REG - Jardine Matheson Hdg - Half-year Results
28/07/2023 14:15
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RNS Number : 6096H Jardine Matheson Hldgs Ltd 28 July 2023
28th July 2023
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
Results for the Six Months ended 30th June 2023
Strong Performance as Business Continues Post-Pandemic Recovery
Highlights
· Underlying profit of US$823 million, 10% above 2022 and ahead
of pre-COVID levels in 2019
· Underlying earnings per share of US$2.84, up 9% against first
half of 2022
· Strong performance in Southeast Asia, led by Astra, and
recovery continues in North Asia
· DFI Retail ('DFI') and Mandarin Oriental half-year results
significantly improve from prior year; Zhongsheng contribution down
· Interim dividend of US$0.60, up 9%
"The Group delivered a strong overall performance in the first half of 2023,
as the business continued its post-pandemic recovery, with overall results
exceeding pre-COVID levels seen in 2019. Astra continued to deliver very
good performance and DFI and Mandarin Oriental saw strong recoveries. We are
encouraged by the results from most of our businesses in the first half and
are optimistic that earnings growth will continue in the remainder of the
year.
The Group has a strong balance sheet and will continue to focus on
opportunities in its core, growing markets in Asia, to create sustainable
long-term growth."
Ben Keswick, Executive Chairman
Results
(unaudited) ( )
Six months
ended 30th June
2023 2022 ( ) Change
US$m US$m ( ) %
Gross revenue including 100% of associates and joint ventures 54,782 55,994 -2
Revenue 18,307 18,277 -
Underlying profit* attributable to shareholders 823 747 +10
Profit attributable to shareholders 566 423 +34
Shareholders' funds(#) 28,982 28,826 +1
US$ US$ %
Underlying earnings per share* 2.84 2.60 +9
Earnings per share 1.95 1.47 +33
Net asset value per share(#) 100.01 99.47 +1
US¢ US¢ %
Interim dividend per share 60 55 +9
* 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 2023 and 31st December 2022, respectively. Net asset value
per share is based on the book value of shareholders' funds.
The interim dividend of US¢60 per share will be payable on 11th October 2023
to shareholders on the register of members at the close of business on 18th
August 2023 and will be available in cash with a scrip alternative.
Chairman's Statement
Overview
The Group's underlying net profit for the first half of 2023 was US$823
million, 10% above the same period last year and ahead of pre-COVID levels in
2019. There were improved performances from most of the Group's businesses
in the first half of 2023, compared with the same period last year.
There was a continued very good performance from Astra, whose diversified
portfolio enabled it to benefit from the strong overall economic recovery in
the Indonesian market.
The results of DFI and Mandarin Oriental significantly improved from the prior
year. Hongkong Land's performance, however, was flat compared with the same
period last year, as its residential Development Properties business continued
to be impacted by a lower planned number of sales completions.
The profit contribution from the Group's interest in Zhongsheng was
significantly lower than in the prior year, as the business was impacted by
lacklustre consumer demand in the mainstream car market, and the strong
performance of the electric vehicle market, on the Chinese mainland.
The Group continues to benefit from its diversified exposure to the key growth
markets of Asia. The strong performance of the Group's businesses in
Southeast Asia in the first half of 2023 led to 58% of earnings coming from
that region and 37% from China (including Hong Kong). The Group's businesses
in Hong Kong made good progress following the reopening of borders in early
2023, and there were encouraging performances by Hongkong Land's retail
portfolio, DFI's health & beauty and convenience businesses and Maxim's,
as visitor numbers began to recover and consumer spending improved.
Underlying earnings per share increased by 9% to US$2.84.
The Group recorded a net non-trading loss in the first half of US$257 million,
compared with a net non-trading loss of US$324 million in the first half of
2022. This was mainly a result of a net fair value loss of US$482 million
upon the revaluation of investment properties during the period, which was
offset by the increase of US$54 million in the fair value of the Group's other
investments. The Group recorded a profit attributable to shareholders for the
period of US$566 million, compared with US$423 million in the first half of
2022.
Dividend
The Board has announced an interim dividend of US¢60 per share, an increase
of 9% over the prior year.
Significant Developments
The Group continued to advance its strategic objectives in the first 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.
The Group believes it is essential to continue to invest for the long-term in
business opportunities which will drive future growth for our shareholders.
A good example of this is Astra's agreement to acquire a 90% interest in the
nickel mining and processing businesses, PT Stargate Pasific Resources and PT
Stargate Mineral Asia, as part of its strategy of diversifying into other
minerals and renewable energy.
In June 2023, United Tractors' subsidiary, PT Danusa Tambang Nusantara, signed
a share subscription agreement to acquire, for approximately US$630 million, a
19.9% stake in Nickel Industries Limited, a leading ASX-listed nickel mining
and processing company with assets in Indonesia. This transaction further
reflects United Tractors' focus on deploying capital into, and securing future
earnings from, non-coal businesses.
During the period, Jardine Cycle & Carriage ('JC&C') increased its
interest in Refrigeration Electrical Engineering Corporation ('REE') from
33.6% to 34.4%, through on-market purchases.
The Group also continued to simplify its portfolio, by divesting a number of
businesses which were no longer aligned to its strategic objectives.
The sale of the Group's United Kingdom motors business was completed in March
2023 for proceeds of US$402 million. Also in March 2023, DFI completed the
sale of its Malaysian Grocery Retail business, including the Giant brand.
DFI will also divest several associated properties in Malaysia, with the sale
expected to be completed in the second half of the year.
During the period, Cycle & Carriage Singapore benefitted from the proceeds
realised from a sale and leaseback of its Singapore properties.
Driving Innovation and Operational Excellence
The Group continues to focus on delivering operational excellence in our
existing and new businesses. There was strong progress in the period in
driving greater efficiency and productivity in many of the Group's businesses,
including DFI, Jardine Engineering Corporation ('JEC'), Gammon, Jardine
Restaurant Group, Zung Fu and Hong Kong Air Cargo Terminals Limited ('HACTL'),
with a positive impact on results.
HACTL has, for example, introduced robotics into some of its goods handling
operations and automation more generally in areas such as automated parts
sourcing and fleet monitoring systems. DFI's transformation programme
continued to deliver real improvements in operating metrics across its
banners. The Group has also seen successful early transitions in Jardine
Pacific into its new Global Business Services operation in Foshan, which will
bring the business closer to driving improvements in its core back-office
data, processes and systems.
The increased efficiencies which are being delivered across our businesses
enhance their agility and adaptability and help them address the challenges
they face in order to deliver future growth.
As well as driving operational excellence, a key strategic priority is
innovation. In this context, Astra continued progress, with its partner
WeLab, towards the planned launch of a digital bank, following the acquisition
of PT Bank Jasa Jakarta. The digital bank will provide a wide range of online
financial services to the under-banked market in Indonesia. In July 2023,
Astra complemented and expanded its used car business by acquiring a 99.98%
stake in Tokobagus, a leading Indonesian online classified advertisement
platform operating under the OLX brand, connecting people to buy and sell
goods (including cars). In June 2023, JC&C announced a used car and
aftersales partnership with Carro, a leading online auto platform.
We have continued to embed innovation across our businesses, underscored by
annual events such as Digital Day and LearnFest, where innovation-related
themes are central to the agenda.
