REG - Jardine Matheson Hdg - Interim Management Statement

Jardine Matheson HoldingsAnnouncement

11/11/2021 09:50

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RNS Number : 0985S  Jardine Matheson Hldgs Ltd  11 November 2021

11th November 2021

For immediate release

 

Jardine Matheson Holdings Limited

Interim Management Statement

11th November 2021 - Jardine Matheson Holdings Limited (the 'Company') today
publishes its Interim Management Statement for the third quarter of 2021.

There was an encouraging improvement in performance in many of the Group's
businesses in the third quarter compared with the same period last year, but
the Group continues to face challenges caused by the COVID-19 pandemic and the
measures taken to control it.  Conditions are expected to remain uncertain
across the Group's markets for the remainder of the year. Nevertheless, the
Group remains resilient and well-positioned to achieve its long-term growth
objectives, with a strong balance sheet and liquidity position.

In these challenging times, we are grateful to our colleagues across the Group
who continue to respond with professionalism, resilience and dedication in the
face of significant uncertainties.

Looking at the individual performances of the Group's businesses, Jardine
Pacific reported a lower contribution in the third quarter compared with the
same period last year, primarily due to a reduction in government support in
the current period, with a number of businesses seeing a fall in
profitability.  Excluding the impact of prior year government support,
however, most businesses delivered improved performances.

Jardine Schindler saw a fall in profitability in the quarter, reflecting lower
margins driven by the competitive environment.  Gammon and JEC both reported
lower profits, reflecting reduced sales which were primarily due to project
timing, although margins improved.  The results of Jardine Restaurant Group
fell as a result of the resurgence of COVID-19 in some markets and rising
supply chain costs, but the business saw good profit growth driven by solid
delivery sales in Taiwan and the benefits realised from ongoing process
re-engineering projects.

HACTL reported a satisfactory performance, with the business benefitting from
the increase in air cargo tonnage which has partly resulted from the
disruption in sea-freight and associated material cost increases in shipping,
although it has also faced pricing pressure.  There was a lower contribution
from Greatview principally due to rising raw material costs.

Jardine Motors saw its earnings in the third quarter increase compared with
the same period last year, mainly driven by a strong performance on the
Chinese mainland.  Despite lower sales volume, Zung Fu China and Zhongsheng
both saw higher margins and profitability on new car sales due to limited
stock supply.  However, the dealerships in the United Kingdom reported a
small decline as volume was impacted by nationwide supply issues.  The
transfer of Zung Fu China to Zhongsheng was completed in early October.

Hongkong Land's Central office portfolio continued to perform relatively well
due to its high quality and unique positioning, despite rising office
vacancies across the city.  Although Hong Kong's borders remained closed to
visitors, the group's retail sales increased compared to the second quarter of
2021 and were higher than the same period in 2020, resulting from the
provision of lower levels of temporary rent relief to tenants.  Rental
reversions in the group's Singapore office portfolio were positive in the
period.

Hongkong Land's Development Properties business saw market sentiment on the
Chinese mainland weaken in the quarter relative to the first half of the year,
amidst tightened credit conditions for the property sector.  Contracted sales
at the group's projects, however, remained in line with expectations.

The overall performance of DFI Retail Group ('DFI') in the third quarter
continued to be affected by the pandemic as well as underlying losses reported
by its key associate, Yonghui, and its results were significantly lower than
the same period in 2020, when performance benefitted from both panic buying
and government support.  Grocery Retail like-for-like sales were lower in the
third quarter than in the same period last year, as customer buying behaviours
continued to normalise from a high sales base in 2020, but there continues to
be encouraging progress in the transformation of the business and there was
strong growth in underlying profitability in the quarter compared to the third
quarter of 2019, before the onset of the pandemic.  The group's Convenience
business saw improved like-for-like sales, driven primarily by strong growth
in Hong Kong and Macau, and underlying profitability in the third quarter
improved relative to the first half.

Like-for-like sales for the group's Health and Beauty businesses improved in
the third quarter relative to the first half, driven predominantly by Mannings
Hong Kong and Guardian Singapore. However, reduced levels of government
support impacted profitability in the quarter compared to the same period last
year.  More generally, relative to historical trends, profitability continued
to be significantly affected by an ongoing lack of tourist custom and reduced
footfall in malls in key Southeast Asian markets.

Mandarin Oriental saw trading conditions generally improve towards the end of
the second quarter, and this trend continued into the third quarter.
Performance did, however, vary by market depending on government actions to
curtail the spread of COVID-19.  In Asia, most properties were dependent on
domestic business with international borders remaining effectively closed, and
as a consequence both occupancy levels and room rates remained low. The
exception was the Chinese mainland, where operations continued to gain from
strong demand in a large domestic market.  The operating environment in both
Europe and America also improved substantially, with results benefitting from
the relaxation of travel and freedom of movement restrictions, and ongoing
government support in a number of markets.

Overall, Jardine Cycle & Carriage ('JC&C') performed well in the third
quarter, reflecting improvements across all parts of its portfolio.
Year-to-date underlying profit recovered substantially, compared to the same
period in 2020, although the group's overall results for the first nine months
of 2021 were still slightly lower than the same period in 2019, prior to the
onset of the pandemic.  Astra delivered a significantly improved performance
across its divisions, notwithstanding the continuing COVID-19 restrictions
during the period.  There was a particularly strong contribution from
automotive, where car sales volume benefitted from the implementation of
temporary luxury car sales incentives; and from a number of Astra's other
businesses which benefitted from higher commodity prices.  Astra's financial
services division benefitted from higher lending volumes and lower loan loss
provisions.

JC&C's Direct Motor Interests also delivered an improved performance, with
Cycle & Carriage in Singapore achieving higher sales volume and improved
margins, particularly for its premium car segment and used car operations, and
Cycle & Carriage Bintang in Malaysia continuing to benefit from a
reduction in government sales tax and lower operating costs. Tunas Ridean in
Indonesia reported higher contributions from its automotive and financial
services operations.

JC&C's Other Strategic Interests performed well in the first nine months
of the year, although the third quarter performance of some businesses was
affected by lockdown measures implemented in Vietnam and Thailand.  Many of
THACO's automotive showrooms were closed during this period, but they
gradually re-opened in October.  REE's businesses remained largely
operational during the lockdown.  Siam City Cement saw lower sales volumes
and selling prices as construction and infrastructure activities slowed, and
it was also adversely impacted by higher energy costs.

Jardine Matheson is a diversified Asian-based business group with unsurpassed
experience in the region.  Its interests include Jardine Pacific, Jardine
Motors, Hongkong Land, Dairy Farm, Mandarin Oriental, Jardine Cycle &
Carriage and Astra. These companies are active in the fields of motor vehicles
and related operations, property investment and development, food retailing,
health & beauty, home furnishings, engineering and construction, transport
services, restaurants, luxury hotels, financial services, heavy equipment,
mining and agribusiness.

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.

 

 

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For further information, please contact:

Jardine Matheson Limited

Jonathan Lloyd
 
 (852) 2843 8223

Brunswick Group Limited

Sunitha Chalam
 
  (852) 3512 5050

This and other Group announcements can be accessed through the internet at
www.jardines.com.

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