REG - Jardine Matheson Hdg - Half Year Results
28/07/2022 13:45
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RNS Number : 0676U Jardine Matheson Hldgs Ltd 28 July 2022
28th July 2022
For immediate release
The following announcement was issued today to a Regulatory Information
Service approved by the Financial Conduct Authority in the United Kingdom.
Jardine Matheson Holdings Limited
Half-Year Results for the Six Months ended 30th June 2022
STRONG RECOVERY CONTINUES, UNCERTAINTY REMAINS IN CHINA
Highlights
· Underlying profit of US$747 million for the period, up 22% against the prior
year
· Underlying earnings per share of US$2.60, up 40% against 2021
· Performance of most businesses improves, with strong growth in Southeast Asia,
particularly by Astra, and further contribution from simplification of the
Group's holding structure
· Hong Kong and Chinese mainland businesses impacted by continuing pandemic
restrictions
· DFI Retail profit reduced by performance of associates and investment in
e-commerce
· Interim dividend at US¢55, up 25%, reflecting a rebalance towards interim as
well as strong earnings per share growth.
"There was a strong improvement in the Group's profitability in the first half
compared with the same period last year, with a significantly improved
performance in Southeast Asia, particularly by Astra, and a further
contribution to growth from the simplification of the Group's holding
structure. The Group expects, however, that earnings growth will
substantially moderate for the full year, as COVID-19 continues to impact the
Group's businesses, particularly in Hong Kong and on the Chinese mainland.
On behalf of the Board, I would like to thank all our colleagues across the
Group for their continuing dedication, hard work and professionalism during
such challenging times.
The Group has a strong balance sheet and will continue to focus on
opportunities in its core, growing markets of Asia to create sustainable
long-term growth."
Ben Keswick, Executive Chairman
Results
(unaudited) ( )
Six months ended 30th June
2022 2021 ( ) Change
US$m US$m %
Gross revenue including 100% of associates and joint ventures 55,994 52,488 +7
Revenue 18,277 17,492 +4
Underlying profit* attributable to shareholders 747 615 +22
Profit/(loss) attributable to shareholders 423 (117) n/a
Shareholders' funds(#) 29,228 29,781 -2
US$ US$ %
Underlying earnings per share* 2.60 1.86 +40
Earnings/(loss) per share 1.47 (0.35) n/a
Net asset value per share(#) 101.00 102.87 -2
US¢ US¢ %
Interim dividend per share 55.00 44.00 +25
* The Group uses 'underlying profit' in its internal financial reporting to
distinguish between ongoing business performance and non-trading items, as
more fully described in note 7 to the condensed financial statements.
Management considers this to be a key measure which provides additional
information to enhance understanding of the Group's underlying business
performance
# At 30th June 2022 and 31st December 2021, respectively. Net asset value per
share is based on the book value of shareholders' funds.
The interim dividend of US¢55.00 per share will be payable on 12th October
2022 to shareholders on the register of members at the close of business on
19th August 2022 and will be available in cash with a scrip alternative.
CHAIRMAN'S STATEMENT
Overview
The Group's underlying net profit for the first half was US$747 million, 22%
higher than the same period last year, and returning to the levels seen prior
to the onset of the pandemic. Within this, 13 percentage-points of growth
was driven by improved business performance, with the balance reflecting a
higher share of earnings in businesses formerly owned by Jardine Strategic
Holdings Limited ('JSH'), following the completion in mid-April 2021 of the
privatisation of JSH (the 'Group Simplification').
There were improved performances from most of the Group's businesses in the
first half of 2022, compared with the same period last year, with particularly
strong growth in Southeast Asia, led by Astra. Jardine Cycle & Carriage
('JC&C'), the Group's Motors business and Hongkong Land also saw increases
in underlying profit, and Mandarin Oriental delivered a lower underlying loss
than the same period last year.
DFI Retail Group ('DFI') saw a decline year-on-year in the performance of
their businesses, impacted by the resurgence in the first half of the pandemic
on the Chinese mainland and in Hong Kong. The absence of Chinese mainland
tourists also continued to impact the performance of the Group's businesses in
Hong Kong, including Hongkong Land's Central retail portfolio, DFI's health
and beauty business and Mandarin Oriental's hotels.
The Group continues to benefit from its diversified exposure to the key growth
markets of Asia, with the different pathways of China and Southeast Asia
across the pandemic bringing resilience to our earnings and growth. The
strong performance of the Group's businesses in Southeast Asia in the first
half of 2022 led to 58% of the Group's profit for the period coming from
Southeast Asia and 37% coming from China.
Underlying earnings per share increased by 40% to US$2.60. Just over half of
this growth (+24 percentage-points) reflected impacts of the Group
Simplification, combining the effect on underlying net profits of a higher
share of earnings, as above, with the reduction in the effective share count
in Jardine Matheson Holdings Limited (the 'Company') following the elimination
of the cross-shareholding held by JSH in the Company, which concluded in May
2022 and has now, therefore, fully annualised.
Group revenue for the period was 4% higher at US$18.3 billion, while gross
revenue, including 100% of associates and joint ventures, was up 7% at US$56.0
billion.
The Group recorded a non-trading net loss in the first half of US$324 million,
compared with a non-trading net loss of US$732 million in the first half of
2021. This was as a result of a net decrease of US$148 million in the fair
value of the Group's other investments, the impairment of goodwill and
investment in associates of US$114 million, and a net fair value loss of US$70
million upon the semi-annual revaluation of investment properties in Hongkong
Land as at 30(th) June 2022. The Group recorded a profit attributable to
shareholders for the period of US$423 million, compared with a loss of US$117
million in the first half of 2021.
Dividend
The Board has announced an interim dividend of US¢55 per share, an increase
of 25% over the prior year. This reflects both the strong EPS growth in the
first half of the year and the Board's decision to revert to a higher
proportion of the total dividend for the year to be paid at interim as the
effects of the pandemic and the impacts of the Group Simplification recede.
Significant Developments
The first half of the year continued to demonstrate the importance of the
Group applying innovation and adaptability in its business approach. The
pace of change continues to accelerate, however, so we need to further drive
forward our strategic priorities in the second half of the year.
Evolving the Group Portfolio
The Group remains focussed on evolving its portfolio by deploying and, where
appropriate, recycling capital towards strategic higher growth initiatives.
During the first half, Astra purchased a 5.43% stake in PT Medikaloka Hermina
Tbk, one of the largest hospital groups in Indonesia, operating as Hermina
Hospitals, which has an established brand in women's and children's care.
In February 2022, a joint venture was announced between Astra, Hongkong Land
and LOGOS, a leading modern warehousing expert, to expand logistics facilities
across Indonesia.
Astra continues to invest in digital businesses in Indonesia, and in the
period it acquired an interest in Paxel, a technology-based logistics startup,
and increased its investments in Sayurbox, an e-commerce grocery farm-to-table
platform and Mapan, a digital community-based social financing platform. In
July 2022, Astra subscribed for a 49.56% stake in PT Bank Jasa Jakarta ('Bank
Jasa Jakarta') for US$260 million, to support Astra Financial Services'
business development and digital offering. The transaction is subject to
satisfaction of conditions precedent and regulatory approval.
During the period, Hongkong Land secured a 34% interest in a primarily
residential site in Xuhui District in Shanghai, adjacent to the group's
existing 1.1 million sq. m. mixed-used project in West Bund. It also
acquired a 49% interest in a residential site in the Tanjong Katong area in
Singapore, with a developable area of 599,000 sq. ft.
In July 2022, JC&C announced a general offer to acquire the remaining
shares in Cycle & Carriage Bintang, which it did not already own.
JC&C also increased its interest in Refrigeration Electrical Engineering
Corporation ('REE') in the period through on-market purchases.
In July 2022, United Tractors announced a share buyback of up to US$333
million.
Also in July 2022, Mandarin Oriental announced the sale of its Washington DC
hotel for gross proceeds of US$139 million. This sale is consistent with the
Group's strategy of driving future growth primarily through development of its
management business. The Group has an exciting pipeline of hotels worldwide
in locations and properties which support its long-term vision for the brand.
Driving Innovation and Operational Excellence
The Group also continues to focus on driving innovation and operational
excellence in our businesses and in new ventures we undertake. Despite the
challenging market environment, our businesses continued to introduce greater
efficiency and productivity.
