Company Announcements

RNS Number : 6051U
Jardine Matheson Hldgs Ltd
30 July 2020
 

To:    Business Editor                                                                   30th July 2020

For immediate release

 

The following announcement was issued today to a Regulatory Information Service approved by the Financial Conduct Authority in the United Kingdom.

 

Jardine Matheson Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2020

 

Challenging first half, strong balance sheet and solid mid-term prospects

 

Highlights

·    All businesses faced challenging market conditions

·    Underlying profit of US$373 million for the period to 30th June 2020, down 49% against prior year

·    Some signs of business recovery in second quarter, but the outlook remains uncertain

·    Group's balance sheet and funding position remain strong

·    Interim dividend declared of US¢44.00 per share, unchanged from the same period in 2019

 

"As expected, COVID-19 had a significant impact on the Group's results in the first half, with Southeast Asia particularly affected.  It is expected that the pandemic will continue to create uncertainty and volatility in the second half, making it difficult to predict full year performance. 

 

On behalf of the Board, I would like to thank all my colleagues across the Group for their continuing dedication, hard work and professionalism during such challenging times.

 

The Group has a strong balance sheet and liquidity position and will remain vigilant for value-adding opportunities should they arise, despite the uncertain near-term outlook."

 

Ben Keswick, Executive Chairman

 

Results

                                                                                             (unaudited)

Six months ended 30th June

 

 


2020

US$m

2019

US$m

Change

%

Gross revenue including 100% of associates and joint ventures

 

44,936

50,274

11

Revenue

15,906

20,172

21

Underlying profit* attributable to shareholders

373

738

49

(Loss)/profit attributable to shareholders

(775)

2,254

n/a

Shareholders' funds#

28,852

30,351

5


US$

US$

%

Underlying earnings per share*

1.01

1.96

48

(Loss)/earnings per share

(2.09)

5.99

n/a

Net asset value per share#

78.02

81.90

5

 

US¢

US¢

%

Interim dividend per share

44.00

44.00

* 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 2020 and 31st December 2019, respectively.  Net asset value per share is based on the book value of shareholders' funds.

The interim dividend of US¢44.00 per share will be payable on 14th October 2020 to shareholders on the register of members at the close of business on 21st August 2020 and will be available in cash with a scrip alternative.

 

Jardine Matheson Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2020

 

Chairman's Statement

Overview

 

The Group's performance and profitability in the first half were significantly impacted by COVID-19 and the restrictions imposed to contain it.  Greater China was mainly affected in the first quarter, while Southeast Asia felt the impact of the pandemic increasingly in the second quarter.

 

With the notable exception of Mandarin Oriental, the Group's major businesses remained profitable in the first half, although at materially lower levels than the same period last year.  While there were some signs of recovery in certain of the Group's businesses in the second quarter (including the Group's property development and motors businesses on the Chinese mainland), the possibility of further waves of the pandemic makes it difficult to predict performance in the second half. 

 

Jardines remains resilient and well-positioned to achieve its long-term growth objectives, reflecting the diversity of the Group's businesses, the strength of their underlying business models and the Group's clear strategic aims. 

 

The Group also remains focussed on addressing changes in customer behaviours, some of which may be permanent, and the need for each of its businesses to adapt and align to new situations resulting from COVID-19.  The pandemic has further accelerated change and disruption in our markets, and our people and businesses are aiming to respond with speed and agility.

 

The balance sheet and liquidity of the Group remain robust.  Across the Group, extensive actions continue to be taken to manage costs and preserve cash, including operational improvements to ensure the long-term resilience of the business.  The Group also has access to substantial undrawn liquidity from committed lending facilities. 

 

Results

 

The Group's underlying profit for the first six months of 2020 was US$373 million, US$365 million, or 49%, below the corresponding period last year, and underlying earnings per share were down 48% at US$1.01.  The revenue of the Group for the period was 21% lower at US$15.9 billion, while revenue, including 100% of associates and joint ventures, was down 11% at US$44.9 billion.

 

Within the Group's businesses, Jardine Pacific's performance was slightly down overall compared with the same period last year and it remains a resilient, cash-generative group of businesses.  HACTL performed strongly, while the contributions from JEC and Jardine Restaurants were solid.  Jardine Schindler and Gammon delivered weaker performances, and the contribution from Aviation Services was significantly lower due to the challenges facing the aviation sector.

 

Jardine Motors saw its results fall, with the UK business materially impacted by lockdown measures and a weaker performance from Zung Fu on the Chinese mainland and in Hong Kong in the first quarter.  There was, however, a higher contribution in the period from the investment in Zhongsheng, relating to its performance for the six months from July to December 2019.

 

Hongkong Land's office portfolio remained resilient in Hong Kong and Singapore, but the provision of rent relief to tenants negatively impacted Hong Kong retail profit.  Profit from Development Properties was lower in all the group's markets due to fewer scheduled completions in the period. 

 

Dairy Farm saw its overall profits fall significantly due to reduced contributions from Health & Beauty, Maxim's and Convenience Stores, all of which have been impacted by the severe decline in tourism and pandemic-related restrictions.  There were, however, strong performances from the group's Grocery Retail operations and Home Furnishings business.

 

Mandarin Oriental recorded a significant loss in the first half of the year, as the majority of the group's hotels were closed throughout the second quarter.

 

In Southeast Asia, Astra's performance was significantly weaker in the period, with lower contributions from automotive, financial services and heavy equipment and mining, and Jardine Cycle & Carriage ('JC&C') also saw reduced contributions from Thaco and its Motor businesses, which experienced declines in all markets due to the temporary closure of operations.

 

The Group recorded a non-trading net loss in the first half of US$1,148 million, compared with a non-trading net gain of US$1,516 million in the first half of 2019.  This was as a result of the biannual revaluations of investment properties in Hongkong Land - which produced a net revaluation loss of US$933 million as values were suppressed due to lower open market rents - and The Excelsior site, which led to a US$222 million revaluation loss.  In the first half of 2019, a US$2.0 billion gain was recognised in the asset revaluation reserves when the site was reclassified as a commercial investment property.  The Group recorded a loss attributable to shareholders for the period of US$775 million, compared with a profit of US$2,254 million in 2019. 

