HONG KONG (Bloomberg) -- Hutchison Telecommunications International Ltd., the emerging markets mobile-phone carrier controlled by billionaire Li Ka-shing, said first-half profit fell on lower one-time gains from asset disposals.

Net income dropped to HK$1.17 billion ($149 million), or 24 Hong Kong cents a share, from HK$70.1 billion, or HK$14.59, a year earlier, the Hong Kong-based company said in a statement to the city’s stock exchange on Tuesday. Sales from continuing operations rose 22 percent to HK$11.8 billion.
Chief Executive Officer Dennis Lui, 57, has said the company will invest in emerging markets to revive earnings growth after the sale of its largest unit, India’s Hutchison Essar Ltd., boosted last year’s first-half earnings with a one- time gain of HK$69.3 billion. The company told shareholders it will return surplus cash unless an acquisition is made this year.
“While valuations have come down, a lot of people are also looking, and many of them have cash,” Francis Cheung, CLSA Ltd.’s head of telecommunications research, said before the earnings. “But there isn’t anything they can buy easily.” Cheung rates Hutchison Telecom shares “outperform.”
The MSCI Emerging Markets Asia/Telecommunication Services Index, which tracks 25 phone companies in the region, has fallen 28 percent this year and is trading at its lowest level since 2006, based on estimated earnings.
------Bolster growth
Hutchison Telecom, in which Li’s Hutchison Whampoa Ltd. owns 59 percent, joins regional carriers including Singapore Telecommunications Ltd. and Telekom Malaysia Bhd in seeking emerging-market phone assets to bolster earnings as growth in domestic operations stall.
The Hong Kong company may pay a special dividend if the company is unable to make an acquisition by the end of this year, Lui said in May.
“Price expectations for emerging market telecom assets have not been significantly dampened,” Hutchison Telecom said in the statement. The company is not optimistic about making a purchase in the second half of this year, the statement said.
Hutchison Telecom had HK$37.2 billion in cash and equivalent by the end of June, the company said on Tuesday. Last year, the carrier used about $4.1 billion of the $10.7 billion proceeds from selling its 67 percent stake in Hutchison Essar, now renamed Vodafone Essar, to Vodafone Group Plc to pay a special dividend.
India’s third-biggest mobile carrier accounted for 72 percent of Hutchison Telecom’s operating profit in 2006.
-----Operating profit
Operating profit at Hutchison Telecom’s units in Hong Kong and Macau rose 8.3 percent to HK$417 million in the first half, the statement said. The total number of wireless customers in the two markets rose to 2.6 million at the end of June, compared with 2.52 million in the previous quarter.
Hutchison Telecom, which rose 1.5 percent to HK$9.95 in Hong Kong trading before the announcement, has declined 15 percent this year, compared with a 25 percent drop in the city's benchmark Hang Seng Index.
Hutchison Telecom shares, which rose 1.6 percent to HK$9.96 as of 2:39 p.m. in Hong Kong trading on Tuesday, has declined 15 percent this year, compared with a 25 percent loss in the city’s benchmark Hang Seng Index.
The company will hold a press conference at 4:30 p.m. in Hong Kong to discuss the first-half earnings.