We have been embedding innovation-thinking across our businesses, underscored
by events such as Digital Day and LearnFest, where innovation-related themes
are central to the agenda.
DFI's yuu coalition loyalty programme continues to exceed expectations and now
has more than four million members. It has built partnerships with a range
of complementary businesses, including Maxim's restaurants, insurance partners
and, most recently, in February 2022, a fuel partner. In May 2022, yuu-to-me
was launched, offering customers an integrated one-stop online shopping
experience across leading Hong Kong brands on a single mobile app.
The Group remains focussed on making efficiency improvements across its
existing businesses to drive future growth. Good progress has been made in a
number of businesses, including JEC, HACTL, Jardine Restaurants and Gammon, to
implement measures in areas such as procurement, shared resources and
operations. HACTL has, for example, increased its capacity to handle pallets
by 30% by enhancing its use of robotics, as well as introducing automation
more generally to increase efficiency. The Group has also begun
implementation of an in-house Global Business Services function, to serve the
growth and technology needs of its subsidiary businesses.
Enhancing Leadership and Entrepreneurialism
Jardines continues its work to create a diverse and inclusive culture where
everyone can succeed. During the period, we launched a new diversity and
inclusion ('D&I') strategy to help progress our ambitions across the
Group. New initiatives included a learning campaign on inclusive leadership,
a comprehensive review to enhance HR policies and new processes which support
D&I. We have also developed targets for increasing female representation
in our workforce and leadership. We recognise further progress needs to be
made to achieve our objectives.
The Group is working hard to support the growth of the next generation of
leaders within our businesses, ensuring our colleagues can develop the skills
they need.
We are also aiming to create an owner mindset among our staff, and supporting
this by enhancing our incentive structures to focus less on current profits
and more on value creation over a longer time horizon. This longer-term view
also incentivises experimentation and innovation.
The Group's Investment and Business Development Committee ('IBDC') is
accelerating decision-making and helping us establish and support new teams,
as well as bringing focus to specific project investment proposals. The IBDC
also references macro trends to identify new opportunities to grow and serve
our customers across Asia.
Progressing Sustainability
The Group has made substantial progress in driving its sustainability agenda
and increasing visibility of the extensive range of activity taking place
across our businesses.
An important milestone in the Group's sustainability journey was the
publication of our inaugural Sustainability Report at the end of June. This
followed extensive work over the past year to set appropriate metrics and
gather data from each of our businesses, to enable the Group to measure and
report on progress in implementing the sustainability agenda. Eight other
Group businesses also published sustainability reports during the first half,
three for the first time.
The Group demonstrated its commitment to addressing climate change and
promoting decarbonisation, by publishing a statement in June 2022 clarifying
its support for a Just Energy Transition to a low carbon economy in the
geographies where we operate. The statement contains commitments to scale up
investments in renewable energy and related innovations; diversify into
non-coal mineral mining, and make no investments in new thermal or
metallurgical coal mines or new thermal coal-fired power plants.
In addition, the Company and JC&C published TCFD-aligned disclosures in
their sustainability reports.
The Group-wide colleague volunteering programme which was launched at the end
of last year, to facilitate participation by colleagues across the Group in a
range of social inclusion and other activities, continues to gather momentum.
People
Ensuring the safety and wellbeing of our people remains a top priority, as
they face extensive challenges amid the ongoing pandemic. We continue to
support our colleagues' health and wellbeing and invest in their development.
We would like to thank all our colleagues for their continuing dedication,
hard work and professionalism throughout the period.
Outlook
There was a strong improvement in the Group's profitability in the first half
compared to the same period last year, with a significantly improved
performance in Southeast Asia and a further contribution to growth from the
simplification of the Group's holding structure, which has now fully
annualised. COVID-19 continues to impact the Group's businesses in Hong Kong
and on the Chinese mainland, however, and conditions there remain uncertain
for the second half of the year.
Taking this together with expected lower sales in Hongkong Land's mainland
China development property business and stronger comparable results in the
second half of 2021, the Group expects growth to substantially moderate for
the full year.
The Group remains confident that its businesses have the right strategic focus
and valued market positions and are progressing well to meet the
rapidly-evolving needs of their customers. With this foundation and
substantial resources available to leverage attractive investment
opportunities in our core growth markets across Asia, the Group is well
positioned to drive sustainable mid- and long-term earnings growth.
Ben Keswick
Executive Chairman
OPERATING REVIEW
The performance of the Group's businesses is described below, in descending
order of contribution to the Group's underlying profit for the first half of
the year.
Astra
Astra reported a net profit equivalent to US$1,254 million under Indonesian
reporting standards in the first half, a 106% increase on the same period last
year and ahead of pre-pandemic levels. There were record performances from
almost all its businesses in the period, benefitting from improved economic
conditions, substantially elevated commodity prices and continued strong
business performance. The half-year net profit also included a
mark-to-market fair value gain on the group's investment in GoTo of US$250
million.
Net income from Astra's automotive business increased significantly to US$295
million, reflecting an increase in sales volumes. The wholesale car market
increased by 21% in the first half, and Astra's car sales were 23% higher,
with its market share increasing slightly to 54%. The wholesale market for
motorcycles decreased by 8%, and Astra's Honda motorcycle sales fell by 13%,
due to production constraints caused by semiconductor supply issues. As a
result, its market share also decreased. Astra Otoparts reported a 62%
increase in profit, mainly due to higher revenues from the original equipment
manufacturer and replacement market segments.
Net income from the Financial Services division increased by 36% to US$200
million, due to higher contributions from the consumer finance businesses.
Consumer finance businesses saw a 18% increase in the amounts financed, while
the net income contribution from the group's car-focussed finance companies
increased by 47% on larger loan portfolios. The contribution from the
motorcycle-focussed financing business increased significantly, due to lower
levels of non-performing loans. Heavy equipment-focussed finance operations
saw a 112% increase in the amounts financed and the net income contribution
from this business was 52% higher. General insurance company, Asuransi Astra
Buana, reported a 6% increase in net income, due to higher underwriting income
and investment income.
The Heavy Equipment, Mining, Construction and Energy division saw net income
increase by 131% to US$427 million, mainly due to higher contributions from
heavy equipment sales, mining contracting and coal mining, all of which
benefitted from higher coal prices. There were, however, some adverse
impacts on coal operating volumes arising from the temporary export ban on
coal. United Tractors reported a 129% increase in net income to US$715
million. Komatsu heavy equipment sales increased by 111% and saw higher
revenues from its parts and service businesses. Mining contracting
operations reported 6% higher overburden removal volume, while coal production
fell by 13%. United Tractors' coal mining subsidiaries recorded 8% lower
coal sales, but this volume impact was more than offset by higher coal selling
prices. Agincourt Resources saw 18% lower gold sales volumes.
Net income from Agribusiness increased by 25% to US$44 million, mainly due to
improved crude palm oil prices. The group's palm oil operations were
impacted in the period by the export ban on palm oil imposed by the Indonesian
government, but the ban is expected to be temporary. The group's
Infrastructure and Logistics division reported a 288% increase in net profit,
mainly due to improved performance in its toll road businesses. Astra now
has interests in 396km of operational toll roads along the Trans-Java network
and the Jakarta Outer Ring Road.
Hongkong Land
Hongkong Land's underlying profit attributable to shareholders for the first
six months of 2022 was US$425 million, up 8% from the equivalent period in
2021. There was a profit attributable to shareholders of US$292 million,
after accounting for a net non-cash loss of US$133 million arising from the
semi-annual revaluation of investment properties. This compares with a loss
attributable to shareholders of US$865 million in the first half of 2021,
which included a net revaluation loss of US$1.3 billion. The group's
financial position remains robust, with a strong balance sheet and liquidity.
On the Chinese mainland, Hongkong Land's development properties business saw
more sales completions in the first half of 2022, resulting in higher profits
than the same period last year. There was, however, weak sentiment in the
majority of its key markets, impacting contracted sales despite the continued
relaxation of cooling measures.
The planned timing of sales completions and the impact of pandemic-related
restrictions on construction activities, however, mean that profits from the
group's Chinese mainland development properties business will be lower in the
second half and some projects will be deferred into 2023.
Pandemic-related shutdowns impacted construction progress at the group's
mixed-use Galaxy Midtown project in Shanghai, possibly delaying anticipated
sales completions from the end of 2022 into early 2023.