 

Financial Position


The balance sheet and liquidity of the Group remain strong.  Across the Group, extensive actions continue to be taken to manage costs, preserve cash and increase liquidity, including the reduction, suspension or deferral of non-essential operating and capital expenditure.

 

Shareholders' funds were US$28.9 billion at 30th June 2020, compared with US$30.4 billion at 31st December 2019.  Consolidated net debt excluding financial services companies was US$5.4 billion at 30th June 2020, representing gearing of 9%, compared with 7% at 31st December 2019.  The Group had liquidity of US$13.9 billion, consisting of US$7.6 billion in cash reserves and US$6.3 billion in unused, committed debt facilities.

 

Dividend

 

The Board has declared an interim dividend of US¢44.00 per share, in line with last year.  The Board will review the final dividend for the year at the end of the second half.

 

Business Developments

 

Planning of Hongkong Land's prime mixed-use site in the West Bund area of Shanghai is underway, with completion expected in multiple phases through to 2027.  Subject to relevant approvals by the authorities, the group has conditionally reached agreements with two strategic partners to jointly develop the site and received a prepayment of US$2.3 billion in the first half, with a further amount of US$320 million received in July.  The land premium and related costs of US$4.5 billion were paid in the first half.

 

Dairy Farm's multi-year programme to reshape and reorganise the business, adapting to the changing needs of customers, has never been more relevant and continued to progress during the first half of the year, despite the impact of the pandemic. 

 

This week's launch of Yuu, expected to become Hong Kong's largest loyalty programme, is an important milestone in Dairy Farm's drive to modernise its business and achieve a digital transformation of the group.  The Yuu programme will be a key enabler of Dairy Farm's objective of adopting a more customer-centric approach across all its banners and driving enhanced levels of consumer engagement.  The divestment of Wellcome Taiwan is expected to complete by the end of the year.

 

Mandarin Oriental signed one new management contract in the period, for a hotel and residences in Vienna, which are scheduled to open in 2023. 

 

In May 2020, Astra completed the sale of its 44.56% stake in Permata Bank for net consideration of US$1.1 billion.  The disposal, which followed the sale of the Group's interest in Jardine Lloyd Thompson in 2019, has further reduced our exposure to a high risk sector, realised a significant gain for the Group and helped ensure that the business remains well-capitalised at both the Astra and Jardine Matheson levels.

 

People

 

Ensuring the safety and wellbeing of employees during the pandemic is a top priority and the Group's businesses have adopted a range of appropriate health and safety measures. 

 

Support from governments in a number of our key markets has helped maintain employment.

We would like to thank all our colleagues for their continuing dedication, hard work and professionalism during this challenging time.

 

As planned and announced earlier in the year, I stepped down as Group Managing Director on 15th June 2020 and was succeeded by John Witt, formerly Group Finance Director.  Graham Baker joined the Board and was appointed as Group Finance Director with effect from 15th June 2020.  I will continue as Group Chairman and look forward to working with John, Graham and the wider leadership team in the coming years. 

 

Outlook

 

The pandemic continues to create uncertainty and volatility and trading conditions in the second half are expected to continue to be challenging.  While there were some signs of recovery in certain of the Group's businesses in the second quarter, the possibility of further waves of the pandemic make it difficult to predict performance in the second half.

 

The Group is focussed both on driving operational performance across its businesses and on identifying and taking the potential opportunities which are emerging from the pandemic to drive future growth.  The Group's strong balance sheet, long-term perspective and liquidity will position it well to take advantage of these opportunities as they arise.

 

 

 

Ben Keswick

Executive Chairman

 

 

Operating Review

 

Jardine Pacific

 

Jardine Pacific reported an underlying net profit of US$53 million in the first half, compared with US$56 million in the equivalent period in 2019.  The group remains resilient and cash-generative.  HACTL performed strongly and saw cargo throughput maintained, and JEC had a solid start to the year, with improved performances both in Hong Kong and regionally.  Jardine Restaurants saw mixed results across its banners, with strong delivery sales for Pizza Hut in Hong Kong and Taiwan - thanks to a quick pivot towards this by management - but weaker performances in its other banners due to the impact of the pandemic.  Gammon's contribution was lower, with slower progress on several projects, while Jardine Schindler also saw a number of projects in Southeast Asia delayed, leading to a reduced contribution in the period.  Jardine Aviation Services delivered significantly lower results due to the substantial fall in flight volumes, which is expected to continue in the second half.

 

Jardine Motors

 

Jardine Motors saw its underlying net profit for the first half fall by 43% to US$61 million.  Zung Fu on the Chinese mainland experienced a challenging first quarter, as factories and showrooms closed due to the pandemic, the supply chain was disrupted and there were lower margins from aftersales services.  The second quarter saw some recovery in demand, but it is difficult to predict future performance given the uncertainty over the future impact of the pandemic.  Zung Fu in Hong Kong also saw poor margins in the period due to weaker consumer sentiment.  The United Kingdom business was materially impacted by lockdown measures and made a loss in the first half.  Conditions in the UK market are expected to remain challenging in the second half.

 

There was a higher contribution from the investment in Zhongsheng, relating to its performance for the six months from July to December 2019. 

 

Hongkong Land

 

Hongkong Land's underlying profit attributable to shareholders for the first six months was US$353 million, down 24% from the equivalent period in 2019There was a loss attributable to shareholders of US$1,828 million after accounting for a net non-cash loss of US$2,180 million arising on the biannual revaluation of investment properties, due to lower open market rents.  This compares with a profit attributable to shareholders of US$411 million in the first half of 2019, which included a net revaluation loss of US$55 million.  The group's financial position remains robust, with a strong balance sheet and liquidity.