Enhancing Leadership and Entrepreneurialism
Jardines continues its work to build our diverse and inclusive culture where
everyone can succeed. The Group's Diversity & Inclusion ('D&I')
Strategy consists of two parts. The first is a 5-year target for D&I,
with an initial focus on gender representation. In addition, each Group
business has set its own targets to improve D&I in the workplace. The
second focuses on five key enablers to drive behavioural and systemic changes.
In the first half of 2023, D&I targets were introduced and included in
senior leaders' KPIs and factored into their annual performance reviews.
The Group has a clear D&I ambition underpinned by a range of initiatives
to drive awareness and understanding, including the introduction of D&I
education programmes on inclusive leadership skills for the Group's senior
leaders and managers. D&I learning programmes are also now included in
the Group's new joiner onboarding programme.
At Jardines, building a Group that attracts, develops and retains exceptional
leaders is a key priority and is critical to achieving our strategic
ambitions. In May 2023, we announced chief executive leadership transitions
in two of our Group companies: DFI and Mandarin Oriental.
At DFI, Scott Price will succeed Ian McLeod as Group Chief Executive with
effect from 1st August 2023. Scott is an experienced senior business
executive with 25 years' international experience, most of which were spent in
Asia, spanning the retail, logistics and consumer packaged goods sectors.
Scott was most recently President, International at UPS. Prior to that he
spent a number of years in senior positions at Walmart, including as CEO,
Asia. We thank Ian for his six years as Group Chief Executive, leading a
comprehensive business transformation to strengthen customer and product
propositions, systems and processes and supply chain, in order to provide the
group with a clear foundation upon which to build future growth.
At Mandarin Oriental, Laurent Kleitman will succeed James Riley as Group Chief
Executive with effect from 1st September 2023. Laurent joins the Group from
LVMH, where he was President and CEO of Parfums Christian Dior, and brings
many years' experience in building iconic consumer brands across the beauty
and broader FMCG sectors. We thank James for his 30 years' valued service to
the Jardine Matheson Group and especially want to highlight his significant
contribution as Group Chief Executive of Mandarin Oriental over the past seven
years. James has been instrumental in continuing to expand Mandarin
Oriental's development pipeline, elevating the Mandarin Oriental brand
globally and driving a wide range of effective sustainability initiatives
across the group.
We continue to increase our efforts to support colleagues across our
businesses in developing according to their potential and ambitions. This
means providing more personalised mentoring and career development, engaging
actively to support individual learning and mobility opportunities,
recognising and rewarding performance, and continuing to promote a work
environment that is diverse and inclusive. The Group also continues to
support the growth of the next generation of leaders within our businesses by
offering a variety of development programmes.
Progressing Sustainability
Sustainability is a key driver of the Group's strategy, decisions and
relationships and underpins our continuing focus on making the Group stronger
for the future. The Group continued to progress its sustainability agenda
during the period, with a particular focus on increasing the visibility of the
extensive range of activities taking place across our businesses.
We published our second Group Sustainability Report at the end of May 2023.
The Report highlighted the strong progress across the three pillars of the
Group's sustainability strategy in 2022. Under the pillar of Leading Climate
Action, there was a particular focus on setting decarbonisation targets.
Hongkong Land and Gammon have both obtained approval from the Science Based
Targets initiative ('SBTi') for their 1.5°C-aligned 2030 targets, and other
Group companies are following suit: Gammon and HACTL have submitted commitment
letters to SBTi, while DFI has committed to 1.5°C-aligned scope 1 and 2
targets for 2030 and 2050.
Our businesses are developing decarbonisation pathways for their operational
(Scope 1 and 2) greenhouse gas emissions. We recognise the importance of
Scope 3 (value chain) emissions and are working towards understanding and
reducing them in due course.
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 coal mines or new
thermal coal-fired power plants.
In Driving Responsible Consumption, the Group has focussed during the period
on reducing waste by strengthening waste management and exploring circular
solutions to transform waste into valuable resources. The Group is also
aiming to adopt industry-leading practices for biodiversity management and
building up expertise to understand our dependencies and impacts on
biodiversity.
In relation to the third pillar of our sustainability strategy, Shaping Social
Inclusion, the Group has a particular focus on promoting education and health
initiatives. It continues to provide opportunities to access quality
education, including training for our colleagues and providing financial
support for students from less affluent backgrounds to access higher
education. The Group also advocates for greater awareness of mental health
and invests significantly in mental health support. The Group is also
investing to achieve positive changes to livelihoods and building stronger
communities.
The Group-wide colleague volunteering programme, which aims to facilitate
participation by colleagues across the Group in a range of social inclusion
and other activities, continues to gather momentum.
People
The Company appointed Janine Feng as an Independent Non-Executive Director in
May 2023, supporting our aim of enhancing our approach to governance and our
ambition to increase the breadth and diversity of experience and backgrounds
on the Company's board. Janine has also been appointed as an independent
member of the Board's Audit Committee.
Janine brings valuable expertise and experience both as an independent
non-executive director and as a seasoned executive with many years' experience
at Carlyle, focussed on Asian buyout opportunities in the financial services,
consumer products and healthcare sectors.
Michael Wu was also appointed as an independent member of the Audit Committee
in March 2023, in place of Adam Keswick, who stood down with effect from the
same date. With these changes, the Board considers that the Audit Committee
now comprises only Independent Non-Executive Directors.
Outlook
We are encouraged by the results delivered by most of our businesses in the
first half and are optimistic that earnings growth will continue in the
remainder of the year.
The Group has a strong balance sheet and will continue to focus on
opportunities in its core, growing markets in Asia, to create sustainable
long-term 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 consolidated net revenue in the first half of 2023 of US$10.8
billion, 13% higher than in the first half of 2022. The group's net income,
excluding fair value adjustments, was US$1,154 million, 20% higher than in the
first half of 2022. This earnings growth reflects improved performances from
most of the group's business divisions, especially its automotive, financial
services and heavy equipment and mining businesses. Including these fair value
adjustments, the group's net income decreased to US$1,163 million, a 4%
reduction compared to the same period last year.
Net income from Astra's automotive division increased by 33% to US$379
million, reflecting higher sales volumes.
The wholesale car market increased by 7% in the first half, and Astra's car
sales were 7% higher, with its market share marginally up at 55%. The
wholesale market for motorcycles grew strongly by 43%, and Astra Honda's
motorcycle sales increased by 56% compared with the same period last year,
when the business was impacted by production constraints caused by
semiconductor supply issues. As a result, its market share in the first half
also increased from 77% to 80%. Astra Otoparts reported an 85% increase in
net income, mainly due to higher revenues from the original equipment
manufacturer segment.
Net income from the group's financial services division increased by 32% to
US$255 million, due to higher contributions from the consumer and heavy
equipment finance businesses. Consumer finance businesses saw a 27% increase
in new amounts financed, while the net income contribution from the group's
car-focussed finance companies increased by 36%, due to larger loan portfolios
and lower loan loss provisions. The contribution from the
motorcycle-focussed financing business increased by 30%, also due to a larger
loan portfolio and lower loan loss provisions. Heavy equipment-focussed
finance operations saw new amounts financed stable. The net income
contribution from this business was 112% higher, mainly due to the growth of
the total loan portfolio. General insurance company, Asuransi Astra Buana,
reported a 9% increase in net income, as it benefitted from higher
underwriting income, while investment income, which continues to be the major
contributor to net income, was stable.