Market sentiment was also weak in a majority of the group's key markets,
impacting contracted sales despite the continued relaxation of cooling
measures. The group's attributable interest in contracted sales was US$419
million in the first half of 2022, compared to US$1,360 million and US$1,288
million in the first and second halves of 2021, respectively. At 30th June
2022, the group had US$2,425 million in sold but unrecognised contracted
sales, compared with US$2,853 million at the end of 2021.
Results from the group's residential development activities in Singapore
declined slightly compared to the first half of 2021, primarily due to lower
completion progress on projects. In addition, sales demand for the group's
projects in the rest of Southeast Asia was generally subdued.
Contributions from the Investment Properties business remained resilient,
despite negative rental reversions in Hong Kong.
The group's investment properties business in Hong Kong saw a strong start to
the year. Anti-pandemic measures introduced later in the first quarter,
however, as the number of COVID-19 cases increased, impacted the number of new
office leasing enquiries and resulted in the group providing rental support to
a select number of retail tenants. The group's Central office portfolio
nevertheless continued to benefit from a flight to quality, as a number of new
tenants committed to long-term leases. Physical vacancy was 5.4% at the end
of June 2022, compared to 5.2% at the end of 2021, and on a committed basis,
it was 5.1%, compared to 4.9% at the end of 2021.
Hongkong Land's office portfolio in Singapore continued to benefit from
healthy leasing momentum, and vacancy on a committed basis remained low.
Vacancy at the group's Central retail portfolio was unchanged from the end of
2021, although base rental reversions remained negative. Tourism has not yet
returned to Hong Kong due to travel and quarantine restrictions, adversely
impacting retail sales levels.
A number of luxury brands opened new stores as planned in Beijing and Macau,
despite the market challenges faced by the group's retail operations due to
pandemic-related restrictions, which negatively impacted footfall and tenant
sales.
In Shanghai, city-wide lockdowns saw development activities at the multi-phase
West Bund site suspended for over two months, although construction has since
resumed.
Jardine Motors
Jardine Motors delivered a 12% increase in underlying net profit to US$172
million for the first half of the year. Zhongsheng, in which the Group owns
a 21% interest, and which acquired the Group's Zung Fu China business in
October 2021, recorded an 89% higher contribution of US$150 million, relating
to its performance for the six months from July to December 2021. There was
a 24% year-on-year increase in the contribution from the United Kingdom
business, driven by strong margins on both new and used cars, although new car
volume remained low due to supply constraints caused by the ongoing global
semiconductor shortage.
Jardine Pacific
Jardine Pacific reported a 7% lower underlying net profit of US$71 million in
the first half, compared with an underlying net profit of US$76 million in the
equivalent period in 2021. There was an adverse impact on the performance of
a number of Jardine Pacific's businesses from the resurgence of the pandemic
in Hong Kong, which was partially offset by the benefits realised from ongoing
operational improvements and government support.
Jardine Pacific operates within three main business segments: engineering,
consumer businesses and transport services.
Within the group's engineering businesses, JEC's contribution was lower than
last year, primarily as a result of project delays, but strong levels of new
work were secured in the period, leading to a record order book at the
half-year. Jardine Schindler's contribution was lower than the same period
last year, with softer sales in its New Installation and Modernisation
businesses and a weaker margin overall. Gammon delivered good profit growth,
largely due to the timing of project completions, and its order book remains
strong.
Within Jardine Pacific's consumer businesses, Jardine Restaurants Group
reported a weaker performance overall, as strong delivery sales in Pizza Hut
Taiwan and benefits from process re-engineering projects were offset by poorer
performances in both Pizza Hut and KFC Hong Kong, caused by the pandemic
restrictions there.
The Zung Fu business in Hong Kong and Macau reported a profit for the period,
as after-sales activities picked up in the second quarter, despite fewer
passenger car deliveries.
Within Jardine Transport Services, HACTL's contribution fell compared with the
same period last year, with lower volumes as export demand softened. Jardine
Aviation reported a higher loss, with flight volumes remaining low.
Greatview continued to see volume growth in both the China and international
markets, but its business was impacted by both rising raw material costs and
higher supply chain costs, resulting in a significantly weaker profit
performance.
Jardine Cycle & Carriage
Jardine Cycle & Carriage delivered strong results in the first half of
2022, compared to the same period in 2021, with underlying profit 51% higher
at US$522 million, mainly due to higher contributions from Astra and its
investment in THACO. Excluding the Astra contribution of US$465 million, the
business reported an underlying profit for the period of US$57 million, 9%
higher than the first half of 2021.
THACO contributed a US$52 million profit, 43% higher than the same period last
year, mainly due to strong performance from its automotive operations. The
business benefitted from a temporary reduction in registration fees for
locally-assembled vehicles and saw margins increase due to an improved sales
mix.
There was a 20% higher contribution of US$28 million from the group's Direct
Motor Interests. Lower profits from the Singapore operations - where car
sales fell as sales volume was adversely impacted by high Certificate of
Entitlement ('COE') prices and stock supply shortages - were more than offset
by an improved performance by Tunas Ridean in Indonesia, which saw increased
profitability across its automotive and financial services businesses. Cycle
& Carriage Bintang in Malaysia also contributed an improved profit despite
challenging trading conditions, with higher business volume due to the sales
tax reduction and the impact of cost savings initiatives.
Among JC&C's other interests, the contribution from Siam City Cement was
9% higher than the same period last year at US$15 million. There were higher
cement volumes and prices in most of its markets, but profits were adversely
impacted by inflationary pressure, high energy costs and the challenging
economic conditions in Sri Lanka.
REE's contribution of US$9 million, based on its first-quarter results, was
71% higher than the previous year, due to an improved performance from its
hydropower investments, reflecting favourable hydrography. REE has an
increasing focus on its investments in renewable energy sources, which also
include solar.
JC&C's investment in Vinamilk produced a dividend income of US$9 million,
compared to US$11 million last year. Vinamilk reported a 20% decrease in net
profit, mainly due to higher raw material and transportation costs.
Mandarin Oriental
Mandarin Oriental reported a lower underlying loss of US$21 million for the
first half of the year, a 69% improvement from the loss of US$67 million
incurred in the equivalent period in 2021.
Except for its properties in North Asia, where government restrictions on
international and domestic travel remained in place, the performance of the
group's hotels substantially recovered during the first half, with some
properties achieving room rates exceeding pre-COVID-19 levels.
In Europe, the Middle East and Africa, and America, where pandemic
restrictions were largely relaxed, the group benefitted from strong leisure
demand, with rates at or above pre-pandemic levels and improving occupancy
levels.
Demand in North Asia remained impacted by government restrictions to contain
regional COVID-19 outbreaks. In other Asian markets, however, pandemic
restrictions slowly eased, allowing a gradual recovery in occupancy levels.
The group continues to have a strong pipeline of future openings, with 25
announced projects to open in the next five years, almost doubling the number
of properties operated by the group. The new properties comprise eleven
standalone hotel projects, eleven projects with hotel and residence components
and three standalone residences projects.
The valuation of the Causeway Bay site under development remained broadly in
line with the valuation at 31st December 2021.
DFI Retail Group
The performance of DFI in the first half of 2022 was impacted by a number of
challenges. There were poor performances by key associates Yonghui and
Maxim's, as well as reduced profit contributions from Grocery Retail and
Convenience, which faced a combination of inflationary cost pressures and
changing customer behaviours. The weaker performances of these businesses
more than offset strong Health and Beauty profit growth and an increased
contribution from IKEA. DFI increased planned investments in digital
capacity and capability during the period. While these reduced profit in the
period, they are necessary to meet customers' evolving needs for on-and
off-line service and are made with a view to driving long-term sustainable
growth.
The group saw sales of US$4.5 billion for the period by its subsidiaries, 1%
lower than the prior year. It reported an underlying loss of US$52 million
for the first half, primarily due to US$60 million losses attributable to
associates. This compares with an underlying profit of US$32 million for the
equivalent period in 2021.
DFI's share of Yonghui's underlying losses for the six months ended March 2022
was US$38 million, including a US$64 million share of losses for the final
quarter of 2021. Encouragingly, Yonghui reported improvements in
like-for-like sales and profitability in the first quarter of 2022.
In addition, the group's 50%-owned associate, Maxim's, contributed a US$26
million loss in the first half. Performance in the first quarter was
severely impacted by government-imposed dining restrictions in Hong Kong to
address a further wave of COVID-19 cases there, as well as temporary lockdowns
on the Chinese mainland. Sales, however, started to recover in Hong Kong
over the second quarter as restrictions eased.