 

The group's office portfolio in Hong Kong remained resilient, despite subdued leasing activity, with vacancy at 5% at the end of June 2020 (4.5% on a committed basis), compared to 2.9% at the end of 2019.  The Central retail portfolio was negatively impacted in the first half by deteriorating consumer sentiment and various measures introduced in Hong Kong to contain the pandemic.  Vacancy of 0.4% on both a physical and committed basis was virtually unchanged compared to 0.3% at the end of 2019. 

 

In Singapore, rental reversions remained positive in the group's office portfolio in the first half and vacancy was 1.5% at the end of June 2020 (1% on a committed basis), compared with 5% at the end of 2019. 

 

In Shanghai, planning of Hongkong Land's prime mixed-use site along the Huangpu River in the Xuhui District is underway, with completion expected in multiple phases through to 2027.  The project will substantially expand Hongkong Land's portfolio and provide it with a significant presence in the predominant commercial hub of the Chinese mainland, complementing its large-scale presence in the other key Asian financial centres of Hong Kong and Singapore.

 

Since securing the site and subject to relevant approvals by the authorities, the group has conditionally reached agreements with two strategic partners to jointly develop the site, receiving a prepayment of US$2.3 billion in the first half with a further amount of US$320 million received in July.  The land premium and related costs of US$4.5 billion were paid in the first half.  The project will be funded by a combination of internal resources and external funding.

 

On the Chinese mainland, as anticipated the profit contribution from Development Properties in the first half of 2020 decreased compared to the first half of 2019 due to fewer sales completions.  Market sentiment in the group's core markets started to recover in the second quarter, following the temporary closure of all sales galleries and the suspension of construction activities for some two months in the first quarter as a result of the impact of the pandemic.  At 30th June 2020, the Group had US$2,183 million in sold but unrecognised contracted sales, compared with US$1,860 million at the end of 2019. 

 

The profit contribution from the Singapore business in the first half of 2020 was lower than in the first half of 2019, as sales galleries and construction activities there were also suspended as a result of the pandemic.  The 309-unit Margaret Ville development is 92% pre-sold, whilst pre-sales at the 1,404-unit Parc Esta and the 638-unit Leedon Green projects have performed well under current market conditions.  The group's attributable interest in contracted sales was US$301 million in the first half of 2020, compared to US$255 million and US$414 million in the first and second halves of 2019, respectively.

 

In the rest of Southeast Asia, construction activities at the group's projects have largely been suspended or curtailed since April and market sentiment remains subdued.

 

Dairy Farm

 

Dairy Farm saw sales of US$5.2 billion for the period by its subsidiaries, 9% lower than the prior year.  Underlying profit was US$105 million, 40% lower than the same period last year.

 

In Health and Beauty, performance in North Asia was materially affected by a continuing lack of overseas tourist customers in Hong Kong, despite the business initially seeing strong demand for personal protection equipment.  The Southeast Asia business performed well in the first quarter but was then impacted as social distancing requirements began to take effect towards the end of the first quarter.

 

The Convenience Stores business was impacted in the period by movement restrictions and physical distancing requirements, as well as temporary store closures on the Chinese mainland and reduced customer numbers in Hong Kong and Singapore.  Performance improved over the course of the first half in Hong Kong and on the Chinese mainland in particular, as various lockdown restrictions eased, but it is difficult to predict performance for the rest of the year given uncertainty over the future impact of the pandemic.  Recovery in Singapore has lagged behind that in North Asia.

 

Maxim's, the group's 50%-owned associate, saw a significant reduction in customer numbers and a number of temporary store closures, and reported a loss for the first half.  The performance of the business improved over the course of the second quarter, as pandemic-related restrictions eased, but any return of restrictions which reduce customer levels or require further temporary closures of its outlets will impact future performance. 

 

The Grocery Retail business saw improved profits.  The strong performance was underpinned by the ongoing execution of the group's transformation plan and improvement programmes, as well as changing customer behaviours as a result of the pandemic.  The strong turnaround momentum continued in Singapore and Malaysia as the execution of improvement programmes and the group's space optimisation plan both made a positive contribution, and there were encouraging performances from new upscale formats and refreshed stores.  Market conditions in Indonesia remained challenging.  The divestment of Wellcome Taiwan is expected to complete by the end of the year.

 

There was also a good performance from Home Furnishings, which saw strong contributions from new stores, enhancements in the margin mix and lower cost of goods in the period outweigh the impact on customer visits of pandemic-related restrictions, including temporary store closures. 

 

Mandarin Oriental

 

Mandarin Oriental recorded a significant underlying loss of US$102 million for the first half of the year, compared with a profit of US$11 million in the equivalent period in 2019, despite implementing a number of cost containment measures.  In Europe and America, all of the group's hotels were closed from late March onwards.  Hotels in Asia and the Middle East mostly remained open during the first half but operated at very low occupancy levels once anti-pandemic restrictions and border controls were imposed.  Combined total revenue of hotels under management fell by 57% in the first half compared to the equivalent period last year, with the majority of this decline occurring in the second quarter, which saw an 86% decline against the prior year. 

 

The group's flagship Hong Kong hotel remained open, but with single-digit percentage occupancy levels for most of the second quarter, and it made a loss during the first half.  It did, however, benefit from a partial recovery in food and beverage business when government anti-pandemic measures were relaxed. 

 

The group's hotels on the Chinese mainland saw a recovery in occupancy levels in June to around 40%, and elsewhere a number of the group's hotels have begun to reopen in anticipation of some demand but, in many cases, this demand is expected to remain low and not in line with normal market conditions.  Overall a material recovery in business levels is not expected until 2021 at the earliest and a significant further loss is likely in the second half of the year.

 

Jardine Cycle & Carriage

 

Jardine Cycle & Carriage reported an underlying profit for the period of US$138 million, 66% lower than the equivalent period last year.  Profit attributable to shareholders fell by 30% to US$301 million.  The pandemic is expected to continue to adversely impact performance for the rest of the year.