The Heavy Equipment, Mining, Construction and Energy division saw net income
increase by 11% to US$459 million, largely as a result of higher contributions
from its heavy equipment and mining contracting businesses.
United Tractors reported an 8% increase in net income to US$747 million.
Komatsu heavy equipment sales increased by 9% and there were also higher
revenues from the parts and service businesses. Mining contracting
operations reported a 20% increase in overburden removal volume and 18% higher
coal production. United Tractors' coal mining subsidiaries recorded an 11%
increase in coal sales. Agincourt Resources saw 24% lower gold sales.
Net income from Agribusiness decreased by 55% to US$ 20 million, mainly due to
lower crude palm oil selling prices. The group's Infrastructure and
Logistics division reported a 42% increase in net income, largely as a result
of 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 net profit for the first six months of 2023 was
US$422 million, compared to US$425 million in the equivalent period in 2022.
There was a loss attributable to shareholders of US$333 million, after
accounting for a net non-cash loss of US$755 million arising mainly from the
revaluation of investment properties. This compares with a profit
attributable to shareholders of US$292 million in the first half of 2022,
which included a net revaluation loss of US$133 million. The group's
financial position remains robust, with a strong balance sheet and liquidity.
On the Chinese mainland, the profit contribution from sales completions in the
Development Properties business was significantly lower compared to the first
half of 2022, due to a substantially fewer planned sales completions.
The pace of recovery in the Chinese residential market was mixed in the first
half of 2023, with sales performance varying between cities and individual
developments. The group's focus on premium residential products in a select
number of top-tier cities has resulted in a better sales performance than the
general market, but the weak economic outlook in China weighed on consumer
sentiment despite the introduction of policy support measures.
The group's attributable interest in contracted sales was US$745 million in
the period, compared to US$419 million and US$881 million in the first and
second halves of 2022, respectively. At 30th June 2023, the group had
US$2,274 million in sold but unrecognised contracted sales, compared with
US$2,087 million at the end of 2022.
During the period, the group completed the acquisition of equity stakes in two
existing projects in Nanjing and Wuhan from joint-venture partners. These were
acquired in both cases for consideration below development cost, resulting in
immediate net fair-value pre-tax accounting gains. The projects are mixed-use
in nature, with residential and commercial components.
In Singapore, where the group recognises profits principally on the percentage
of completion basis, the profit contribution in the period was broadly
unchanged compared to the same period in 2022. Market conditions remained
healthy. The group's attributable interest in contracted sales was US$487
million in the first half of 2023, compared to US$270 million and US$345
million in the first and second halves of 2022, respectively.
In the rest of Southeast Asia, total contributions were lower, due to the
timing of planned sales completions.
The group's investment properties business in Hong Kong remained resilient and
delivered a solid performance amidst challenging market conditions due to
uncertainty in the global financial markets. Physical and committed vacancy
was 6.9% and 6.2% at the end of June 2023, an increase from 4.9% and 4.7% at
the end of 2022, although significantly lower than the average vacancy in the
Central market. Negative rental reversions resulted in average office rents
decreasing in the first half of 2023.
The group's LANDMARK retail portfolio delivered an improved performance during
the first half of 2023, following several challenging years for the retail
market in Hong Kong. An increase in tenant sales and the removal of
temporary rent relief led to an increase in average retail rents. The
LANDMARK retail portfolio remains fully occupied.
Contributions from the group's CENTRAL series luxury retail malls in Beijing
and Macau increased, due to higher average rents as tenant sales experienced a
strong recovery in the first half.
Hongkong Land's office portfolio in Singapore continued to benefit from
healthy leasing momentum, and vacancy on a committed basis remained low.
Since Hongkong Land announced its US$1 billion share buyback programme in
September 2021, US$599 million has been invested.
Jardine Motor interests
In prior years, the Group recognised its 21% share of Zhongsheng's results
based on publicly available information with six months in arrears as
Zhongsheng's interim and annual results have historically been reported after
the Group's results announcements. Recognising the growing importance of
Zhongsheng to the Group's performance, from 2023, we recognise our share of
Zhongsheng's results on a contemporaneous (calendar year) basis using an
estimate of Zhongsheng's current period results based on an average of
recently published external analyst estimates. It is considered that this
change will provide the users of the financial statements with a more
meaningful insight into the current year underlying performance of the
Group.
The Group's underlying contribution from Zhongsheng for the period was US$89
million. The Group's 'catch up' share of Zhongsheng's results for 1st July
2022 to 31st December 2022 has been presented as a non-trading item in the
first half of 2023. In addition, the US$150 million underlying contribution
recognised in the first half of 2022 reflected performance for the six months
from July to December 2021.
In March, the Group sold its United Kingdom motors business, Jardine Motors
Group ('JMG'), for proceeds of US$402 million. The Group stopped
consolidating JMG's results from February 2023.
Jardine Pacific
Jardine Pacific reported a 10% lower underlying net profit of US$64 million in
the first half, compared with an underlying net profit of US$71 million in the
equivalent period in 2022. The lower underlying net profit was primarily due
to the absence of government support and subsidies received in the same period
last year. Excluding government support and subsidies, most businesses
performed better year-on-year, although a number of businesses were impacted
by labour challenges in the period.
Jardine Pacific operates within three main business segments: engineering,
consumer businesses and transport services.
Within the group's engineering businesses, JEC saw satisfactory performance
despite pressure on sales. There were improvements in a number of the
engineering units in Hong Kong and Thailand, but the business in Singapore
remains challenging. Jardine Schindler had an encouraging first half.
Although the New Installation market remains very competitive, a stronger
Existing Installation performance drove improved results. Gammon delivered
good profit growth, driven by effective cost control and higher financing
income, partially offset by lower project contributions (due to timing).
Gammon's order book remains strong and operational improvement projects are
continuing.
Within Jardine Pacific's consumer businesses, Jardine Restaurants Group
reported a net loss for the period, due to softer sales in its Hong Kong
operations, reflecting changing consumer behaviours post-pandemic. The
Taiwan and Vietnam businesses also faced headwinds.
The Zung Fu business in Hong Kong and Macau delivered an improved performance,
with a higher number of car deliveries and aftersales service jobs.
Within the group's transport services division, HACTL saw weaker performance
due to a reduction in cargo volume handled, as the overall air cargo market
contracted and competition increased as passenger flights returned. Jardine
Aviation Services reported a lower loss following the recovery in air travel,
with more flights handled as well as improved pricing from contract
renewals.
The disposal of the Group's shareholding in Greatview, announced in January,
is expected to be completed in the coming months.
Jardine Cycle & Carriage
JC&C reported an underlying profit of US$583 million in the first half of
2023, 12% higher than the same period in 2022, mainly due to higher
contributions from Astra and its Direct Motor Interests. Excluding the Astra
contribution of US$543 million, the business reported an underlying profit for
the period of US$40 million, 31% lower than the first half of 2022.
THACO contributed a US$15 million profit, 72% lower than the same period last
year, mainly due to lower automotive profits.
There was a 22% higher contribution of US$35 million from the group's Direct
Motor Interests, primarily due to an improved performance by Cycle &
Carriage Bintang in Malaysia and Tunas Ridean in Indonesia.