Like-for-like sales by the Grocery Retail business in the first half were
slightly behind the prior year. There was good sales growth in North Asia
driven by pantry-stocking behaviour and strong in-store execution, despite
challenging external conditions and supply chain constraints, particularly in
the first quarter. Sales performance in Southeast Asia was, however,
impacted by the easing of movement restrictions, which led to a reduction in
eating-at-home, store renovation disruptions in Singapore and stock
availability issues in Malaysia. Profitability in the half was lower than
the comparable period last year due to a combination of inflation impacting
cost of goods sold, e-commerce investment costs and operating cost pressures.
The Health and Beauty business reported strong sales recovery in the first
half. Sales by Mannings in Hong Kong were supported by effective in-store
execution and a surge in demand for pandemic-related products and
over-the-counter medicines. Guardian reported strong like-for-like sales
growth across key geographies, driven by a combination of a recovery in mall
and tourist locations, demand for pandemic-related products and effective
store-level execution. The profitability of the business also grew strongly
in the first half, driven by the sales recovery, effective promotion
management and cost control.
DFI's Convenience business saw varying operating performances across regions
in the first half, as pandemic-related restrictions continued to impact North
Asia.
Like-for-like sales for IKEA were lower in the first quarter, as the pandemic
continued to disrupt store operating capacity and there was reduced stock
availability. Like-for-like sales improved in the second quarter, however,
and IKEA's profitability in the first half was ahead of the same period last
year.
Financial Position
The balance sheet and liquidity of the Group remain strong.
Shareholders' funds were US$29.2 billion at 30th June 2022, compared with
US$29.8 billion at 31st December 2021.
Consolidated net debt excluding financial services companies was US$7.8
billion at 30th June 2022, representing gearing of 14%, compared with 11% at
31st December 2021.
The Group had liquidity of US$12.7 billion as at 30th June 2022, consisting of
US$6.4 billion in cash reserves and US$6.3 billion in unused, committed debt
facilities.
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
(unaudited)
Six months ended 30th June Year ended 31st December
2022 2021 2021
Underlying Underlying Underlying
business Non-trading business Non-trading business Non-trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 18,277 - 18,277 17,492 - 17,492 35,862 - 35,862
Net operating costs (note 3) (16,310) (35) (16,345) (16,032) (91) (16,123) (32,534) 1,114 (31,420)
Change in fair value of investment properties - (113) (113) - (1,323) (1,323) - (1,410) (1,410)
Operating profit/(loss) 1,967 (148) 1,819 1,460 (1,414) 46 3,328 (296) 3,032
Net financing charges
- financing charges (294) - (294) (291) - (291) (595) - (595)
- financing income 87 - 87 106 - 106 206 - 206
(207) - (207) (185) - (185) (389) - (389)
Share of results of associates and
joint ventures (note 4)
- before change in fair value of investment properties 610 (106) 504 458 17 475 1,178 10 1,188
- change in fair value of investment properties - (21) (21) - (5) (5) - 81 81
610 (127) 483 458 12 470 1,178 91 1,269
Profit/(loss) before tax 2,370 (275) 2,095 1,733 (1,402) 331 4,117 (205) 3,912
Tax (note 5) (445) 6 (439) (335) (6) (341) (828) (123) (951)
Profit/(loss) after tax 1,925 (269) 1,656 1,398 (1,408) (10) 3,289 (328) 2,961
Attributable to:
Shareholders of the Company 747 (324) 423 615 (732) (117) 1,513 368 1,881
(notes 6 & 7)
Non-controlling interests 1,178 55 1,233 783 (676) 107 1,776 (696) 1,080
1,925 (269) 1,656 1,398 (1,408) (10) 3,289 (328) 2,961
US$ US$ US$ US$ US$ US$
Earnings/(loss) per share (note 6)
- basic 2.60 1.47 1.86 (0.35) 4.83 6.01
- diluted 2.60 1.47 1.86 (0.35) 4.83 6.01
Jardine Matheson Holdings Limited
Consolidated Statement of Comprehensive Income
(unaudited) Year ended
Six months ended 31st
30th June December
2022 2021 2021
US$m US$m US$m
Profit/(loss) for the period 1,656 (10) 2,961
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans 1 (5) 86
Net revaluation surplus before transfer to investment properties
- tangible assets - - 75
- right-of-use assets - - 3
Tax on items that will not be reclassified - 1 (9)
1 (4) 155
Share of other comprehensive income/(expense) of associates and joint ventures 2 (2) 9
3 (6) 164
Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences
- net loss arising during the period (795) (275) (227)
- transfer to profit and loss - - (21)
(795) (275) (248)
Revaluation of other investments at fair value
through other comprehensive income
- net loss arising during the period (12) (10) (2)
- transfer to profit and loss (2) (2) (3)
(14) (12) (5)
Cash flow hedges
- net gain arising during the period 55 59 75
- transfer to profit and loss (5) 6 12
50 65 87
Tax relating to items that may be reclassified (11) (18) (21)
Share of other comprehensive expense of associates and joint ventures (651) (92) (16)
(1,421) (332) (203)
Other comprehensive expense for the period, (1,418) (338) (39)
net of tax
Total comprehensive income/(expense) for 238 (348) 2,922
the period
Attributable to:
Shareholders of the Company (353) (249) 1,908
Non-controlling interests 591 (99) 1,014
238 (348) 2,922
Jardine Matheson Holdings Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2022 2021 2021
US$m US$m US$m
Assets
Intangible assets 2,577 2,646 2,635
Tangible assets 5,905 6,513 6,184
Right-of-use assets 4,052 4,636 4,274
Investment properties 32,500 32,937 32,847
Bearer plants 484 486 499
Associates and joint ventures 17,730 16,582 17,980
Other investments 2,950 2,847 2,908
Non-current debtors 3,008 2,997 2,961
Deferred tax assets 522 484 518
Pension assets 24 9 32
Non-current assets 69,752 70,137 70,838
Properties for sale 3,515 2,680 3,345
Stocks and work in progress 2,957 2,656 2,793
Current debtors 7,163 6,814 6,928
Current investments 15 80 46
Current tax assets 143 185 172
Bank balances and other liquid funds
- non-financial services companies 5,725 7,280 6,904
- financial services companies 645 358 378
6,370 7,638 7,282
20,163 20,053 20,566
Asset classified as held for sale 82 20 85
Current assets 20,245 20,073 20,651
Total assets 89,997 90,210 91,489
Jardine Matheson Holdings Limited
Consolidated Balance Sheet (continued)
(unaudited) At 31st
At 30th June December
2022 2021 2021
US$m US$m US$m
Equity
Share capital 72 180 179
Share premium and capital reserves 26 34 25
Revenue and other reserves 29,130 33,771 35,800
Own shares held - (6,223) (6,223)
Shareholders' funds 29,228 27,762 29,781
Non-controlling interests 27,846 28,108 28,587
Total equity 57,074 55,870 58,368
Liabilities
Long-term borrowings
- non-financial services companies 11,274 11,144 11,026
- financial services companies 1,433 1,133 1,273
12,707 12,277 12,299
Non-current lease liabilities 2,842 2,953 3,022
Deferred tax liabilities 727 679 743
Pension liabilities 445 517 451
Non-current creditors 180 266 250
Non-current provisions 311 320 309
Non-current liabilities 17,212 17,012 17,074
Current creditors 10,308 9,661 10,074
Current borrowings
- non-financial services companies 2,269 4,211 2,513
- financial services companies 1,624 2,054 1,846
3,893 6,265 4,359
Current lease liabilities 771 798 812
Current tax liabilities 565 406 609
Current provisions 174 198 193
Current liabilities 15,711 17,328 16,047
Total liabilities 32,923 34,340 33,121
Total equity and liabilities 89,997 90,210 91,489
Jardine Matheson Holdings Limited
Consolidated Statement of Changes in Equity
Share Share Capital Revenue Asset Hedging Exchange Own Attributable to shareholders of the Company Attributable Total
capital premium reserves reserves revaluation reserves reserves shares US$m to non-controlling interests equity
US$m US$m US$m US$m reserves US$m US$m held US$m US$m
US$m US$m
Six months ended 30th June 2022 (unaudited)
At 1st January 2022 179 - 25 34,926 2,242 (18) (1,350) (6,223) 29,781 28,587 58,368
Total comprehensive expense - - - 417 - 38 (808) - (353) 591 238
Dividends paid by the Company (note 8) - - - (448) - - - - (448) - (448)
Dividends paid to non-controlling interests - - - - - - - - - (677) (677)
Issue of shares - 1 - - - - - - 1 - 1
Employee share option schemes - - 4 - - - - - 4 1 5
Scrip issued in lieu of dividends - - - 138 - - - - 138 - 138
Repurchase of shares (1) (3) - (147) - - - - (151) - (151)
Reduction of capital (106) (1) - (6,116) - - - 6,223 - - -
Capital contribution from non-controlling interests - - - - - - - - - 2 2
Share purchased for a share-based incentive plan
in a subsidiary - - - (15) - - - - (15) (5) (20)
Change in interests in other subsidiaries - - - 253 - - - - 253 (611) (358)
Change in interests in associates and joint ventures - - - 18 - - - - 18 (42) (24)
Transfer - 3 (3) - - - - - - - -
At 30th June 2022 72 - 26 29,026 2,242 20 (2,158) - 29,228 27,846 57,074
On 8th March 2021, the Company announced a plan to simplify the Group's parent
company structure, including the acquisition for cash of the 15% of Jardine
Strategic Holdings Limited's ('Jardine Strategic') issued share capital that
the Company and its wholly-owned subsidiaries did not already own (the
'Acquisition'). The Acquisition was implemented by way of an amalgamation of
Jardine Strategic and a wholly-owned subsidiary of the Company ('the
amalgamated subsidiary'), under the Companies Act 1981 of Bermuda. The total
Acquisition value was US$5.6 billion. The Acquisition was financed by the
issuance of a total of US$1.2 billion bonds on 9th April 2021, new revolving
credit facilities and existing cash resources.