 

Astra's contribution to underlying profit fell by 47% to US$171 million.  There were significantly weaker performances from its automotive, financial services and heavy equipment and mining operations.

 

The contribution from JC&C's Direct Motor Interests and Thaco fell materially as automotive operations were forced to close during the second quarter due to lockdown restrictions. 

 

Thaco saw sales and margins impacted as a result of the difficult market conditions.  The contribution by Cycle & Carriage Singapore was 95% lower than the same period last year, as the business was impacted by a material reduction in the overall passenger car market in Singapore and its market share also fell.  Tunas Ridean's contribution was 70% lower due to weaker performances across its automotive, consumer finance and rental operations.  In Malaysia, Cycle & Carriage Bintang reported a higher loss than in the same period last year, as sales and margins both fell.  Market conditions are expected to remain difficult for the remainder of the year.

 

There was a 5% lower contribution from Siam City Cement in Thailand, reflecting weaker domestic performance, which was partially offset by an improved contribution from its regional operations, primarily in Vietnam.  The contribution from Refrigeration Electrical Engineering Corporation in Vietnam was also lower, with weaker performances from its power and water investments and its M&E business, partially offset by stronger real estate contributions.

 

Vinamilk produced dividend income of US$12 million in the period, compared to US$28 million in the same period last year, which included the 2019 interim dividend.  Vinamilk's 2020 interim dividend will be recognised later in the year.  The business reported a slightly higher profit in the first half, in local currency terms, as domestic dairy and exports continued to grow.

 

Astra

 

Excluding the gain on the disposal of its investment in Permata Bank, Astra reported net profit equivalent to US$372 million, under Indonesian accounting standards, 44% lower in its reporting currency.  This was mainly due to significantly lower contributions from its automotive, financial services and heavy equipment and mining businesses, partially offset by its agribusiness. 

 

The pandemic containment measures implemented across Indonesia caused severe disruption to Astra's operations, including the temporary closure of its automotive manufacturing and distribution operations.  There was also a significant rise in the number of restructured loans in its financial services businesses, in response to government operating requirements.  In addition, depressed coal prices led to a deterioration in Astra's heavy equipment, mining contracting and mining businesses.

 

Net income from Astra's automotive business fell by 79% to US$48 million, mainly due to a substantial fall in sales volumes, especially in the second quarter.  The overall wholesale car market declined by 46% in the first half and Astra's car sales were 45% lower, although it maintained its market share.  The wholesale motorcycle market declined by 42% in the period.  Astra's Honda motorcycle sales fell by 40%, but its market share increased from 75% to 77%.  Components business Astra Otoparts reported a net loss of US$20 million, compared with a profit of US$17 million in the same period last year, mainly due to lower revenues from the original equipment manufacturer and replacement market segments.  Market conditions are expected to remain difficult for the remainder of the year.

 

Net income from Astra's financial services division fell by 25% to US$142 million, primarily due to increased loan loss provisions to cover higher non-performing loan losses in the consumer and heavy equipment-focused finance businesses.  Consumer finance businesses saw a 16%, decrease in the amounts financed and the net income contribution from the car-focused finance companies decreased by 24%, while the contribution from the motorcycle-focused financing business fell by 25%.  In both cases this was caused by higher loan loss provisioning, as non-performing loans increased.  Heavy equipment-focused finance operations saw a 14% decrease in the amounts financed.  General insurance company Asuransi Astra Buana reported a 4% decrease in net income to US$35 million, caused by lower underwriting income. 

 

In May 2020, Astra completed its sale of its 44.56% stake in Permata Bank for a net consideration of US$1.1 billion. 

 

Net income from Astra's Heavy Equipment, Mining, Construction and Energy division decreased by 29% to US$160 million, mainly due to lower heavy equipment sales and mining contracting volume caused by weaker coal prices.  Market conditions are expected to remain challenging for the rest of the year.  United Tractors reported a 28% decrease in net income, while Komatsu heavy equipment sales fell by 56%, and parts and service revenues were also lower.  Mining contracting operations reported lower overburden removal volume and lower coal production.  Coal mining subsidiaries achieved higher coal sales but were affected by lower coal prices.  Agincourt Resources saw 4% lower gold sales.  General contractor Acset Indonusa, however, reported a 38% lower net loss of US$17 million, mainly due to reduced funding costs.

 

Astra's infrastructure and logistics division reported a net loss of US$6 million for the first half, compared to a net profit of US$6 million for the same period in 2019, mainly due to lower toll road revenues caused by lower traffic volumes.  Serasi Autoraya's net income decreased by 62% to US$2 million, primarily as a result of lower operating margins, despite a 3% increase in vehicles under leasing contract and higher used car sales.

 

Net income from Astra's Agribusiness division increased significantly to US$21 million, due to higher crude palm oil prices, especially in the first quarter.

 

Net income from Astra's information technology division was 64% lower, primarily due to lower revenues in Astra Graphia's document solution and office service businesses.

 

The group's property division saw net income increase, mainly due to higher occupancy at Menara Astra and earnings recognised from its development project, Asya Residences.