Among JC&C's other interests, the contribution from Siam City Cement was
41% lower than in the same period last year at US$9 million. REE's
contribution of US$11 million, based on its first-quarter results, was 16%
higher than the previous year, with an increasing focus on its investments in
renewable energy sources, including solar and hydropower. REE's higher
profit contribution was mainly due to higher earnings from its water treatment
and distribution businesses. During the period, JC&C increased its
interest in REE from 33.6% to 34.4%, through on-market purchases.
JC&C's investment in Vinamilk produced a dividend income of US$9 million,
in line with the same period last year. Vinamilk reported an 8% decrease in
net profit, mainly due to higher raw material and marketing costs.
DFI Retail Group
DFI's underlying profit improved significantly in the first half compared to
the same period last year. Within the group's subsidiaries, higher profits
in the Health & Beauty and Convenience divisions were partially offset by
lower profit from the Grocery Retail division. Underlying profits from
associates also improved significantly, through a combination of better profit
performance from Maxim's and reduced losses from Yonghui.
The group reported an underlying profit of US$33 million in the first half, an
improvement of US$85 million relative to a loss of US$52 million in the same
period last year.
Revenue from the group's Grocery Retail division in the first half was behind
the prior year. In North Asia, sales in the prior year were supported by
pantry-stocking behaviour during the fifth wave of COVID in Hong Kong.
Southeast Asia Grocery Retail revenue was also lower, impacted by the sale of
the Malaysian Grocery Retail business in early March 2023 and ongoing cautious
customer sentiment driven by rising cost of living pressures. As a result of
lower sales performance, overall Grocery Retail profit in the first half was
behind the comparable period last year.
The group's Convenience division reported like-for-like sales growth in the
first half relative to the prior year, driven by strong foot traffic recovery
and effective execution of new product development and promotional activity.
In particular, 7-Eleven Singapore reported double-digit like-for-like sales
growth in the first half relative to the prior year. Like-for-like sales
growth in South China accelerated in the second quarter relative to the first
quarter. Underlying profitability for the division improved significantly
relative to the prior year.
The Health & Beauty division reported strong double-digit like-for-like
sales growth in the first half, compared to prior year. Mannings Hong Kong,
in particular, saw very strong sales growth, which accelerated in the second
quarter. The strong sales recovery has been underpinned by effective
in-store execution and continued market share gains. Guardian also reported
strong underlying sales growth, particularly in Malaysia and Indonesia.
While still below pre-pandemic levels, underlying profit more than doubled in
the first half relative to prior year, supported by a recovery in customer
traffic, gross margin expansion and effective in-store execution despite
pressure from labour shortages.
The sales performance of the Home Furnishings division in the first half was
slightly behind the prior year, impacted by reduced demand for furniture, with
border reopening likely driving short-term discretionary spending toward
leisure activities. Despite challenges concerning sales performance,
underlying profit in the first half was largely in line with the prior year,
primarily due to strong cost control. In May 2023, IKEA Taiwan opened a
major fulfilment centre to support the e-commerce and fulfilment capability.
Maxim's, the group's 50%-owned associate, reported double-digit sales growth
and a turnaround in profit relative to the prior year, when it faced severe
challenges in the first half from COVID-related dining restrictions in Hong
Kong and on the Chinese mainland.
The group's share of Yonghui losses reduced relative to the prior year. This
was primarily driven by improved profit in the first quarter, underpinned by
improvement in gross margins and cost optimisation. Robinsons Retail continued
to report strong underlying sales and profit growth. Its reported profit,
however, was impacted by increased financing costs and reduced income from
associates.
Following the completion in March 2023 of the sale of the group's Malaysian
Grocery Retail business, the group also aims to complete the sale of several
associated properties in Malaysia in the second half of the year.
Mandarin Oriental
Mandarin Oriental reported an underlying profit of US$28 million for the first
half of the year, compared to a loss of US$21 million incurred in the
equivalent period in 2022. Underlying profit was more than double 2019.
The group's combined Revenue per Available Room ('RevPAR') was well ahead of
both 2022 and 2019 and strong rates were achieved in many locations, with
resorts performing particularly well. Occupancy also strengthened
significantly across all regions compared to the first half of 2022.
Particular strength was seen in Europe and the Middle East, where almost all
of the group's hotels achieved record rates and strong occupancies, with
RevPAR well above both 2022 and 2019 levels. In America, hotels also
delivered higher RevPAR than in prior years, driven by improved occupancy.
In Asia, performance from the Chinese mainland hotels improved significantly
from 2022, and approached 2019 levels, due to the relaxation of travel
restrictions. Hong Kong continued its recovery after the relaxation of travel
restrictions in early 2023. Mandarin Oriental, Hong Kong saw higher numbers
of both international and Chinese mainland visitors, leading to robust
improvements in both room rates and occupancy from 2022 levels.
The combined total revenue of hotels under management in the first half of
2023 was US$882 million, representing a 30% increase compared to the same
period last year, and 38% higher than 2019.
The group continues to have a strong pipeline of future openings, with four
new hotels and a standalone residences project announced in the first half.
Financial Position
The balance sheet and liquidity of the Group remain strong.
Shareholders' funds were US$29.0 billion at 30th June 2023, compared with
US$28.8 billion at 31st December 2022.
Consolidated net debt excluding financial services companies was US$6.9
billion at 30th June 2023, representing gearing of 12%, compared with 13% at
31st December 2022.
The Group had liquidity of US$12.7 billion as at 30th June 2023, consisting of
US$5.5 billion in cash reserves and US$7.2 billion in unused, committed debt
facilities.
