REG - Jardine Matheson Hdg - Interim Management Statement

Jardine Matheson HoldingsAnnouncement

10/11/2022 10:00

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RNS Number : 9948F  Jardine Matheson Hldgs Ltd  10 November 2022

10th November 2022

For immediate release

Jardine Matheson Holdings Limited
Interim Management Statement

10th November 2022 - Jardine Matheson Holdings Limited today publishes its
Interim Management Statement for the third quarter of 2022.

The performance of most of the Group's businesses continued to improve in the
third quarter, compared with the same period last year, particularly in
Southeast Asia, led by Astra.  The Group's businesses in Hong Kong and on the
Chinese mainland, however, continue to be impacted by pandemic restrictions.

Although the Group saw strong profit growth in the first half of the year, its
full year results will be affected by fewer planned sales completions and
reduced construction activity in Hongkong Land's Development Properties
business on the Chinese mainland, as well as moderating growth in Southeast
Asia (as a result of strong commodity prices in the second half of 2021).
The Group, however, remains resilient and well-positioned to achieve its
long-term growth objectives, with a strong balance sheet and liquidity
position.

Looking at the individual performances of the Group's businesses, Jardine
Pacific reported an improved overall performance in the third quarter, with
better underlying performance from a number of businesses, as well as
continuing benefit from Hong Kong government subsidies and other support.
Several businesses, however, remain impacted by the pandemic restrictions in
Hong Kong.

Jardine Pacific's engineering and construction businesses performed well, with
strong contributions from Jardine Schindler, Gammon and JEC.  The Restaurants
business delivered lower profitability, with challenging trading conditions in
Hong Kong and Taiwan.  Zung Fu Hong Kong and Macau reported a lower profit,
caused by rising operating costs.

Within Transport Services, Hactl's contribution decreased due to lower cargo
volumes and Jardine Aviation Services reported a higher loss as flight volumes
remained low.  Greatview's sales grew, but it saw lower margins.

The Group's United Kingdom Motors business saw its performance impacted by new
car supply shortages caused by ongoing supply chain constraints.
Zhongsheng's contribution, in respect of the period from January to June 2022,
was slightly lower than the equivalent period last year, reflecting lower new
car sales volumes and gross margins due to the impact of the pandemic on the
Chinese mainland in the second quarter, although the aftersales and used car
businesses remained resilient.

Hongkong Land's Central office portfolio continued to benefit from its unique
positioning, despite an increase in vacancies across the city in the period.
Vacancy decreased from 5.4% at the end of June 2022 to 5.1% at the end of
September 2022 and was materially lower than the overall Central Grade A
office market vacancy of 8.3%.

The group's retail portfolio in Hong Kong benefitted from marginally better
trading conditions in the third quarter of the year, due to a relaxation of
social distancing restrictions.  The improved trading conditions resulted in
a decline in temporary rent relief in the period, although the group continues
to provide support to its tenants on a case-by-case basis.  The overall
performance of the portfolio, however, continued to be negatively impacted by
a lack of overseas visitors. Physical and committed retail vacancy at 30th
September 2022 remained low at 1.4%.

In the Development Properties business, market sentiment in respect of
residential properties on the Chinese mainland remained weak, due to
pandemic-related restrictions and an uncertain economic outlook.  In the nine
months to 30th September 2022, the group's attributable interest in contracted
sales was US$765 million, compared to US$1,618 million in the same period last
year.

Hongkong Land's full-year underlying profits are expected to be significantly
lower than those of the prior year, primarily due to fewer planned sales
completions and the impact of pandemic-related restrictions on construction
activities on the Chinese mainland, which will result in some completions
being deferred from the second half of 2022 into 2023.

DFI's Health and Beauty, Convenience and IKEA businesses all benefitted from
stronger like-for-like sales growth in the third quarter compared to the first
half and delivered higher profits than in the equivalent period last year.
Grocery Retail, however, saw flat like-for-like sales in North Asia and weaker
like-for-like sales in Southeast Asia, and overall profitability was lower as
the business continued to be impacted by the higher cost of goods sold;
increasing operating costs (particularly in respect of electricity); and
e-commerce investment costs.

The group's Convenience business saw performance in Hong Kong, Macau and
Singapore improve as pandemic-related movement restrictions were relaxed or
removed.  In South China, however, sales and profits continued to be impacted
by pandemic restrictions and lockdowns.

DFI's Health and Beauty businesses reported a strong sales performance, which
led to a significant increase in underlying profitability in the third quarter
compared to the same period last year.

The Home Furnishing business saw increasing sales momentum, as government
restrictions eased and stock availability improved, and profitability also
benefitted from strong cost control.

Although DFI's financial performance improved in the third quarter compared to
the first half, pandemic restrictions and inflationary pressures continue to
have a significant adverse effect.  In addition, planned investments in
digital capacity will continue to impact short-term profitability.  The group
expects profits in the second half to significantly improve relative to the
first half but, nevertheless, to be below those in the comparable period last
year.  Accordingly, full year profits are expected to be materially lower
than in 2021.

The return of normal travel conditions in most of the world in early 2022 saw
Mandarin Oriental record net underlying profits in the second quarter, and
this progress continued in the third quarter.

In the group's Owned Hotels, improvements in occupancy and high rates resulted
in increased profitability in the third quarter compared to the second
quarter, particularly in Paris and Munich.  Two of the group's key
profit-generating hotels, in Hong Kong and Tokyo, however, remained subject to
stringent travel restrictions throughout the third quarter, which impacted
operating performance.  The hotels in Bangkok and Singapore continued their
recovery following the removal of travel barriers.

The Management Business recorded a significant improvement in profitability in
the third quarter compared to the second quarter, with particularly strong
contributions from a number of the group's Mediterranean and Middle Eastern
properties.

The group opened a hotel in Lucerne and a standalone residences project in
Barcelona during the quarter and announced a new hotel in Tianfu, Chengdu.
The sale of the Washington D.C., hotel was completed in the period.

Jardine Cycle & Carriage ('JC&C') performed well overall in the third
quarter, reflecting improvements across the portfolio.  Astra reported a 49%
increase in underlying earnings, excluding fair value gains from its equity
investments, with improvements across its major divisions, supported by the
domestic economic recovery and higher commodity prices.  Astra's automotive
division benefitted from higher car sales, which offset a decline in
motorcycle sales caused by temporary supply chain disruption due to a shortage
of semiconductor chips.  Its financial services division saw higher lending
volumes and lower loan loss provisions, while the heavy equipment and mining
division benefitted from higher coal prices, with increased equipment sales.
The agribusiness division saw higher crude palm oil prices, although these
were offset by lower production.

THACO's automotive performance for the year-to-date improved.  JC&C's
Direct Motor Interests saw higher contributions from Tunas Ridean in Indonesia
and Cycle & Carriage Bintang in Malaysia, partly offset by slightly lower
results from Cycle & Carriage in Singapore.

JC&C's Other Strategic Interests performed well in the first nine months
of the year, mainly due to REE's improved profits from its hydropower
investments.  Increased energy costs, however, adversely impacted Siam City
Cement's results.

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 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

Jonathan
Lloyd
(852) 2843 8223

Brunswick Group Limited

William
Brocklehurst
(852) 5685 9881

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

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