The Acquisition was completed on 14th April 2021, following shareholders'
approval at the special general meeting on 14th April 2021. The Acquisition
value and the related transaction costs resulted in a reduction of the Group's
total equity in 2021.
At the Company's annual general meeting on 5th May 2022, shareholders approved
the cancellation of the 59% shareholding in the Company held directly and
indirectly by the above amalgamated subsidiary by way of a reduction of
capital in the Company. The capital reduction, which was effective on 18th
May 2022, constituted the final stage in the Group's simplification of its
parent company structure.
Jardine Matheson Holdings Limited
Consolidated Statement of Changes in Equity (continued)
Share Share Capital Revenue Asset Hedging Exchange Own Attributable to shareholders of the Company Attributable Total
capital premium reserves reserves revaluation reserves reserves shares US$m to non-controlling interests equity
US$m US$m US$m US$m reserves US$m US$m held US$m US$m
US$m US$m
Six months ended 30th June 2021 (unaudited)
At 1st January 2021 181 - 31 33,497 2,167 (55) (1,152) (5,282) 29,387 33,456 62,843
Total comprehensive expense - - - (123) - 20 (146) - (249) (99) (348)
Dividends paid by the Company (note 8) - - - (375) - - - - (375) - (375)
Dividends paid to non-controlling interests - - - - - - - - - (453) (453)
Issue of shares - 3 - - - - - - 3 - 3
Employee share option schemes - - 1 - - - - - 1 - 1
Scrip issued in lieu of dividends - - - 112 - - - - 112 - 112
Repurchase of shares (1) (1) - (229) - - - - (231) - (231)
Acquisition of the remaining interest in Jardine Strategic - - - - - - - (941) (941) (4,631) (5,572)
Change in interests in other subsidiaries - - - 109 - - - - 109 (144) (35)
Change in interests in associates and joint ventures - - - (54) - - - - (54) (21) (75)
Transfer - 5 (5) 27 - - (27) - - - -
At 30th June 2021 180 7 27 32,964 2,167 (35) (1,325) (6,223) 27,762 28,108 55,870
Year ended 31st December 2021
At 1st January 2021 181 - 31 33,497 2,167 (55) (1,152) (5,282) 29,387 33,456 62,843
Total comprehensive income - - - 1,966 76 37 (171) - 1,908 1,014 2,922
Dividends paid by the Company - - - (505) - - - - (505) - (505)
Dividends paid to non-controlling interests - - - - - - - - - (669) (669)
Unclaimed dividends forfeited - - - 1 - - - - 1 1 2
Issue of shares - 3 - - - - - - 3 - 3
Employee share option schemes - - 1 - - - - - 1 - 1
Scrip issued in lieu of dividends 1 (1) - 152 - - - - 152 - 152
Repurchase of shares (3) (8) - (569) - - - - (580) - (580)
Acquisition of the remaining interest in Jardine Strategic - - - - - - - (941) (941) (4,627) (5,568)
Subsidiaries disposed of - - - - - - - - - (5) (5)
Change in interests in subsidiaries - - - 282 - - - - 282 (581) (299)
Change in interests in associates and joint ventures - - - 73 - - - - 73 (2) 71
Transfer - 6 (7) 29 (1) - (27) - - - -
At 31st December 2021 179 - 25 34,926 2,242 (18) (1,350) (6,223) 29,781 28,587 58,368
Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
(unaudited) Year ended 31st December
Six months ended
30th June
2022 2021 2021
US$m US$m US$m
Operating activities
Cash generated from operations 2,428 3,135 5,383
Interest received 75 91 194
Interest and other financing charges paid (263) (282) (573)
Tax paid (485) (351) (728)
1,755 2,593 4,276
Dividends from associates and joint ventures 428 325 800
Cash flows from operating activities 2,183 2,918 5,076
Investing activities
Purchase of subsidiaries (5) - (24)
Purchase of associates and joint ventures (note 10(a)) (193) (276) (194)
Purchase of other investments (note 10(b)) (300) (245) (467)
Purchase of intangible assets (68) (65) (158)
Purchase of tangible assets (424) (298) (620)
Additions to right-of-use assets (33) (19) (25)
Additions to investment properties (56) (72) (118)
Additions to bearer plants (18) (16) (32)
Advances to and repayments to associates and (1,100)
joint ventures (note 10(c)) (556) (223)
Advances from and repayments from associates and 332 432 850
joint ventures (note 10(d))
Sale of subsidiaries - - 1,510
Sale of associates and joint ventures 7 - 60
Sale of other investments (note 10(e)) 145 203 398
Sale of tangible assets 29 62 135
Sale of right-of-use assets - - 13
Sale of investment properties - - 3
Cash flows from investing activities (1,140) (517) 231
Financing activities
Issue of shares 1 3 3
Capital contribution from non-controlling interests 2 - -
Acquisition of the remaining interest in Jardine Strategic (21) (5,447) (5,490)
Change in interests in subsidiaries (note 10(f)) (360) (35) (299)
Purchase of own shares (153) (236) (584)
Purchase of shares for a share-based incentive plan in (20) - -
a subsidiary
Drawdown of borrowings 4,248 8,953 12,572
Repayment of borrowings (4,048) (6,008) (11,467)
Principal elements of lease payments (432) (436) (894)
Dividends paid by the Company (310) (263) (353)
Dividends paid to non-controlling interests (671) (446) (669)
Cash flows from financing activities (1,764) (3,915) (7,181)
Net decrease in cash and cash equivalents (721) (1,514) (1,874)
Cash and cash equivalents at beginning of period 7,278 9,153 9,153
Effect of exchange rate changes (199) (68) (1)
Cash and cash equivalents at end of period 6,358 7,571 7,278
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
(unaudited) Year ended 31st December
Six months ended
30th June
2022 2021 2021
US$m US$m US$m
Reportable segments
Jardine Pacific 71 76 175
Jardine Motors 172 154 318
Hongkong Land 220 184 474
DFI Retail (40) 25 82
Mandarin Oriental (17) (47) (48)
Jardine Cycle & Carriage 67 56 119
Astra 349 203 474
822 651 1,594
Corporate and other interests (75) (36) (81)
Underlying profit attributable to shareholders* 747 615 1,513
Decrease in fair value of investment properties (63) (691) (681)
Sale of Zung Fu China(#) - - 791
Sale of Zung Fu properties in Hong Kong - - 337
Other non-trading items (261) (41) (79)
Profit/(loss) attributable to shareholders 423 (117) 1,881
Analysis of Jardine Pacific's contribution
Jardine Schindler 17 17 32
JEC 16 18 49
Gammon 13 8 39
Jardine Restaurants 13 18 27
Transport Services 11 15 31
Zung Fu Hong Kong(#) 3 - 4
Corporate and other interests (2) - (7)
71 76 175
Analysis of Jardine Motors' contribution
Hong Kong(#) and Chinese mainland 150 138 285
United Kingdom 20 16 38
Corporate 2 - (5)
172 154 318
* Underlying profit attributable to shareholders is the measure of profit
adopted by the Group in accordance with IFRS 8 'Operating Segments'.