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
(unaudited)
Six months ended 30th June Year ended 31st December
2023 2022 2022
Underlying Non-trading Total Underlying Non-trading Total Underlying Non-trading Total
business items US$m business items US$m business items US$m
performance US$m performance US$m performance US$m
US$m US$m US$m
Revenue (note 2) 18,307 - 18,307 18,277 - 18,277 37,724 - 37,724
Net operating costs (note 3) (16,155) 135 (16,020) (16,310) (35) (16,345) (33,598) (363) (33,961)
Change in fair value of investment properties - (852) (852) - (113) (113) - (930) (930)
Operating profit 2,152 (717) 1,435 1,967 (148) 1,819 4,126 (1,293) 2,833
Net financing charges
- financing charges (349) - (349) (294) - (294) (625) - (625)
- financing income 126 - 126 87 - 87 197 - 197
(223) - (223) (207) - (207) (428) - (428)
Share of results of associates and joint ventures (note 4)
- before change in fair value of investment properties 647 112 759 610 (106) 504 1,232 (411) 821
- change in fair value of investment properties - (9) (9) - (21) (21) - (3) (3)
647 103 750 610 (127) 483 1,232 (414) 818
Profit before tax 2,576 (614) 1,962 2,370 (275) 2,095 4,930 (1,707) 3,223
Tax (note 5) (456) (5) (461) (445) 6 (439) (964) 4 (960)
Profit after tax 2,120 (619) 1,501 1,925 (269) 1,656 3,966 (1,703) 2,263
Attributable to:
Shareholders of the Company 823 (257) 566 747 (324) 423 1,584 (1,230) 354
(notes 6 & 7)
Non-controlling interests 1,297 (362) 935 1,178 55 1,233 2,382 (473) 1,909
2,120 (619) 1,501 1,925 (269) 1,656 3,966 (1,703) 2,263
US$ US$ US$ US$ US$ US$
Earnings per share (note 6)
- basic 2.84 1.95 2.60 1.47 5.49 1.22
- diluted 2.84 1.95 2.60 1.47 5.49 1.22
Jardine Matheson Holdings Limited
Consolidated Statement of Comprehensive Income
(unaudited) Year ended
Six months ended 31st
30th June December
2023 2022 2022
US$m US$m US$m
Profit for the period 1,501 1,656 2,263
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Net exchange translation gain/(loss) arising during the year 239 (435) (761)
Remeasurements of defined benefit plans - 1 37
Net revaluation surplus on right-of-use assets before transfer to investment - - 39
properties
Tax on items that will not be reclassified - - (7)
239 (434) (692)
Share of other comprehensive expense of associates and joint ventures (22) (279) (467)
217 (713) (1,159)
Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences
- net gain/(loss) arising during the period 51 (360) (526)
- transfer to profit and loss 113 - 4
164 (360) (522)
Revaluation of other investments at fair value
through other comprehensive income
- net gain/(loss) arising during the period 1 (12) (20)
- transfer to profit and loss - (2) (2)
1 (14) (22)
Cash flow hedges
- net (loss)/gain arising during the period (34) 55 92
- transfer to profit and loss (7) (5) (7)
(41) 50 85
Tax relating to items that may be reclassified 3 (11) (11)
Share of other comprehensive expense of associates and joint ventures (130) (370) (487)
(3) (705) (957)
Other comprehensive income/(expense) for the period, net of tax 214 (1,418) (2,116)
Total comprehensive income for the period 1,715 238 147
Attributable to:
Shareholders of the Company 562 (353) (660)
Non-controlling interests 1,153 591 807
1,715 238 147
Jardine Matheson Holdings Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2023 2022 2022
US$m US$m US$m
Assets
Intangible assets 2,544 2,577 2,528
Tangible assets 6,077 5,905 5,853
Right-of-use assets 3,987 4,052 4,184
Investment properties 30,866 32,500 31,813
Bearer plants 490 484 465
Associates and joint ventures 17,270 17,730 17,856
Other investments 2,973 2,950 2,801
Non-current debtors 3,700 3,008 3,222
Deferred tax assets 646 522 575
Pension assets 15 24 17
Non-current assets 68,568 69,752 69,314
Properties for sale 3,515 3,515 3,311
Stocks and work in progress 3,182 2,957 3,513
Current debtors 7,230 7,163 6,873
Current investments 56 15 18
Current tax assets 146 143 156
Bank balances and other liquid funds
- non-financial services companies 5,128 5,725 5,526
- financial services companies 410 645 372
5,538 6,370 5,898
19,667 20,163 19,769
Assets classified as held for sale 139 82 65
Current assets 19,806 20,245 19,834
Total assets 88,374 89,997 89,148
(unaudited) At 31st
At 30th June December
2023 2022 2022
US$m US$m US$m
Equity
Share capital 73 72 73
Share premium and capital reserves 23 26 26
Revenue and other reserves 28,886 29,130 28,727
Shareholders' funds 28,982 29,228 28,826
Non-controlling interests 26,630 27,846 27,371
Total equity 55,612 57,074 56,197
Liabilities
Long-term borrowings
- non-financial services companies 8,988 11,274 10,541
- financial services companies 1,675 1,433 1,532
10,663 12,707 12,073
Non-current lease liabilities 2,884 2,842 2,951
Deferred tax liabilities 750 727 791
Pension liabilities 386 445 368
Non-current creditors 210 180 191
Non-current provisions 351 311 336
Non-current liabilities 15,244 17,212 16,710
Current borrowings
- non-financial services companies 3,073 2,269 2,500
- financial services companies 2,066 1,624 1,663
5,139 3,893 4,163
Current lease liabilities 715 771 772
Current tax liabilities 508 565 672
Current creditors 10,953 10,308 10,459
Current provisions 203 174 175
Current liabilities 17,518 15,711 16,241
Total liabilities 32,762 32,923 32,951
Total equity and liabilities 88,374 89,997 89,148
Jardine Matheson Holdings Limited
Consolidated Statement of Changes in Equity
Share Share Capital Revenue Asset Hedging Exchange Own Attributable to shareholders of the Company Attributable Total
capital premium reserves reserves revaluation reserves reserves shares US$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 2023 (unaudited)
At 1st January 2023 73 - 26 28,887 2,272 55 (2,487) - 28,826 27,371 56,197
Total comprehensive income - - - 567 - (27) 22 - 562 1,153 1,715
Dividends paid by the Company (note 8) - - - (463) - - - - (463) - (463)
Dividends paid to non-controlling interests - - - - - - - - - (1,735) (1,735)
Employee share option schemes - - 1 - - - - - 1 1 2
Scrip issued in lieu of dividends 1 (1) - 132 - - - - 132 - 132
Repurchase of shares (1) - - (135) - - - - (136) - (136)
Capital contribution from non-controlling interests - - - - - - - - - 3 3
Subsidiaries disposed of - - - - - - - - - 10 10
Change in interests in subsidiaries - - - 65 - - - - 65 (170) (105)
Change in interests in associates and joint ventures - - - (5) - - - - (5) (3) (8)
Transfer - 1 (4) 3 - - - - - - -
At 30th June 2023 73 - 23 29,051 2,272 28 (2,465) - 28,982 26,630 55,612
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
At the Company's annual general meeting on 5th May 2022, shareholders approved
the cancellation of the 59% shareholding in the Company held by its
subsidiaries 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 that commenced
in 2021.