 


 

           






































Jardine Matheson Holdings Limited

Consolidated Profit and Loss Account


























































































































(unaudited)


























Six months ended 30th June




Year ended 31st December










2020












2019












2019




















































































Underlying

business

performance

US$m

 

Non-trading

items

US$m

 

 



 

 

Total

US$m


Underlying

business

performance

US$m



 

Non-trading

items

US$m




 

 

Total

US$m


Underlying

business

performance

US$m



 

Non-trading

items

US$m




 

 

Total

US$m



 













































 

 
































Revenue (note 2)


15,906




-




15,906




20,172




-




20,172




40,922




-




40,922




Net operating costs (note 3)


(14,736)




333




(14,403)




(18,319)




1,556




(16,763)




(36,931)




1,576




(35,355)




Change in fair value of investment properties


-




(2,397)




(2,397)




-




(57)




(57)




-




(832)




(832)




 

 






































Operating profit


1,170




(2,064)




(894)




1,853




1,499




3,352




3,991




744




4,735




Net financing charges












































































- financing charges


(343)




-




(343)




(395)




-




(395)




(787)




-




(787)




- financing income


117




-




117




117




-




117




253




-




253


















































































(226)




-




(226)




(278)




-




(278)




(534)




-




(534)




Share of results of associates and joint ventures (note 4)












































































- before change in fair value of investment properties


225




(57)




168




544




2




546




1,221




20




1,241




- change in fair value of investment properties


-




(135)




(135)




-




(10)




(10)




-




(11)




(11)


















































































225




(192)




33




544




(8)




536




1,221




9




1,230










































Profit/(loss) before tax


1,169




(2,256)




(1,087)




2,119




1,491




3,610




4,678




753




5,431




Tax (note 5)


(239)




11




(228)




(391)




(1)




(392)




(941)




(16)




(957)










































Profit/(loss) after tax


930




(2,245)




(1,315)




1,728




1,490




3,218




3,737




737




4,474










































Attributable to:






































Shareholders of the Company

    (notes 6 & 7)


373




(1,148)




(775)




738




1,516




2,254




1,589




1,249




2,838




Non-controlling interests


557




(1,097)




(540)




990




(26)




964




2,148




(512)




1,636












































930




(2,245)




(1,315)




1,728




1,490




3,218




3,737




737




4,474












































US$








US$




US$








US$




US$








US$
















































































Earnings/(loss) per share (note 6)






































- basic


1.01








(2.09)




1.96








5.99




4.23








7.56




- diluted


1.01








(2.09)




1.96








5.99




4.23








7.56





























































Jardine Matheson Holdings Limited

Consolidated Statement of Comprehensive Income





















































(unaudited)

Six months ended

30th June




Year ended

31st

December






2020

US$m






2019

US$m






2019

US$m







































(Loss)/profit for the period



(1,315)






3,218






4,474



Other comprehensive (expense)/income






















































Items that will not be reclassified to profit or loss:




































Remeasurements of defined benefit plans



(1)






(1)






6



Net revaluation surplus before transfer to investment properties


















- right-of-use assets



-






2,943






2,943



Tax on items that will not be reclassified



(1)






1






2










































(2)






2,943






2,951



Share of other comprehensive expense of associates and joint ventures



(3)






-






(5)
























(5)






2,943






2,946



Items that may be reclassified subsequently to profit or loss:




































Net exchange translation differences




































- net (loss)/gain arising during the period



(128)






257






489



- transfer to profit and loss



6






55






58










































(122)






312






547



Revaluation of other investments at fair value


















   through other comprehensive income




































- net (loss)/gain arising during the period



(3)






14






20



- transfer to profit and loss



(3)






-






(1)










































(6)






14






19



Cash flow hedges




































- net loss arising during the period



(60)






(52)






(92)



- transfer to profit and loss



4






(4)






(5)










































(56)






(56)






(97)



Tax relating to items that may be reclassified



2






18






29



Share of other comprehensive (expense)/income of associates and joint ventures



(401)






202






282
























(583)






490






780







































Other comprehensive (expense)/income for the period, net of tax



(588)






3,433






3,726





















Total comprehensive (expense)/income for the period



(1,903)






6,651






8,200





















Attributable to:


















Shareholders of the Company



(997)






4,480






5,201



Non-controlling interests



(906)






2,171






2,999
























(1,903)






6,651






8,200





















 













Jardine Matheson Holdings Limited

Consolidated Balance Sheet







































(unaudited)

At 30th June



At 31st

December




2020

US$m




2019

US$m

 

 



2019

US$m


























Assets












Intangible assets


2,785




2,788




2,849


Tangible assets


6,988




7,251




7,379


Right-of-use assets


5,036




5,203




5,129


Investment properties


39,707




38,038




37,377


Bearer plants


483




499




503


Associates and joint ventures


14,119




15,138




15,640


Other investments


2,582




2,800




2,720


Non-current debtors


3,326




3,156




3,045


Deferred tax assets


445




427




457


Pension assets


2




6




3














Non-current assets


75,473




75,306




75,102














Properties for sale


2,358




2,424




2,441


Stocks and work in progress


3,277




3,749




3,824


Current debtors


6,769




8,240




8,196


Current investments


40




37




29


Current tax assets


174




211




253


Bank balances and other liquid funds
























- non-financial services companies


7,326




6,255




6,927


- financial services companies


241




241




256




























7,567




6,496




7,183














Current assets


20,185




21,157




21,926










































































































































































Total assets


95,658




96,463




97,028






































Equity












Share capital


183




184




183


Share premium and capital reserves


32




68




32


Revenue and other reserves


33,919




35,102




35,418


Own shares held


(5,282)




(5,282)




(5,282)














Shareholders' funds


28,852




30,072




30,351


Non-controlling interests


33,433




34,118




34,720














Total equity


62,285




64,190




65,071














Liabilities












Long-term borrowings
























- non-financial services companies


8,721




7,074




6,976


- financial services companies


1,426




1,803




1,697




























10,147




8,877




8,673


Non-current lease liabilities


3,167




3,390




3,260


Deferred tax liabilities


728




717




789


Pension liabilities


471




436




462


Non-current creditors


407




351




356


Non-current provisions


306




293




314














Non-current liabilities


15,226




14,064




13,854














Current creditors


10,586




10,411




9,893


Current borrowings
























- non-financial services companies


4,051




4,452




4,737


- financial services companies


2,049




1,820




1,853




























6,100




6,272




6,590


Current lease liabilities


927




943




902


Current tax liabilities


358




387




540


Current provisions


176




196




178














Current liabilities


18,147




18,209




18,103


























Total liabilities


33,373




32,273




31,957


























Total equity and liabilities


95,658




96,463




97,028

















































Jardine Matheson Holdings Limited

Consolidated Statement of Changes in Equity



































































Share

capital

US$m


Share

premium

US$m


Capital

reserves

US$m


Revenue

reserves

US$m

Asset

revaluation

reserves

US$m


Hedging

reserves

US$m


Exchange

reserves

US$m


Own

shares

held

US$m

Attributable to shareholders of the Company

US$m

Attributable

to non-controlling interests

US$m


Total

equity

US$m













































Six months ended 30th June 2020 (unaudited)






















