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REG - Jardine Matheson Hdg - Interim Management Statement

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RNS Number : 1182M  Jardine Matheson Hldgs Ltd  19 May 2022

19th May 2022

For immediate release

Jardine Matheson Holdings Limited
Interim Management Statement

19th May 2022 - Jardine Matheson Holdings Limited (the 'Company') today
publishes its Interim Management Statement for the first quarter of 2022.

The Group saw a positive recovery in the performances of its businesses in the
first quarter compared with the same period last year, with Astra, Hongkong
Land, Jardine Cycle & Carriage and the Motors business all delivering
increases in profit.  Jardine Pacific saw a decline year-on-year and the
performances of DFI Retail and Mandarin Oriental were broadly flat, with these
businesses impacted by the resurgence of the pandemic in North Asia.
Overall, the Group's outlook continues to be uncertain, reflecting both the
challenges it faces - including COVID-19 restrictions in China - and the good
recovery opportunities for many of our businesses in Southeast Asia.  We are
grateful to our colleagues across the Group, who continue to respond with
professionalism, resilience and dedication to the challenges of the pandemic.

The performance of a number of Jardine Pacific's businesses was adversely
impacted by the resurgence of the pandemic in Hong Kong in the period,
although this was offset by operational improvements driving better underlying
performance in several businesses.  The contributions by Jardine Schindler
and JEC were broadly flat compared to the same period in 2021, while Gammon's
profitability was hit by reduced site activity and the performance of Jardine
Restaurants was severely impacted by pandemic restrictions in Hong Kong.
HACTL delivered a lower contribution as cargo volumes softened due to slower
export demand.  Zung Fu Hong Kong reported a loss for the period due to lower
deliveries and after-sales activities. Although Greatview's sales volumes
continued to grow steadily, margins were impacted by higher supply chain
costs.

The Group's United Kingdom Motors business performed well due to strong
margins on both new and used cars, but new car volumes remain low due to
supply constraints.  There was a higher contribution from Zhongsheng, in
respect of its performance from July to December 2021, reflecting a higher
gross margin in new car sales and strong growth in aftersales and the used car
business.

Hongkong Land saw an improvement in underlying profit in the period compared
to the first quarter of 2021, principally due to a greater number of
Development Properties completions on the Chinese mainland, while the
contribution from Investment Properties was broadly unchanged.

In Hong Kong, the increase in office leasing activity which was seen towards
the end of 2021 was reversed upon the onset of the fifth wave of the pandemic,
but there have been signs of a recovery in leasing activity since the partial
easing of anti-pandemic measures in late April. Retail sales were lower than
in the same period in 2021, as footfall was significantly impacted by a lack
of overseas tourists and social distancing measures, with the latter also
restricting the operating capacity of F&B outlets.  Hongkong Land is
providing temporary rent relief to support selected tenants in the first half
of 2022.

In Development Properties, market sentiment on the Chinese mainland for
residential properties remained cautious, and the recent emergence of COVID-19
cases and related lockdowns in certain regions partially curtailed sales and
development activities.  Hongkong Land's underlying profits for 2022 are
expected to be lower compared to the prior year, primarily due to the timing
of sales completions on the Chinese mainland.  In addition, the recent
emergence of COVID-19 cases and related restrictions in certain parts of the
Chinese mainland have partially curtailed some of the group's sales and
development activities.  It is too early to forecast with accuracy the impact
these restrictions may have on the group's full-year results, which will
depend on the degree to which mandatory restrictions remain in place for an
extended period and the extent to which construction progress on development
properties is impacted.

The performance of DFI Retail Group (DFI) was flat overall year-on-year. The
trading performance of both Grocery Retail and Health and Beauty in North Asia
benefitted in the quarter from panic buying of core grocery products and a
rush to buy COVID-19 protection items in response to the surge in COVID-19
cases in the region.  Heavy reductions in foot traffic, however, negatively
impacted Convenience performance.  In Southeast Asia, stronger year-on-year
performance in Health and Beauty broadly offset some softer performance in
Grocery Retail.

IKEA's profitability in the quarter was broadly in line with the prior year,
reflecting strong cost control, but the business continues to face challenges
from pandemic-related restrictions on the Chinese mainland and ongoing supply
chain constraints, which are likely to continue to impact trading performance.
The profitability of Maxim's, DFI's 50%-owned associate, was significantly
adversely impacted by government-imposed dining restrictions following the
surge in Omicron cases in Hong Kong.  Yonghui's underlying profitability
increased in the first quarter relative to the prior year, due to a
combination of improved sales revenue, higher gross margins and operating cost
control.  However, DFI's reported results for 2022 will, as normal, also
incorporate Yonghui's reported losses for quarter ended December 2021, which
will have an adverse impact on DFI's overall profitability.

It is too early to forecast with accuracy the impact for the rest of the year
of pandemic-related restrictions in Hong Kong and the Chinese mainland on
DFI's own banners and its associate business Maxim's; of continued competitive
and pandemic related challenges for Yonghui; and of supply-chain related
challenges in the home-furnishing business, but the full year reported results
of DFI are expected to be lower than in 2021.

Mandarin Oriental saw trading conditions in the quarter improve in most parts
of the world compared to the first quarter of 2021 and there was a reduction
in its underlying loss for the period.  Travel restrictions, however,
hampered operating performance in Asia, with properties in China being
particularly affected, and these challenges have continued into the second
quarter.  There was a more robust performance in EMEA and America.

The group's management business recorded a modest underlying profit for the
first quarter, while there was a small underlying loss by owned hotels.  The
outlook continues to improve in most markets, although there remains
uncertainty in China.

Jardine Cycle & Carriage ('JC&C') delivered an improved performance in
the first quarter of 2022, compared to the same period last year, mainly due
to higher contributions from Astra and Other Strategic Interests.  THACO
achieved higher automotive sales and margins, but Siam City Cement was
affected in particular by high energy costs.

JC&C's Direct Motor Interests delivered a relatively stable performance,
with improved profits from Tunas Ridean and Cycle & Carriage Bintang.
Cycle & Carriage in Singapore, however, recorded lower sales in
challenging trading conditions.

Astra reported a significant increase in earnings in the period, compared with
the first quarter of last year, driven primarily by the domestic economic
recovery in Indonesia and higher commodity prices.  Astra's automotive
division saw increased car sales as a result of luxury sales tax incentives,
and the financial services division recorded higher lending volumes. The heavy
equipment and mining division also saw a strong performance, with increased
heavy equipment sales and higher coal selling prices, while the performance of
Astra's agribusiness division benefitted from higher crude palm oil prices.

At the Jardine Matheson Holding's AGM on 5th May 2022, shareholders approved
the cancellation of 426,938,280 shares in the Company as part of a reduction
in capital (the 'Reduction') which constituted the final stage in the Group
simplification which started last March.  On 18th May 2022, the Company
announced that the Reduction had taken effect and that the Company's issued
share capital was now 289,435,103 shares.

Jardine Matheson is a diversified Asian-based business group with unsurpassed
experience in the region. Its interests include Jardine Pacific, Jardine
Motors, Hongkong Land, DFI Retail Group, 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
standard 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 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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