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$m
Year ended 31st December 2022
At 1st January 2022 179 - 25 34,926 2,242 (18) (1,350) (6,223) 29,781 28,587 58,368
Total comprehensive income - - - 374 30 73 (1,137) - (660) 807 147
Dividends paid by the Company - - - (607) - - - - (607) - (607)
Dividends paid to non-controlling interests - - - - - - - - - (994) (994)
Unclaimed dividends forfeited - - - 2 - - - - 2 - 2
Issue of shares - 1 - - - - - - 1 - 1
Employee share option schemes - - 4 - - - - - 4 2 6
Scrip issued in lieu of dividends 1 (1) - 184 - - - - 184 - 184
Repurchase of shares (1) (2) - (168) - - - - (171) - (171)
Reduction of capital (106) (1) - (6,116) - - - 6,223 - - -
Capital contribution from non-controlling interests - - - - - - - - - 4 4
Share purchased for a share-based incentive plan
in a subsidiary - - - (15) - - - - (15) (5) (20)
Change in interests in subsidiaries - - - 322 - - - - 322 (1,030) (708)
Change in interests in associates and joint ventures - - - (15) - - - - (15) - (15)
Transfer - 3 (3) - - - - - - - -
At 31st December 2022 73 - 26 28,887 2,272 55 (2,487) - 28,826 27,371 56,197
Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
(unaudited) Year ended 31st December
Six months ended
30th June
2023 2022 2022
US$m US$m US$m
Operating activities
Cash generated from operations 3,189 2,428 5,287
Interest received 108 75 177
Interest and other financing charges paid (321) (263) (564)
Tax paid (743) (485) (1,006)
2,233 1,755 3,894
Dividends from associates and joint ventures 513 428 931
Cash flows from operating activities 2,746 2,183 4,825
Investing activities
Purchase of subsidiaries (31) (5) (19)
Purchase of associates and joint ventures (note 10(a)) (70) (193) (658)
Purchase of other investments (note 10(b)) (167) (300) (645)
Purchase of intangible assets (80) (68) (154)
Purchase of tangible assets (827) (424) (1,014)
Additions to right-of-use assets (5) (33) (53)
Additions to investment properties (82) (56) (123)
Additions to bearer plants (17) (18) (39)
Advances to and repayments to associates and (802)
joint ventures (note 10(c)) (148) (556)
Advances from and repayments from associates and 778 332 416
joint ventures (note 10(d))
Sale of subsidiaries (note 10e)) 303 - -
Sale of associates and joint ventures 11 7 30
Sale of other investments (note 10(f)) 68 145 228
Sale of intangible assets - - 3
Sale of tangible assets 274 29 230
Sale of right-of-use assets 7 - 7
Cash flows from investing activities 14 (1,140) (2,593)
Financing activities
Issue of shares - 1 1
Capital contribution from non-controlling interests 3 2 4
Acquisition of the remaining interest in Jardine Strategic (3) (21) (21)
Change in interests in other subsidiaries (note 10(g)) (105) (360) (708)
Purchase of own shares (136) (153) (173)
Purchase of shares for a share-based incentive plan in - (20) (20)
a subsidiary
Drawdown of borrowings 5,175 4,248 9,047
Repayment of borrowings (5,660) (4,048) (9,113)
Principal elements of lease payments (430) (432) (875)
Dividends paid by the Company (331) (310) (423)
Dividends paid to non-controlling interests (1,732) (671) (994)
Cash flows from financing activities (3,219) (1,764) (3,275)
Net decrease in cash and cash equivalents (459) (721) (1,043)
Cash and cash equivalents at beginning of period 5,879 7,278 7,278
Effect of exchange rate changes 108 (199) (356)
Cash and cash equivalents at end of period 5,528 6,358 5,879
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
(unaudited) Year ended 31st December
Six months ended
30th June
2023 2022 2022
US$m US$m US$m
Reportable segments
Jardine Pacific 64 71 182
Jardine Motor Interests 89 172 299
Hongkong Land 224 220 405
DFI Retail 26 (40) 22
Mandarin Oriental 22 (17) 6
Jardine Cycle & Carriage 37 67 135
Astra 417 349 691
879 822 1,740
Corporate and other interests (56) (75) (156)
Underlying profit attributable to shareholders* 823 747 1,584
Decrease in fair value of investment properties (482) (63) (604)
Sale of Zung Fu China - - (28)
Other non-trading items 225 (261) (598)
Profit attributable to shareholders 566 423 354
Analysis of Jardine Pacific's contribution
Jardine Schindler 21 17 36
JEC 16 16 53
Gammon 17 13 39
Jardine Restaurants (6) 13 19
Transport Services 10 11 23
Zung Fu Hong Kong 6 3 12
Corporate and other interests - (2) -
64 71 182
Analysis of Jardine Motor Interests'
contribution
Zhongsheng 89 150 263
Jardine Motors Group United Kingdom 1 20 35
Corporate (1) 2 1
89 172 299
* Underlying profit attributable to shareholders is the measure of profit
adopted by the Group in accordance with IFRS 8 'Operating Segments'.
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 2022
annual financial statements. A standard and a number of amendments were
effective from 1st January 2023. Those relevant to the Group's operations
are set out below:
IFRS 17 'Insurance Contracts'
(effective from 1st January 2023)
The standard covers recognition, measurement, presentation and disclosure for
insurance contracts and is applicable to the Group's insurance businesses in
Indonesia. Under IFRS 17, all profits are recognised in the profit and loss
over the life of the contracts as insurance services are provided. Prior to
the adoption of IFRS 17, for certain insurance contracts, profits were
recognised in the profit and loss on initial recognition of the contracts.
The different timing of profit recognition will result in an increase in
liabilities upon adoption of IFRS 17. A portion of profits, previously
recognised and accumulated in equity, prior to 2023, will now be recorded as
liability under IFRS 17. It has been assessed that the net impact on
adoption of the standard is not material to the Group's consolidated financial
statements.
Amendments to IAS 12-Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
(effective from 1st January 2023)
The amendment requires deferred tax to be recognised on transactions that, on
initial recognition, give rise to equal amounts of taxable and deductible
temporary differences. They typically apply to transactions such as leases of
lessees and decommissioning obligations and require the recognition of
additional deferred tax assets and liabilities.
Amendments to IAS 12-International Tax Reform - Pillar Two Model Rules
(effective for annual reporting period commencing on or after 1st January
2023)
The amendment provides a temporary mandatory exception from deferred tax
accounting in respect of Pillar Two income taxes and certain additional
disclosure requirements. The Group is in the process of assessing the
estimated impact of Pillar Two income taxes to its consolidated financial
statements and appropriate disclosures will be made in the financial statement
for the year ending 31st December 2023.
The Group has not early adopted any amendments that have been issued but not
yet effective.
2. Revenue
Jardine Jardine Hongkong DFI Mandarin Jardine Astra Intersegment Group
Pacific Motor Land Retail Oriental Cycle & US$m transactions US$m
US$m Interests US$m US$m US$m Carriage US$m
US$m US$m
Six months ended 30th June 2023
By product and service:
Property 2 - 670 - - - 23 (4) 691
Motor vehicles 257 165 - - - 860 4,331 - 5,613
Retail and restaurants 423 - - 4,574 - - - - 4,997
Financial services - - - - - - 948 - 948
Engineering, heavy equipment, mining and construction
296 - - - - - 4,562 (22) 4,836
Hotels - - - - 261 - - (1) 260
Other - - - - - - 962 - 962
978 165 670 4,574 261 860 10,826 (27) 18,307
Revenue from contracts with customers:
Recognised at a point in time 712 165 94 4,574 78 832 9,597 (27) 16,025
Recognised over time 264 - 9 - 174 24 148 - 619
976 165 103 4,574 252 856 9,745 (27) 16,644
Revenue from other sources:
Rental income from investment properties 2 - 464 - - - 7 - 473
Revenue from financial services companies
- - - - - - 948 - 948
Other - - 103 - 9 4 126 - 242
2 - 567 - 9 4 1,081 - 1,663
978 165 670 4,574 261 860 10,826 (27) 18,307
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
Gross revenue, comprises revenue together with 100% of revenue from associates
and joint ventures, is analysed as follows:
Six months ended 30th June
2023 2022
US$m US$m
By business:
Jardine Pacific 3,334 2,941
Jardine Motor Interests 12,066 14,702
Hongkong Land 2,642 2,543
DFI Retail 13,488 14,028
Mandarin Oriental 440 356
Jardine Cycle & Carriage 3,486 4,023
Astra 19,467 17,547
Intersegment transactions (141) (146)
54,782 55,994
3. Net Operating Costs
Six months ended 30th June
2023 2022
US$m US$m
Cost of sales (13,230) (13,407)
Other operating income 360 250
Selling and distribution costs (1,957) (1,984)
Administration expenses (1,144) (1,128)
Other operating expenses (49) (76)
(16,020) (16,345)
Net operating costs included the following gains/(losses) from non-trading
items:
Change in fair value of other investments 55 (30)
Impairment of assets - (6)
Sale of businesses (1) 5
Sale of property interests 82 -
Other (1) (4)
135 (35)
4. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2023 2022
US$m US$m
By business:
Jardine Pacific 55 (54)
Jardine Motor Interests 190 150
Hongkong Land 155 143
DFI Retail 5 (65)
Mandarin Oriental 1 (1)
Jardine Cycle & Carriage 54 93
Astra 301 228
Corporate (11) (11)
750 483
Share of results of associates and joint ventures included the following
gains/(losses) from non-trading items:
Change in fair value of investment properties (9) (21)
Change in fair value of other investments 12 7
Impairment of assets - (113)
Share of Zhongsheng's results for 1st July 2022 to 101 -
31st December 2022 (note 7)
Other (1) -
103 (127)
Results are shown after tax and non-controlling interests in the associates
and joint ventures.
