciation charge from recent expansions of several ports and facilities.

This division will continue to focus on strict cost discipline and improvements in productivity, and is expected to benefit in the second half from a continuing modest recovery in global trade.

At 30 June 2017, the retail division had over 13,500 stores across 24 markets. Total reported revenue of HK$73,557 million was flat, while EBITDA and EBIT of HK$6,527 million and HK$5,232 million respectively, were 1% and 2% lower against the same period last year due to adverse foreign currency translation effects. In local currencies, revenue, EBITDA and EBIT increased by 3%, 3% and 1% respectively. The Health and Beauty segment reported solid growth including some improvements in trading conditions in the Mainland. However, the profitability of retail operations in Hong Kong continued to be under pressure from declines in visitors and in local demand, as well as higher rental and wage costs.

The Health and Beauty segment which contributed 94% of the division's EBITDA, reported solid growth in revenue, EBITDA and EBIT of 7%, 3% and 2% respectively in local currencies. In Europe, comparable stores sales growth was 2.7% with particularly strong operating performances from Health and Beauty UK and Rossmann.

In Asia, trading conditions generally improved. The Health and Beauty operations in Asia reported solid comparable store sales growth of 3.2% in the period. Health and Beauty China, the largest profit contributor to this division, reported a 6.2% negative comparable stores sales decline in mature stores. Encouragingly, this comparable store sales decline has recovered from the negative 10.1% for the full year 2016 and has also showed continuing improvement with the decline narrowed to negative 2.7% in the second quarter this year. Despite the tough retail conditions, Health and Beauty China still maintained a 21% EBITDA margin, reinforcing the sustainable profitability of the operation even under challenging environments.

The retail division plans to continue expanding its store network through organic growth in the second half of 2017, as well as focusing on developing big data analytics capabilities to complement its extensive global store network.

The Infrastructure division comprises a 75.67%2 interest in CK Infrastructure Holdings Limited ("CKI"), a company listed on the Stock Exchange of Hong Kong ("SEHK") and the Group's interests in six co-owned infrastructure investments with CKI. The aircraft leasing business, previously reported under this division, was sold in December 2016.

Total revenue, EBITDA and EBIT of this division of HK$25,918 million, HK$15,841 million and HK$11,949 million respectively were 5%, 5% and 3% lower than last year due to adverse foreign currency translation impact and the sale of the aircraft leasing business. In local currencies, total revenue, EBITDA and EBIT grew by 2%, 2% and 4% respectively, as the division continued to acquire stable and accretive businesses globally.

CKI

CKI announced profit attributable to shareholders of HK$5,657 million, 3% higher than HK$5,511 million reported for the same period last year, which includes the accretive contributions from the acquisition of DUET Group in May 2017 and Husky Midstream Limited Partnership in July 2016. The result was achieved despite the Sterling reduction of over 10% compared to the first half of 2016, as well as the one-off gain on disposal of Spark Infrastructure Group in June 2016.

In July 2017, CKI entered into an agreement with Cheung Kong Property Holdings Limited to acquire a 25% interest in CKP (Canada) Holdings Limited, with its subsidiaries principally engaged in building equipment services business in Canada and the United States, for a consideration of approximately C$715 million. Completion of the transaction is subject to approval of independent shareholders of Cheung Kong Property Holdings Limited.

In July 2017, CKI and Cheung Kong Property Holdings Limited entered into an agreement to acquire 100% interest in ista Luxemburg GmbH, a fully integrated energy management services provider in Europe. CKI's maximum financial commitment will be €1,575 million. Completion is subject to the approvals by independent shareholders of both CKI and Cheung Kong Property Holdings Limited, as well as regulatory approvals. Upon completion, CKI will hold 35% interest in the target company.

Husky Energy, our associated company listed in Canada, announced a net loss of C$22 million in the first half of 2017, a 97% improvement from a net loss of C$654 million in the first half of 2016. The improvement was mainly due to higher Upstream commodity prices, higher contribution from the increased production of higher margin thermal developments in Western Canada and the Liwan Gas Project in Asia Pacific, partly offset by an after-tax impairment charge3 of C$123 million on certain Upstream legacy assets in Western Canada.

2 Based on the Group's profit sharing ratio in CKI.

3 As the Group rebased Husky Energy's assets to their fair values in the 2015 Reorganisation, the impairment charge recognised by Husky Energy in the first half of 2017 has a lower impact to the Group's results.