(#) During 2021, the operations under Jardine Motors had been
restructured. The motor trading business in the Chinese mainland ('Zung Fu
China') was sold to the Group's associate, Zhongsheng, in October 2021.
Subsequent to the sale, the motor trading businesses in Hong Kong and Macau
('Zung Fu Hong Kong') are managed by Jardine Pacific. Accordingly, the
results of these operations are presented under Jardine Pacific from October
2021. Operations in the United Kingdom and Zhongsheng remain unchanged with
results presented under Jardine Motors.
__________________________________________________________________________________________
Jardine Matheson Holdings Limited
Notes to Condensed Financial Statements
1. Accounting Policies and Basis of Preparation
The condensed financial statements have been prepared in accordance with IAS
34 'Interim Financial Reporting' and on a going concern basis. The condensed
financial statements have not been audited or reviewed by the Group's auditors
pursuant to the UK Auditing Practices Board guidance on the review of interim
financial information.
There are no changes to the accounting policies as described in the 2021
annual financial statements and the Group has not early adopted any standard
or amendments that have been issued but not yet effective. A number of
amendments were effective from 1st January 2022. The more important
amendments applicable to the Group is as follows:
Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract
(effective from 1st January 2022)
The amendments clarifies that for the purpose of assessing whether a contract
is onerous, the cost of fulfilling the contract includes both the incremental
costs of fulfilling that contract and an allocation of other costs that relate
directly to fulfilling contracts. The Group applied the amendment from 1st
January 2022 and there is no significant impact on the Group's consolidated
financial statements.
2. Revenue
Jardine
Jardine Jardine Hongkong DFI Mandarin Cycle & Intersegment
Pacific Motors Land Retail Oriental Carriage Astra transactions Group
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Six months ended 30th June 2022
By product and service:
Property 2 - 894 - - - 32 (4) 924
Motor vehicles 207 1,088 - - - 764 3,774 - 5,833
Retail and restaurants 428 - - 4,483 - - - - 4,911
Financial services - - - - - - 884 - 884
Engineering, heavy equipment, mining and construction
321 - - - - - 4,166 (21) 4,466
Hotels - - - - 198 - - - 198
Other - - - - - - 1,061 - 1,061
958 1,088 894 4,483 198 764 9,917 (25) 18,277
Revenue from contracts with customers:
Recognised at a point in time 666 1,088 235 4,483 62 714 8,810 (25) 16,033
Recognised over time 290 - 111 - 127 48 98 - 674
956 1,088 346 4,483 189 762 8,908 (25) 16,707
Revenue from other sources:
Rental income from investment properties 2 - 456 - - - 1 - 459
Revenue from financial services companies
- - - - - - 884 - 884
Other - - 92 - 9 2 124 - 227
2 - 548 - 9 2 1,009 - 1,570
958 1,088 894 4,483 198 764 9,917 (25) 18,277
Six months ended 30th June 2021
By product and service:
Property 2 - 886 - - - 24 (5) 907
Motor vehicles - 3,042 - - - 803 2,989 (6) 6,828
Retail and restaurants 427 - - 4,537 - - - - 4,964
Financial services - - - - - - 839 - 839
Engineering, heavy equipment, mining and construction
239 - - - - - 2,593 (19) 2,813
Hotels - - - - 102 - - - 102
Other - - - - - - 1,039 - 1,039
668 3,042 886 4,537 102 803 7,484 (30) 17,492
Revenue from contracts with customers:
Recognised at a point in time 458 3,040 46 4,537 37 770 6,433 (6) 15,315
Recognised over time 208 2 287 - 55 32 109 (19) 674
666 3,042 333 4,537 92 802 6,542 (25) 15,989
Revenue from other sources:
Rental income from investment properties
2 - 470 - - - 6 (5) 473
Revenue from financial services companies
- - - - - - 839 - 839
Other - - 83 - 10 1 97 - 191
2 - 553 - 10 1 942 (5) 1,503
668 3,042 886 4,537 102 803 7,484 (30) 17,492
Gross revenue, comprises revenue together with 100% of revenue from associates
and
joint ventures, are analysed as follows:
Six months ended 30th June
2022 2021
US$m US$m
By business:
Jardine Pacific 2,941 2,615
Jardine Motors 14,702 16,110
Hongkong Land 2,543 2,410
DFI Retail 14,028 13,950
Mandarin Oriental 356 168
Jardine Cycle & Carriage 4,023 3,253
Astra 17,547 14,114
Intersegment transactions (146) (132)
55,994 52,488
3. Net Operating Costs
Six months ended 30th June
2022 2021
US$m US$m
Cost of sales (13,407) (13,210)
Other operating income 250 282
Selling and distribution costs (1,984) (1,970)
Administration expenses (1,128) (1,092)
Other operating expenses (76) (133)
(16,345) (16,123)
In relation to the COVID-19 pandemic, the Group had received government grants
and rent concessions of US$23 million (2021: US$34 million) and US$15 million
(2021: US$26 million), respectively, for the six months ended 30th June
2022. These subsidies were accounted for as other operating income.
Net operating costs included the following gains/(losses) from non-trading
items:
Change in fair value of other investments (30) (56)
Impairment of assets (6) -
Sale of businesses 5 -
Restructuring of businesses (1) (35)
Other (3) -
(35) (91)
4. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2022 2021
US$m US$m
By business:
Jardine Pacific (54) 49
Jardine Motors 150 93
Hongkong Land 143 115
DFI Retail (65) (28)
Mandarin Oriental (1) (15)
Jardine Cycle & Carriage 93 62
Astra 228 202
Corporate (11) (8)
483 470
Share of results of associates and joint ventures included the following
gains/(losses) from non-trading items:
Change in fair value of investment properties (21) (5)
Change in fair value of other investments 7 30
Impairment of Assets (113) (14)
Other - 1
(127) 12
Results are shown after tax and non-controlling interests in the associates
and joint ventures.
In relation to the COVID-19 pandemic, included in share of results of
associates and joint ventures were the Group's share of the government grants
and rent concessions of US$19 million (2021: US$13 million) and US$9 million
(2021: US$10 million), respectively, for the six months ended 30th June 2022.
5. Tax
Six months ended 30th June
2022 2021
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (485) (379)
Deferred tax 46 38
(439) (341)
China (53) (106)
Southeast Asia (370) (220)
United Kingdom (5) (4)
Rest of the world (11) (11)
(439) (341)
Tax relating to components of other comprehensive income or expense is
analysed as follows:
Remeasurements of defined benefit plans - 1
Cash flow hedges (11) (18)
(11) (17)
Tax on profits has been calculated at rates of taxation prevailing in the
territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$205 million (2021:
US$160 million) is included in share of results of associates and joint
ventures. Share of tax charge of US$21 million (2021: US$8 million) is
included in other comprehensive income of associates and joint ventures.
6. Earnings/(Loss) per Share
Basic earnings per share are calculated on profit attributable to shareholders
of US$423 million (2021: loss of US$117 million) and on the weighted average
number of 288 million (2021: 331 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to
shareholders of US$423 million (2021: loss of US$117 million), which is after
adjusting for the effects of the conversion of dilutive potential ordinary
shares of subsidiaries and on the weighted average number of 288 million
(2021: 331 million) shares in issue during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2022 2021
Weighted average number of shares in issue 644 721
Company's share of shares held by subsidiaries (356) (390)
Weighted average number of shares for basic earnings 288 331
per share calculation
Adjustment for shares deemed to be issued for no consideration under the - -
Senior Executive Share
Incentive Schemes
Weighted average number of shares for diluted earnings per share calculation 288 331
Additional basic and diluted earnings per share are also calculated based on
underlying profit attributable to shareholders. A reconciliation of earnings
is set out below:
Six months ended 30th June
2022 2021
US$m Basic Diluted earnings per share US$m Basic Diluted (loss)/ earnings per share
earnings per share US$ US$ (loss)/ US$
earnings per share
US$
Profit/(loss) attributable to shareholders 423 1.47 1.47 (117) (0.35) (0.35)
Non-trading items (note 7) 324 732
Underlying profit attributable to shareholders 747 2.60 2.60 615 1.86 1.86
7. Non-trading items
Non-trading items are separately identified to provide greater understanding
of the Group's underlying business performance. Items classified as
non-trading items include fair value gains or losses on revaluation of
investment properties and on equity investments which are measured at fair
value through profit and loss; gains and losses arising from the sale of
businesses, investments and properties; impairment of non-depreciable
intangible assets, associates and joint ventures and other investments;
provisions for the closure of businesses; acquisition-related costs in
business combinations; and other credits and charges of a non-recurring nature
that require inclusion in order to provide additional insight into underlying
business performance.