5. Tax
Six months ended 30th June
2023 2022
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (571) (485)
Deferred tax 110 46
(461) (439)
China (59) (53)
Southeast Asia (391) (370)
United Kingdom (1) (5)
Rest of the world (10) (11)
(461) (439)
Tax relating to components of other comprehensive income or expense is
analysed as follows:
Cash flow hedges 3 (11)
Tax on profits has been calculated at rates of taxation prevailing in the
territories in which the Group operates.
The Group has applied the exception to recognising and disclosing information
about deferred tax assets and liabilities relating to Pillar Two income taxes.
Share of tax charge of associates and joint ventures of US$140 million (2022:
US$205 million) is included in share of results of associates and joint
ventures. Share of tax charge of US$1 million (2022: US$21 million) is
included in other comprehensive income of associates and joint ventures.
6. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders
of US$566 million (2022: US$423 million) and on the weighted average number of
290 million (2022: 288 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to
shareholders of US$566 million (2022: US$423 million), which is after
adjusting for the effects of the conversion of dilutive potential ordinary
shares of subsidiaries and on the weighted average number of 290 million
(2022: 288 million) shares in issue during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2023 2022
Weighted average number of shares in issue 290 644
Company's share of shares held by subsidiaries - (356)
Weighted average number of shares for basic earnings 290 288
per share calculation
Adjustment for shares deemed to be issued for no consideration under the - -
Senior Executive Share
Incentive Schemes
Weighted average number of shares for diluted earnings per share calculation 290 288
Additional basic and diluted earnings per share are also calculated based on
underlying profit attributable to shareholders. A reconciliation of earnings
is set out below:
Six months ended 30th June
2023 2022
US$m Basic Diluted earnings per share US$m Basic Diluted earnings per share
earnings per share US$ US$ earnings per share US$
US$
Profit attributable to shareholders 566 1.95 1.95 423 1.47 1.47
Non-trading items (note 7) 257 324
Underlying profit attributable to shareholders 823 2.84 2.84 747 2.60 2.60
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.
An analysis of non-trading items after interest, tax and non-controlling
interests is set out below:
Six months ended 30th June
2023 2022
US$m US$m
By business:
Jardine Pacific 35 (95)
Jardine Motor Interests 153 (1)
Hongkong Land (402) (70)
DFI Retail (19) (4)
Mandarin Oriental (113) 2
Jardine Cycle & Carriage 45 (125)
Astra 5 99
Corporate and other interests 39 (130)
(257) (324)
Change in fair value of investment properties
- Hongkong Land (402) (70)
- other (80) 7
(482) (63)
Change in fair value of other investments 54 (148)
Impairment of assets - (114)
Share of Zhongsheng's results for 1st July 2022 to 101 -
31st December 2022
Sale of businesses 11 4
Sale of property interests 61 -
Other (2) (3)
(257) (324)
Zhongsheng's interim and annual results have historically been reported after
the Group's results announcements. In previous years, the Group has
recognised its 21% share of Zhongsheng's results based on publicly available
reported results as at the Group's reporting date. Hence, Zhongsheng's
contribution in the Group's 2022 half-year financial statements represented
its share of Zhongsheng's results for the period from 1st July 2021 to 31st
December 2021. From 2023, however, the Group has determined that a better
representation of Zhongsheng's current performance would be given using an
estimate of its share of Zhongsheng's results on a calendar year basis, based
on an average of recent external analyst estimates.
This change has been adopted prospectively from 1st January 2023 as a change
in estimate such that the Group's results for the six months ended 30th June
2023 include its share of Zhongsheng's results for a twelve-month period from
1st July 2022 to 30th June 2023. The Group's share of Zhongsheng's results
for the six months ended 30th June 2023 are presented as underlying profit,
and the results for 1st July 2022 to 31st December 2022 have been presented as
a non-trading item.
8. Dividends
Six months ended 30th June
2023 2022
US$m US$m
Final dividend in respect of 2022 of US¢160.00 463 1,114
(2021: US¢156.00) per share
Company's share of dividends paid on the shares held by subsidiaries - (666)
463 448
An interim dividend in respect of 2023 of US¢60.00 (2022: US¢55.00) per
share amounting to a total of US$174 million (2022: US$159 million) is
declared by the Board and will be accounted for as an appropriation of revenue
reserves in the year ending 31st December 2023.
9. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with
carrying amounts at 30th June 2023 and 31st December 2022 are as follows:
Fair value of hedging instruments Fair value through profit and loss Fair value through other comprehensive income Financial assets at amortised costs Other financial liabilities Total Fair
US$m US$m US$m US$m US$m carrying value
amount US$m
US$m
30th June 2023
Financial assets measured at
fair value
Other investments
- equity investments - 1,888 - - - 1,888 1,888
- debt investments - 10 859 - - 869 869
- limited partnership investment funds - 272 - - - 272 272
Derivative financial instruments 77 - - - - 77 77
77 2,170 859 - - 3,106 3,106
Financial assets not measured at
fair value
Debtors - - - 9,142 - 9,142 8,437
Bank balances - - - 5,538 - 5,538 5,538
- - - 14,680 - 14,680 13,975
Financial liabilities measured at
fair value
Derivative financial instruments (32) - - - - (32) (32)
Contingent consideration payable - (20) - - - (20) (20)
(32) (20) - - - (52) (52)
Financial liabilities not measured at
fair value
Borrowings - - - - (15,802) (15,802) (15,655)
Lease liabilities - - - - (3,599) (3,599) (3,599)
Trade and other - - - - (8,460) (8,460) (8,460)
payable excluding non-financial liabilities
- - - - (27,861) (27,861) (27,714)
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 2022
Financial assets measured at
fair value
Other investments
- equity investments - 1,790 - - - 1,790 1,790
- debt investments - 10 763 - - 773 773
- limited partnership investment funds - 256 - - - 256 256
Derivative financial instruments 185 - - - - 185 185
185 2,056 763 - - 3,004 3,004
Financial assets not measured at
fair value
Debtors - - - 8,463 - 8,463 8,067
Bank balances - - - 5,898 - 5,898 5,898
- - - 14,361 - 14,361 13,965
Financial liabilities measured at
fair value
Derivative financial instruments (24) - - - - (24) (24)
Contingent consideration payable - (9) - - - (9) (9)
(24) (9) - - - (33) (33)
Financial liabilities not measured at
fair value
Borrowings - - - - (16,236) (16,236) (15,612)
Lease liabilities - - - - (3,723) (3,723) (3,723)
Trade and other - - - - (8,239) (8,239) (8,239)
payable excluding non-financial liabilities
- - - - (28,198) (28,198) (27,574)
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 2023 and the year ended 31st December 2022.