At 1st January 2020

183


-


32


34,903


2,167


(22)


(1,630)


(5,282)


30,351


34,720


65,071

Total comprehensive expense

-


-


-


(779)


-


(48)


(170)


-


(997)


(906)


(1,903)

Dividends paid by the Company (note 8)

-


-


-


(474)


-


-


-


-


(474)


83


(391)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(439)


(439)

Employee share option schemes

-


-


1


-


-


-


-


-


1


-


1

Scrip issued in lieu of dividends

1


(1)


-


97


-


-


-


-


97


-


97

Repurchase of shares

(1)


-


-


(126)


-


-


-


-


(127)


-


(127)

Subsidiaries disposed of

-


-


-


-


-


-


-


-


-


(14)


(14)

Capital contribution from non-controlling interests

-


-


-


-


-


-


-


-


-


1


1

Change in interests in subsidiaries

-


-


-


8


-


-


-


-


8


(8)


-

Change in interests in associates and joint ventures

-


-


-


(7)


-


-


-


-


(7)


(4)


(11)

Transfer

-


1


(1)


-


-


-


-


-


-


-


-























At 30th June 2020

183


-


32


33,622


2,167


(70)


(1,800)


(5,282)


28,852


33,433


62,285























Six months ended 30th June 2019 (unaudited)






















At 1st January 2019

184


36


182


32,739


213


(20)


(2,020)


(5,245)


26,069


32,729


58,798

Total comprehensive income

-


-


-


2,250


1,954


(4)


280


-


4,480


2,171


6,651

Dividends paid by the Company (note 8)

-


-


-


(481)


-


-


-


-


(481)


84


(397)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(695)


(695)

Employee share option schemes

-


-


3


-


-


-


-


-


3


-


3

Scrip issued in lieu of dividends

-


-


-


97


-


-


-


-


97


-


97

Increase in own shares held

-


-


-


-


-


-


-


(37)


(37)


37


-

Capital contribution from non-controlling interests

-


-


-


-


-


-


-


-


-


15


15

Change in interests in subsidiaries

-


-


-


(45)


-


-


-


-


(45)


(216)


(261)

Change in interests in associates and joint ventures

-


-


-


(14)


-


-


-


-


(14)


(7)


(21)

Transfer

-


-


(153)


153


-


-


-


-


-


-


-























At 30th June 2019

184


36


32


34,699


2,167


(24)


(1,740)


(5,282)


30,072


34,118


64,190



Year ended 31st December 2019






















At 1st January 2019

184


36


182


32,739


213


(20)


(2,020)


(5,245)


26,069


32,729


58,798

Total comprehensive income

-


-


-


2,859


1,954


(2)


390


-


5,201


2,999


8,200

Dividends paid by the Company

-


-


-


(646)


-


-


-


-


(646)


113


(533)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(964)


(964)

Unclaimed dividends forfeited

-


-


-


1


-


-


-


-


1


-


1

Issue of shares

-


3


-


-


-


-


-


-


3


-


3

Employee share option schemes

-


-


4


-


-


-


-


-


4


-


4

Scrip issued in lieu of dividends

1


(1)


-


133


-


-


-


-


133


-


133

Repurchase of shares

(2)


(40)


-


(286)


-


-


-


-


(328)


-


(328)

Increase in own shares held

-


-


-


-


-


-


-


(37)


(37)


37


-

Subsidiaries acquired

-


-


-


-


-


-


-


-


-


14


14

Capital contribution from non-controlling interests

-


-


-


-


-


-


-


-


-


18


18

Change in interests in subsidiaries

-


-


-


(50)


-


-


-


-


(50)


(227)


(277)

Change in interests in associates and joint ventures

-


-


-


1


-


-


-


-


1


1


2

Transfer

-


2


(154)


152


-


-


-


-


-


-


-























At 31st December 2019

183


-


32


34,903


2,167


(22)


(1,630)


(5,282)


30,351


34,720


65,071

 

 

 

 












Jardine Matheson Holdings Limited

Consolidated Cash Flow Statement






































(unaudited)

Six months ended

30th June



Year ended 31st December




2020

US$m

 

 



2019

US$m




2019

US$m























Operating activities





















Cash generated from operations


2,624




2,411




5,269


Interest received


103




90




186


Interest and other financing charges paid


(359)




(390)




(759)


Tax paid


(503)




(547)




(964)













1,865




1,564




3,732


Dividends from associates and joint ventures


131




384




1,133























Cash flows from operating activities


1,996




1,948




4,865














Investing activities





















Purchase of subsidiaries


(21)




-




(28)


Purchase of associates and joint ventures (note 10(a))


(151)




(639)




(1,088)


Purchase of other investments (note 10(b))


(220)




(279)




(409)


Purchase of intangible assets


(64)




(124)




(224)


Purchase of tangible assets


(338)




(648)




(1,234)


Additions to right-of-use assets


(23)




(51)




(60)


Additions to investment properties (note 10(c))


(4,562)




(73)




(171)


Additions to bearer plants


(16)




(21)




(44)


Advance to and repayment to associates and joint ventures (note 10(d))


 

(139)




 

(410)




(1,025)


Advance from and repayment from associates and joint ventures (note 10(e))


340




321




920


Advance received on conditional sale of a subsidiary in Hongkong Land (note 10(c))


2,252




-




-


Sale of subsidiaries


48




-




60


Sale of Jardine Lloyd Thompson (note 7)


-




2,084




2,084


Sale of other associates and joint ventures (note 10(f))