Six months ended 30th June
2022 2021
US$m US$m
By business:
Jardine Pacific (95) 16
Jardine Motors (1) -
Hongkong Land (70) (635)
DFI Retail (4) (12)
Mandarin Oriental 2 (71)
Jardine Cycle & Carriage (125) (84)
Astra 99 2
Corporate and other interests (130) 52
(324) (732)
An analysis of non-trading items after interest, tax and
non-controlling interests is set out below:
Change in fair value of investment properties
- Hongkong Land (70) (635)
- other 7 (56)
(63) (691)
Change in fair value of other investments (148) (1)
Impairment of assets (114) (11)
Sale and closure of businesses 4 -
Restructuring of businesses (1) (25)
Other (2) (4)
(324) (732)
8. Dividends
Six months ended 30th June
2022 2021
US$m US$m
Final dividend in respect of 2021 of US¢156.00 1,114 921
(2020: US¢128.00) per share
Company's share of dividends paid on the shares held by subsidiaries (666) (546)
448 375
An interim dividend in respect of 2022 of US¢55.00 (2021: US¢44.00) per
share amounting to a total of US$159 million (2021: US$318 million) is
declared by the Board and will be accounted for as an appropriation of revenue
reserves in the year ending 31st December 2022.
9. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with
carrying amounts at 30th June 2022 and 31st December 2021 are as follows:
Fair value of hedging instruments Fair value through profit and loss Fair value through other comprehensive income Financial assets at amortised costs Other financial liabilities Total Fair
US$m US$m US$m US$m US$m carrying value
amount US$m
US$m
30th June 2022
Financial assets measured at
fair value
Other investments
- equity investments - 2,088 - - - 2,088 2,088
- debt investments - 10 762 - - 772 772
- limited partnership investment funds - 105 - - - 105 105
Derivative financial instruments 146 - - - - 146 146
146 2,203 762 - - 3,111 3,111
Financial assets not measured at
fair value
Debtors - - - 8,207 - 8,207 8,049
Bank balances - - - 6,370 - 6,370 6,370
- - - 14,577 - 14,577 14,419
Financial liabilities measured at
fair value
Derivative financial instruments (19) - - - - (19) (19)
Contingent consideration payable - (9) - - - (9) (9)
(19) (9) - - - (28) (28)
Financial liabilities not measured at
fair value
Borrowings - - - - (16,600) (16,600) (16,092)
Lease liabilities - - - - (3,613) (3,613) (3,613)
Trade and other - - - - (7,666) (7,666) (7,666)
payable excluding non-financial liabilities
- - - - (27,879) (27,879) (27,371)
Financial instruments by category
Fair value of hedging instruments Fair value through profit and loss Fair value through other comprehensive income Financial assets at amortised costs Other financial liabilities Total Fair
US$m US$m US$m US$m US$m carrying value
amount US$m
US$m
31st December 2021
Financial assets measured at
fair value
Other investments
- equity investments - 2,055 - - - 2,055 2,055
- debt investments - - 777 - - 777 777
- limited partnership investment funds - 122 - - - 122 122
Derivative financial instruments 54 - - - - 54 54
54 2,177 777 - - 3,008 3,008
Financial assets not measured at
fair value
Debtors - - - 7,993 - 7,993 8,054
Bank balances - - - 7,282 - 7,282 7,282
- - - 15,275 - 15,275 15,336
Financial liabilities measured at
fair value
Derivative financial instruments (78) - - - - (78) (78)
Contingent consideration payable - (9) - - - (9) (9)
(78) (9) - - - (87) (87)
Financial liabilities not measured at
fair value
Borrowings - - - - (16,658) (16,658) (16,944)
Lease liabilities - - - - (3,834) (3,834) (3,829)
Trade and other - - - - (7,371) (7,371) (7,371)
payable excluding non-financial liabilities
- - - - (27,863) (27,863) (28,144)
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance
sheet, the corresponding fair value measurements are disclosed by level of the
following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or
liabilities ('quoted prices in active markets')
The fair values of listed securities and bonds are based on quoted prices in
active markets at the balance sheet date. The quoted market price used for
listed investments held by the Group is the current bid price.
(b) Inputs other than quoted prices in active markets that are observable for the
asset or liability, either directly or indirectly ('observable current market
transactions')
The fair values of derivative financial instruments are determined using rates
quoted by the Group's bankers at the balance sheet date. The rates for
interest rate swaps and caps, cross-currency swaps and forward foreign
exchange contracts are calculated by reference to market interest rates and
foreign exchange rates.
The fair values of unlisted investments mainly include club and school
debentures, are determined using prices quoted by brokers at the balance sheet
date.
(c) Inputs for assets or liabilities that are not based on observable market data
('unobservable inputs')
The fair values of other unlisted equity investments and limited partnership
investment funds are determined using valuation techniques by reference to
observable current market transactions (including price-to earnings and
price-to book ratios of listed securities of entities engaged in similar
industries) or the market prices of the underlying investments with certain
degree of entity specific estimates or discounted cash flow by projecting the
cash inflows from these investments.
There were no changes in valuation techniques during the six months ended 30th
June 2022 and the year ended 31st December 2021.
The table below analyses financial instruments carried at fair value at 30th
June 2022 and
31st December 2021, by the levels in the fair value measurement hierarchy:
Quoted Observable current market transactions Unobservable inputs Total
prices in active markets US$m US$m US$m
US$m
30th June 2022
Assets
Other investments
- equity investments 1,824 53 211 2,088
- debt investments 762 - 10 772
- limited partnership investment funds - - 105 105
2,586 53 326 2,965
Derivative financial instruments at
fair value
- through other comprehensive income - 144 - 144
- through profit and loss - 2 - 2
2,586 199 326 3,111
Liabilities
Contingent consideration payable - - (9) (9)
Derivative financial instruments at
fair value
- through other comprehensive income - (19) - (19)
- (19) (9) (28)
31st December 2021
Assets
Other investments
- equity investments 1,565 53 437 2,055
- debt investments 777 - - 777
- limited partnership investment funds - - 122 122
2,342 53 559 2,954
Derivative financial instruments at
fair value
- through other comprehensive income - 42 - 42
- through profit and loss - 12 - 12
2,342 107 559 3,008
Liabilities
Contingent consideration payable - - (9) (9)
Derivative financial instruments at
fair value
- through other comprehensive income - (78) - (78)
- (78) (9) (87)
During the six months ended 30th June 2022, equity investments amounted to
US$240 million was transferred from 'Unobservable inputs' to 'Quoted prices in
active markets'. There were no transfers among the three categories for the
year ended 31st December 2021.
Movement of unlisted equity and debt investments, and limited partnership
investment funds, which are valued based on unobservable inputs during the
year ended 31st December 2021 and six months ended 30th June 2022 are as
follows:
US$m
At 1st January 2021 379
Exchange differences (4)
Additions 152
Net change in fair value during the year included in profit and loss 32
At 31st December 2021 and 1st January 2022 559
Exchange differences (10)
Additions 33
Disposals (5)
Transfer to 'Quoted prices in active markets' (240)
Net change in fair value during the period included in profit and loss (11)
At 30th June 2022 326
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds,
current creditors,current borrowings and current lease liabilities are assumed
to approximate their carrying amounts due to the short-term maturities of
these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are
estimated using the expected future payments discounted at market interest
rates. The fair values of non-current lease liabilities are estimated using
the expected future payments discounted at market interest rates.
10. Notes to Consolidated Cash Flow Statement
(a) Purchase of associates and joint ventures for the six months ended 30th June
2022 mainly included US$84 million for Hongkong Land's investments in the
Chinese mainland, US$24 million for Jardine Cycle & Carriage's additional
interest in Refrigeration Electrical Engineering Corporation, US$45 million
for Astra's investment in a toll road concession business and US$38 million
for Corporate's additional investment in Livi Bank Limited in Hong Kong.