The table below analyses financial instruments carried at fair value at 30th
June 2023 and
31st December 2022, 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 2023
Assets
Other investments
- equity investments 1,559 57 272 1,888
- debt investments 859 - 10 869
- limited partnership investment funds - - 272 272
2,418 57 554 3,029
Derivative financial instruments at
fair value
- through other comprehensive income - 77 - 77
2,418 134 554 3,106
Liabilities
Contingent consideration payable - - (20) (20)
Derivative financial instruments at
fair value
- through other comprehensive income - (31) - (31)
- through profit and loss - (1) - (1)
- (32) (20) (52)
31st December 2022
Assets
Other investments
- equity investments 1,484 54 252 1,790
- debt investments 763 - 10 773
- limited partnership investment funds - - 256 256
2,247 54 518 2,819
Derivative financial instruments at
fair value
- through other comprehensive income - 185 - 185
2,247 239 518 3,004
Liabilities
Contingent consideration payable - - (9) (9)
Derivative financial instruments at
fair value
- through other comprehensive income - (20) - (20)
- through profit and loss - (4) - (4)
- (24) (9) (33)
There were no transfers among the three categories for the six months ended
30th June 2023. During the year ended 31st December 2022, equity investments
amounted to US$233 million was transferred from 'Unobservable inputs' to
'Quoted prices in active markets'.
Movement of unlisted equity and debt investments, and limited partnership
investment funds, which are valued based on unobservable inputs during the
year ended 31st December 2022 and six months ended 30th June 2023 are as
follows:
US$m
At 1st January 2022 559
Exchange differences (28)
Additions 217
Disposals (2)
Transfer to 'quoted prices in active markets' (233)
Net change in fair value during the year included in profit and loss 5
At 31st December 2022 and 1st January 2023 518
Exchange differences 10
Additions 15
Net change in fair value during the period included in profit and loss 11
At 30th June 2023 554
(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 2023 mainly included US$26 million for Hongkong Land's investment in
the Chinese mainland; US$8 million for Jardine Cycle & Carriage's
additional interest in Refrigeration Electrical Engineering Corporation and
US$26 million for Astra's acquisition of a 25% interest in PT Equinix
Indonesia Jkt.
Purchases 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 interest in Livi Bank Limited in Hong Kong.
(b) Purchase of other investments for the six months ended 30th June 2023
mainly included Astra's acquisition of securities of US$152 million; and
Corporate's additional investments in limited partnership investment funds for
US$13 million.
Purchases 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.
(c) Advances to and repayments to associates and joint ventures for the
six months ended 30th June 2023 included Hongkong Land's advances to and
repayments to its property joint ventures of US$127 million and Mandarin
Oriental's advance to its associate hotel of US$21 million.
Advances to and repayments to associates and joint ventures for
the six months ended 30th June 2022 mainly included Hongkong Land's advances
to and repayments to its property joint ventures.
(d) Advances from and repayments from associates and joint ventures for
the six months ended 30th June 2023 mainly included Hongkong Land's advances
from and repayments from joint ventures of US$710 million and Mandarin
Oriental's repayments from its associate and joint venture hotels of US$66
million.
Advances from and repayments from associates and joint ventures
for the six months ended 30th June 2022 mainly included Hongkong Land's
advances from and repayments from joint ventures.
(e) Sale of subsidiaries
2023
US$m
Non-current assets 398
Current assets 458
Non-current liabilities (285)
Current liabilities (406)
Non-controlling interests 10
Net assets 175
Cumulative exchange translation difference 113
Net profit on disposal 6
Net sales proceeds 294
Consideration settled and payable 54
Transaction costs payable 10
Cash and cash equivalents of subsidiaries disposed of (55)
Net cash inflow 303
Net cash inflow for sale of subsidiaries for the six months ended 30th June
2023 comprised US$359 million inflow from Jardine Motor Interests' sale of its
United Kingdom operation and US$56 million cash outflow from DFI Retail's
divestment of its Malaysian grocery retail business.
(f) Sale of other investments for the six months ended 30th June 2023
and 2022 mainly included sale of securities in Astra.
(g) Change in interests in subsidiaries
Six months ended 30th June
2023 2022
US$m US$m
Increase in attributable interests
- Hongkong Land (55) (279)
- Jardine Cycle & Carriage (32) (73)
- Mandarin Oriental (18) -
- other - (8)
(105) (360)
11. Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2023 and 31st December 2022 amounted to
US$2,306 million and US$2,500 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. Although the proceedings
were commenced in April 2021, they are still ongoing. It is anticipated that
the court appraisal process will not be concluded for at least a further 12
months and will likely extend further. The Board believes that the US$33 per
share that was paid represented fair value to Jardine Strategic minority
shareholders and is of the opinion that no provision is required in relation
to these claims.
Various Group companies are involved in litigation arising in the ordinary
course of their respective businesses. Having reviewed outstanding claims
and taking into account legal advice received, the Directors are of the
opinion that adequate provisions have been made in the condensed financial
statements.
12. Related Party Transactions
In the normal course of business the Group undertakes a variety of
transactions with certain of its associates and joint ventures.
Six months ended 30th June
2023 2022
US$m US$m
Sales to associates and joint ventures
- motor vehicles and spare parts 442 353
- coal 603 467
- crude palm oil 189 179
1,234 999
Purchase from associates and joint ventures
- motor vehicles and spare parts 3,254 2,708
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.
● Political and economic risk
● Customers' changing behaviours and market competition
● Investment, partnerships and franchise rights
● IT, facilities and cybersecurity
● Concentration risk
● Talent and labour
● Environmental and climate risk
● Third-party service provider and supply chain management
● Change management, cultural agility and strategic initiatives
● Health, safety and product quality
● Compliance with and changes to laws and regulations
● Pandemic
● Customer exposures and claims on customers
● Financial strength and funding
● Governance and misconduct
For greater detail, please refer to pages 84 to 92 of the Company's 2022
Annual Report, a copy of which is available on the Company's website at
www.jardines.com.
Responsibility Statements
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements prepared in accordance with IAS
34 'Interim Financial Reporting', give a true and fair view of the assets,
liabilities, financial position and profit and losses of the Group; and
(b) the interim management report includes a fair review of all
information required to be disclosed under Rules 4.2.7 and 4.2.8 of the
Disclosure Guidance and Transparency Rules issued by the Financial Conduct
Authority of the United Kingdom.
For and on behalf of the Board
John Witt
Graham Baker
Directors
Dividend Information for Shareholders
The interim dividend of US¢60 per share will be payable on 11th October 2023
to shareholders on the register of members at the close of business on 18th
August 2023. The shares will be quoted ex-dividend on 17th August 2023 and the
share registers will be closed from 21st to 25th August 2023, 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 2023 interim dividend by notifying the United
Kingdom transfer agent in writing by 22nd September 2023. The Sterling
equivalent of dividends declared in United States Dollars will be calculated
by reference to a rate prevailing on 27th September 2023.
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 18th August 2023, 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 17th
August 2023.
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%), Hongkong Land
(53.1%), DFI Retail Group (77.5%), Mandarin Oriental (80.2%), Jardine Cycle
& Carriage (76.8%) ('JC&C') and Zhongsheng (21.1%). JC&C in turn
has a 50.1% shareholding in Astra.
Jardine Matheson Holdings Limited is incorporated in Bermuda and has a primary
listing in the standard segment of 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 further information, please contact:
Jardine Matheson Limited
Graham Baker / Suzanne Cheuk (852) 2843 8218 / 8262
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 2023 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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