1,138




3




3


Sale of other investments (note 10(g))


188




204




450


Sale of intangible assets


1




-




-


Sale of tangible assets


29




9




63


Sale of right-of-use assets


-




1




3


Sale of investment properties


11




-




-























Cash flows from investing activities


(1,527)




377




(700)














Financing activities





















Issue of shares


-




-




3


Capital contribution from non-controlling interests


1




15




18


Change in interests in subsidiaries (note 10(h))


-




(246)




(277)


Purchase of own shares


(127)




-




(328)


Drawdown of borrowings


4,729




5,093




8,593


Repayment of borrowings


(3,581)




(4,227)




(7,669)


Principal elements of lease payments


(498)




(502)




(1,016)


Dividends paid by the Company


(294)




(300)




(400)


Dividends paid to non-controlling interests


(289)




(692)




(964)























Cash flows from financing activities


(59)




(859)




(2,040)











Net increase in cash and cash equivalents


410




1,466




2,125


Cash and cash equivalents at beginning of period


7,157




4,953




4,953


Effect of exchange rate changes


(33)




58




79











Cash and cash equivalents at end of period


7,534




6,477




7,157














 













Jardine Matheson Holdings Limited

Analysis of Profit Contribution






































(unaudited)

Six months ended

30th June



Year ended 31st December




2020

US$m




2019

US$m

 

 



2019

US$m


























Reportable segments












Jardine Pacific


53




56




164


Jardine Motors


61




107




196


Hongkong Land


151




198




460


Dairy Farm


69




115




210


Mandarin Oriental


(67)




7




27


Jardine Cycle & Carriage


1




45




84


Astra


109




207




455
















377




735




1,596


Corporate and other interests


(4)




3




(7)














Underlying profit attributable to shareholders*


373




738




1,589


Decrease in fair value of investment

   properties


(1,155)




(23)




(337)


Sale of Jardine Lloyd Thompson (note 7)


-




1,507




1,507


Other non-trading items


7




32




79














(Loss)/profit attributable to shareholders


(775)




2,254




2,838














Analysis of Jardine Pacific's contribution












Jardine Schindler


14




21




48


JEC


12




9




41


Gammon


3




8




36


Jardine Restaurants


15




10




13


Transport Services


5




8




18


JTH


3




1




7


Corporate and other interests


1




(1)




1
















53




56




164














Analysis of Jardine Motors' contribution












Hong Kong and Chinese mainland


89




103




196


United Kingdom


(28)




5




1


Corporate


-




(1)




(1)
















61




107




196


 

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.

 

The Group had early adopted the 'Interest Rate Benchmark Reform:  Amendments to IFRS 9, IAS 39 and IFRS 7' (effective 1st January 2020) for the Group's annual reporting period commencing 1st January 2019.

 

There are no changes to the accounting policies as described in the 2019 annual financial statements other than the following changes in relation to rent concessions and government grants.  Other amendments which are effective in 2020 and relevant to the Group's operations, do not have a significant effect on the Group's accounting policies.  The Group has not early adopted any other standard or amendments that have been issued but not yet effective.

 

COVID-19 Related Rent Concessions: Amendment to IFRS 16 Leases

 

The Group has early adopted the Amendment, which is effective 1st June 2020, for the Group's annual reporting period commencing 1st January 2020.  Where the Group is a lessee, the practical expedient is applied to account for the change in lease payments resulting from rent concessions granted as a direct consequence of the COVID-19 pandemic and elects not to assess these concessions as lease modifications when all of the following conditions are met:

 

(i)    the revised lease payments are substantially the same as, or less than, the consideration for the lease immediately preceding the change;

 

(ii)   reduction in lease payments relates to payment due on or before 30th June 2021; and

 

(iii)   there is no substantive change to the other terms and conditions of the lease.

 

Rent concessions fulfilling the above conditions are recognised in the profit and loss over the period in which they cover.

 

Government grants

 

Grants from government are recognised at their fair values where there is reasonable assurance that the grants will be received, and the Group will comply with the conditions associated with the grants.

 

Grants that compensate the Group for expenses incurred are recognised in the profit and loss as other income on a systematic basis in the period in which the expenses are recognised.  Unconditional grants are recognised in the profit and loss as other income when they become receivable.

 

Grants related to assets are deducted in arriving at the carrying value of the related assets.

 


2.    Revenue

 












Jardine








Jardine


Jardine


Hongkong


Dairy


Mandarin


Cycle &




Intersegment




Pacific


Motors


Land


Farm


Oriental


Carriage


Astra


transactions


Group


US$m


US$m


US$m


US$m


US$m


US$m


US$m


US$m


US$m



















Six months ended 30th June 2020


















By product and service:




































Property

2


-


820


-


-


-


37


(5)


854

Motor vehicles

-


2,127


-


-


-


514


2,169


(6)


4,804

Retail and restaurants

401


-


-


5,240


-


-


-


-


5,641

Financial services

-


-


-


-


-


-


716


-


716

   Engineering, heavy equipment, mining, construction and energy

 

270


 

-


 

-


 

-


 

-


 

-


 

2,245


 

(20)


 

2,495

Hotels

-


-


-


-


96


-


-


-


96

Other

387


-


-


-


-


-


913


-


1,300




















1,060


2,127


820


5,240


96


514


6,080


(31)


15,906



















Revenue from contracts with customers:




































Recognised at a point in time

822


2,126


102


5,240


38


487


5,147


(6)


13,956

Recognised over time

236


1


184


-


50


27


123


(20)


601






































1,058


2,127


286


5,240


88


514


5,270


(26)


14,557

Revenue from other sources:




































   Rental income from investment properties

 

2


 

-


 

466


 

-


 

-


 

-


 

5


 

(5)


 

468

   Revenue from financial services companies

 

-


 

-


 

-


 

-


 

-


 

-


 

713


 

-


 

713

Other

-


-


68


-


8


-


92


-


168






















-
















2


-


534


-


8


-


810


(5)