Purchase for the six months ended 30th June 2021 mainly included US$249
million for Hongkong Land's investments in the Chinese mainland.
(b) Purchase of other investments for the six months ended 30th June 2022 mainly
included Astra's acquisition of securities of US$191 million, and Astra's
investments in healthcare services and a technology-based logistics startup of
US$74 million and US$15 million, respectively.
Purchase for the six months ended 30th June 2021 mainly included Astra's
acquisition of securities.
(c) Advances to and repayments to associates and joint ventures for the six months
ended 30th June 2022 mainly included Hongkong Land's advances and repayments
to its property joint ventures.
Advances for the six months ended 30th June 2021 included US$216 million for
Hongkong Land's advances and repayments to its property joint ventures and
US$7 million for Mandarin Oriental's advances to its associate and joint
venture hotels.
(d) Advances from and repayments from associates and joint ventures for the six
months ended 30th June 2022 and 2021 mainly included advances from and
repayments from Hongkong Land's joint ventures.
(e) Sale of other investments for the six months ended 30th June 2022 mainly
included sale of securities in Astra.
Sale for the six months ended 30th June 2021 comprised sale of securities of
US$132 million and US$71 million, respectively, in Astra and Corporate.
(f) Change in interests in subsidiaries
Six months ended 30th June
2022 2021
US$m US$m
Increase in attributable interests
- Hongkong Land (279) -
- Jardine Cycle & Carriage (73) -
- other (8) (35)
(360) (35)
Increase in attributable interests in other subsidiaries for the six months
ended 30th June 2021 included US$17 million and US$18 million for Jardine
Cycle & Carriage's additional 29% and 25% interests in Cycle &
Carriage Bintang and Republic Auto, respectively.
11. Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2022 and 31st December 2021 amounted to
US$2,713 million and US$2,864 million, respectively.
Following the acquisition of the 15 per cent of Jardine Strategic not
previously owned by the Company and its wholly-owned subsidiaries, which was
effected on 14th April 2021, a number of former Jardine Strategic shareholders
are seeking an appraisal of the fair value of their shares in Jardine
Strategic by the Bermuda court, relying upon the process referred to in the
shareholder circular issued in connection with the acquisition. These
shareholders claim the consideration of US$33 per share that Jardine Strategic
considered to be fair value for its shares, and that all shareholders have
already received, did not represent fair value. The proceedings, which were
commenced in April 2021, are still ongoing. It is anticipated that the court
appraisal process will not be concluded for at least a further 12 months.
The Board believes that the US$33 per share that was paid represented fair
value to Jardine Strategic minority shareholders and is of the opinion that no
provision is required in relation to these claims.
Various Group companies are involved in litigation arising in the ordinary
course of their respective businesses. Having reviewed outstanding claims
and taking into account legal advice received, the Directors are of the
opinion that adequate provisions have been made in the condensed financial
statements.
12. Related Party Transactions
In the normal course of business the Group undertakes a variety of
transactions with certain of its associates and joint ventures.
The most significant of such transactions relate to the purchases of motor
vehicles and spare parts from the Group's associates and joint ventures in
Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra
Daihatsu Motor. Total cost of motor vehicles and spare parts purchased for
the six months ended 30th June 2022 amounted to US$1,787 million (2021:
US$2,198 million). The Group also sells motor vehicles and spare parts to
its associates and joint ventures in Indonesia including PT Astra Honda Motor,
PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sales of
motor vehicles and spare parts for the six months ended 30th June 2022
amounted to US$344 million (2021: US$271 million).
There were no other related party transactions that were considered to have a
material effect on the financial position or performance of the Group that
were entered into or changed during the first six months of the current
financial year.
Amounts of outstanding balances with associates and joint ventures are
included in debtors and creditors, as appropriate.
Jardine Matheson Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control.
The following have been identified previously as the areas of principal risk
and uncertainty facing the Company, and they remain relevant in the second
half of the year.
● Economic Risk
● Commercial Risk
● Financial and Treasury Risk
● Concessions, Franchises and Key Contracts Risk
● Regulatory and Political Risk
● Pandemic and Natural Disasters Risk
● Cybersecurity Risk
● Investment, Strategic Transactions and Partnerships Risk
● People Risk
● Environmental and Climate Risk
For greater detail, please refer to pages 74 to 78 of the Company's 2021
Annual Report, a copy of which is available on the Company's website at
www.jardines.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance
with IAS 34; and
(b) the interim management report includes a fair review of all
information required to be disclosed by the Disclosure Guidance and
Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority
of the United Kingdom.
For and on behalf of the Board
John Witt
Graham Baker
Directors
28th July 2022
Dividend Information for Shareholders
The interim dividend of US¢55 per share will be payable on 12th October 2022
to shareholders on the register of members at the close of business on 19th
August 2022. The shares will be quoted ex-dividend on 18th August 2022 and the
share registers will be closed from 22nd to 26th August 2022, inclusive. The
dividend will be available in cash with a scrip alternative.
Shareholders will receive their cash dividends in United States Dollars,
except when elections are made for alternate currencies in the following
circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register will have the option to
elect for their dividends to be paid in Sterling. These shareholders may make
new currency elections for the 2022 interim dividend by notifying the United
Kingdom transfer agent in writing by 23rd September 2022. The Sterling
equivalent of dividends declared in United States Dollars will be calculated
by reference to a rate prevailing on 28th September 2022.
Shareholders holding their shares through CREST in the United Kingdom will
receive their cash dividends in Sterling only as calculated above.
Shareholders on the Singapore branch register who hold their shares through
The Central Depository (Pte) Limited ('CDP')
Shareholders who are on CDP's Direct Crediting Service ('DCS')
For those shareholders who are on CDP's DCS, they will receive their cash
dividends in Singapore Dollars unless they opt out of CDP Currency Conversion
Service, through CDP, to receive United States Dollars.
Shareholders who are not on CDP's DCS
For those shareholders who are not on CDP's DCS, they will receive their cash
dividends in United States Dollars unless they elect, through CDP, to receive
Singapore Dollars.
Shareholders on the Singapore branch register who wish to deposit their shares
into the CDP system by the dividend record date, being 19th August 2022, must
submit the relevant documents to M & C Services Private Limited, the
Singapore branch registrar, by no later than 5.00 p.m. (local time) on 18th
August 2022.
The Jardine Matheson Group
Jardine Matheson is a diversified Asian-based group founded in China in 1832,
with unsurpassed experience in the region. It has a broad portfolio of
market-leading businesses, which represent a combination of cash generating
activities and long-term property assets and are closely aligned to the
increasingly prosperous consumers of the region. The Group's businesses aim
to produce sustainable returns by providing their customers with high quality
products and services. The Group is committed to driving long-term
sustainable success in our businesses and our communities.
Jardine Matheson operates principally in China and Southeast Asia, where its
subsidiaries and affiliates benefit from the support of the Group's extensive
knowledge of the region and its long-standing relationships. These companies
are active in the fields of motor vehicles and related operations, property
investment and development, food retailing, health and beauty, home
furnishings, engineering and construction, transport services, restaurants,
luxury hotels, financial services, heavy equipment, mining and agribusiness.
Jardine Matheson holds interests in Jardine Pacific (100%), Jardine Motors
(100%), Hongkong Land (52.6%), DFI Retail Group (77.6%), Mandarin Oriental
(79.5%) and Jardine Cycle & Carriage (75.9%) ('JC&C'). JC&C in
turn has a 50.1% shareholding in Astra.
Jardine Matheson Holdings Limited is incorporated in Bermuda and has a primary
listing on the London Stock Exchange, with secondary listings in Bermuda and
Singapore. Jardine Matheson Limited operates from Hong Kong and provides
management services to Group companies.
- end -
For future information, please contact:
Jardine Matheson Limited
Graham Baker / Max Sunarcia (852) 2843 8218 / 8266
Brunswick Group Limited
William Brocklehurst (852) 5685 9881
As permitted by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority in the United Kingdom, the Company will not be
posting a printed version of the Half-Year Results announcement for the six
months ended 30th June 2022 to shareholders. This Half-Year Results
announcement will be made available on the Company's website,
www.jardines.com, together with other Group announcements.
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