1,349




















1,060


2,127


820


5,240


96


514


6,080


(31)


15,906



















Six months ended 30th June 2019


















By product and service:




































Property

2


-


804


-


-


-


21


(5)


822

Motor vehicles

-


2,942


-


-


-


966


3,503


-


7,411

Retail and restaurants

363


-


-


5,761


-


-


-


-


6,124

Financial services

-


-


-


-


-


-


710


-


710

   Engineering, heavy equipment, mining, construction and energy

 

250


 

-


 

-


 

-


 

-


 

-


 

3,026


 

(14)


 

3,262

Hotels

-


-


-


-


279


-


-


-


279

Other

639


-


-


-


-


-


931


(6)


1,564




















1,254


2,942


804


5,761


279


966


8,191


(25)


20,172



















  Revenue from contracts with customers:




































Recognised at a point in time

957


2,942


34


5,761


104


934


7,190


(3)


17,919

Recognised over time

295


-


185


-


165


32


189


(17)


849






































1,252


2,942


219


5,761


269


966


7,379


(20)


18,768

Revenue from other sources:




































   Rental income from investment properties

 

2


 

-


 

509


 

-


 

-


 

-


 

3


 

(5)


 

509

  Revenue from financial services companies

 

-


 

-


 

-


 

-


 

-


 

-


 

710


 

-


 

710

Other

-


-


76


-


10


-


99


-


185






































2


-


585


-


10


-


812


(5)


1,404




















1,254


2,942


804


5,761


279


966


8,191


(25)


20,172

 

There was no interest income calculated using effective interest method included in revenue from contracts with customers for the six months ended 30th June 2020 and 2019.

 

Gross revenue, comprises revenue together with 100% of revenue from associates and joint ventures, are analysed as follows:

 


Six months ended 30th June














2020

US$m




2019

US$m





















By business:









Jardine Pacific


3,032




3,095



Jardine Motors


11,777




11,741



Hongkong Land


1,443




1,771



Dairy Farm


14,547




13,782



Mandarin Oriental


167




449



Jardine Cycle & Carriage


3,039




3,161



Astra


11,049




16,421



Intersegment transactions


(118)




(146)














44,936




50,274


 

 

3.    Net Operating Costs

 


Six months ended 30th June














2020

US$m




2019

US$m





















Cost of sales


(11,851)




(15,261)



Other operating income


774




1,902



Selling and distribution costs


(2,101)




(2,228)



Administration expenses


(1,081)




(1,130)



Other operating expenses


(144)




(46)














(14,403)




(16,763)












Included in other operating income were government grants, the majority of which were in support of employee retention, and rent concessions of US$76 million and US$35 million, respectively, in relation to the COVID-19 pandemic for the six months ended 30th June 2020.












Net operating costs included the following gains/(losses) from non-trading items:


















Change in fair value of other investments


(91)




75



Sale of Jardine Lloyd Thompson (note 7)


-




1,507



Sale of other businesses


417




1



Sale of property interests


10




-



Closure of a hotel


-




(32)



Other


(3)




5














333




1,556


 

4.    Share of Results of Associates and Joint Ventures

 


Six months ended 30th June














2020

US$m




2019

US$m












By business:









Jardine Pacific


(35)




46



Jardine Motors


70




54



Hongkong Land


(90)




116



Dairy Farm


16




74



Mandarin Oriental


(14)




(2)



Jardine Cycle & Carriage


17




47



Astra


74




201



Corporate


(5)




-














33




536












Share of results of associates and joint ventures included the following gains/(losses) from non-trading items:


















Change in fair value of investment properties


(135)




(10)



Change in fair value of other investments


12




(6)



Asset impairment


(67)




-



Sale of businesses


-




8



Other


(2)




-














(192)




(8)


 

Results are shown after tax and non-controlling interests in the associates and joint ventures.

 

Included in share of results of associates and joint ventures were the Group's share of the government grants, the majority of which were in support of employee retention, and rent concessions of US$31 million and US$17 million, respectively, in relation to the COVID-19 pandemic for the six months ended 30th June 2020.

 

5.    Tax

 


Six months ended 30th June














2020

US$m




2019

US$m





















Tax charged to profit and loss is analysed as follows:


















Current tax


(270)




(456)



Deferred tax


42




64














(228)




(392)












Greater China


(81)




(113)



Southeast Asia


(150)




(276)



United Kingdom


5




(1)



Rest of the world


(2)




(2)














(228)




(392)












Tax relating to components of other comprehensive income or expense is analysed as follows:


















Remeasurements of defined benefit plans


(1)




1



Cash flow hedges


2




18














1




19


 

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.

 

Share of tax charge of associates and joint ventures of US$99 million and tax credit of US$19 million (2019: tax charge of US$199 million and tax credit of US$12 million) are included in share of results of associates and joint ventures and share of other comprehensive expense of associates and joint ventures, respectively.

 

 

6.    Earnings/(loss) per Share

 

Basic loss per share are calculated on loss attributable to shareholders of US$775 million (2019: profit of US$2,254 million) and on the weighted average number of 371 million (2019: 376 million) shares in issue during the period.

 

Diluted loss per share are calculated on loss attributable to shareholders of US$775 million (2019: profit of US$2,254 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 371 million (2019: 376 million) shares in issue during the period.

 

The weighted average number of shares is arrived at as follows:

 




Ordinary shares

in millions





2020




2019





















Weighted average number of shares in issue


733




737



Company's share of shares held by subsidiaries


(362)




(361)












Weighted average number of shares for basic earnings

per share calculation


371




376



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


371




376


 

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































2020









2019








US$m



Basic earnings per share

US$



Diluted earnings per share

US$



US$m



Basic earnings per share

US$



Diluted earnings per share

US$











































(Loss)/profit attributable to shareholders


(775)



(2.09)



(2.09)



2,254



5.99



5.99



Non-trading items (note 7)


1,148









(1,516)