Interim Results
Jardine Matheson Hldgs Ld
15 August 2007
To: Business Editor 15th August 2007
For immediate release
The following announcement was issued today to a Regulatory Information Service
approved by the Financial Services Authority in the United Kingdom.
Jardine Matheson Holdings Limited
Interim Results for the Six Months ended 30th June 2007
Highlights
• Strong growth in underlying earnings per share*
• Good performances from all Group companies
• Hongkong Land property portfolio value up 10%
• Increase in proportion of dividend payable at the interim
'The exceptional level of profit growth in the first half of 2007 was to some
extent flattered by comparison with a relatively weak start to the previous
year. While the pace of increase for the full year will inevitably slow, the
overall outlook remains positive provided the current benign environment
persists.'
Henry Keswick, Chairman
15th August 2007
Results
________________________________________________________________________________
(unaudited)
Six months ended 30th June
________________________________________________________________________________
2007 2006 Change
US$m US$m %
________________________________________________________________________________
Underlying profit attributable to
shareholders* 320 228 +41
Profit attributable to shareholders 793 550 +44
Shareholders' funds+ 7,362 6,594 +12
________________________________________________________________________________
US$ US$ %
________________________________________________________________________________
Underlying earnings per share* 0.90 0.65 +38
Earnings per share 2.24 1.57 +43
Interim dividend per share (rebalanced) 0.20 0.10 +100
________________________________________________________________________________
* The Group uses 'underlying business performance' in its internal
financial reporting to distinguish between the underlying profits and
non-trading items, as more fully described in note 8 to the condensed
financial statements. Management considers this to be a key measure and
has provided this analysis as additional information in order to provide
greater understanding of the Group's underlying business performance.
+ At 30th June 2007 and 31st December 2006, respectively.
________________________________________________________________________________
The interim dividend of USc20.00 per share will be payable on 24th October 2007
to shareholders on the register of members at the close of business on 31st
August 2007 and will be available in cash with a scrip alternative. The
ex-dividend date will be on 29th August 2007, and the share registers will be
closed from 3rd to 7th September 2007, inclusive.
Jardine Matheson Holdings Limited
Interim Results for the Six Months ended 30th June 2007
Overview
Most of the Group's businesses recorded good results, benefiting from the
positive economic environment that prevailed in Asian markets.
Performance
The Company's underlying profit attributable to shareholders for the first six
months of 2007 was US$320 million, up 41% over the same period in 2006.
Underlying earnings per share were 38% higher at US$0.90. The turnover of the
Group, including 100% of the turnover of associates and joint ventures, was
US$14.9 billion, compared to US$13.0 billion in the first half of 2006.
Non-trading items include a net gain of US$396 million arising from a further
increase in investment property values during the period, compared with a US$287
million gain in 2006. This has been taken through the profit and loss account.
Non-trading items also include profits arising on the restructuring of Jardine
Lloyd Thompson's French associate and the disposal by Jardine Strategic of part
of its shareholding in Butterfield Bank. After non-trading items, the Company's
profit attributable to shareholders was US$793 million.
Of the Group's wholly-owned subsidiaries, Jardine Pacific's result improved,
with satisfactory profit growth in many of its operations, and Jardine Motors
also produced increased earnings. Among the Group's major quoted subsidiaries,
Dairy Farm posted another good result with all its major retail formats
performing well; Mandarin Oriental benefited from healthy markets and a full
contribution from its renovated Hong Kong property to report an outstanding
profit increase; and Jardine Cycle & Carriage's earnings were sharply higher as
the recovery in Indonesia boosted Astra's results. Among the Group's
equity-accounted affiliates, Hongkong Land's contribution rose significantly as
positive rental reversions continued in its prime commercial portfolios, and
Jardine Lloyd Thompson reported improved figures based on firm cost control. The
Group's results were also helped by an enhanced contribution from its stake in
Rothschilds Continuation Holdings and by lower financing charges.
The Board has decided to rebalance the proportion of the dividend payable at the
half year to represent approximately one third of the total dividend payable for
the year. Accordingly an interim dividend of USc20.00 per share has been
declared, an increase of 100%.
Business Activity
Most of Jardine Pacific's businesses produced improved profit performances in
the first half of 2007, with the exception of its aviation and shipping
operations. HACTL saw only a modest growth in cargo volumes during the period,
while its medium-term profitability remains uncertain due to the additional
capacity that will be coming available at Hong Kong's airport in 2011.
Jardine Motors achieved good levels of sales in its Mercedes-Benz operations in
Hong Kong, Macau and Southern China. Its UK businesses also performed
satisfactorily, and recorded gains on property disposals. The group's results
for the full year, however, are unlikely to reach those achieved in 2006 as they
will not enjoy favourable pension adjustments or the same level of property
gains.
Dairy Farm has continued to build scale in its major markets across Asia with
further store openings in all formats; the group now operates 57 hypermarkets in
Southeast Asia. The expansion of its 7-Eleven chain in Southern China gathered
pace in June with the acquisition and re-branding of a convenience store chain
in Guangdong. Dairy Farm is now established in Vietnam, with its first four
stores laying the foundation for a more substantial business, while in India its
supermarket and health & beauty joint ventures continue to make progress. The
company has announced plans for a special dividend, which its strong cash
position will enable it to pay without impairing its development programme.
Mandarin Oriental's results have benefited from higher average room rates in its
key markets together with a full contribution from its freshly-renovated
flagship hotel in Hong Kong. The strength of its brand continues to attract
interest from owners and developers, and the group now has 16 hotels under
development following the announcement of five new projects during the first
half of the year. These include a 241-room hotel in the headquarters of China
Central Television in Beijing and a 150-room property in central Paris.
The continued improvement in the Indonesian economy led to enhanced results from
Jardine Cycle & Carriage's 50.1%-held subsidiary, Astra, where motor vehicle
sales rose significantly, although motorcycle sales showed only marginal growth
in the face of keen competition. Astra's financial services businesses and palm
oil operations are performing well, and United Tractors achieved profit growth
despite its coal mining activities experiencing a poor start to the year.
Jardine Cycle & Carriage's directly held motor dealership interests also
reported an increased contribution.
Robust commercial property markets in Hong Kong and Singapore enabled Hongkong
Land to achieve a significant increase in both earnings and capital values.
Construction is under way at the group's latest joint venture development in
Singapore, Marina Bay Financial Centre, which is scheduled for phased completion
from 2010. Hongkong Land's residential developments in Hong Kong, Macau,
mainland China and Singapore are progressing on target, while its Singapore
subsidiary, MCL Land, experienced strong demand on the launch of three new
residential projects.
Jardine Lloyd Thompson faced continued downward pressure on insurance rates and
further weakness in the US dollar in the first half, which particularly affected
its London market and reinsurance operations. It did well to record an increase
in underlying trading profit from continuing operations, primarily due to margin
improvement arising from tight cost control.
Rothschild's investment banking business produced record revenues in a positive
business environment. The group has recently announced a reorganization of its
shareholding interests to consolidate its French banking activities within the
same holding structure as N.M. Rothschild & Sons under Rothschilds Continuation
Holdings.
Outlook
In conclusion, the Chairman, Henry Keswick said, 'The exceptional level of
profit growth in the first half of 2007 was to some extent flattered by
comparison with a relatively weak start to the previous year. While the pace of
increase for the full year will inevitably slow, the overall outlook remains
positive provided the current benign environment persists.'
Operating Review
Jardine Pacific
Jardine Pacific's underlying profit from continuing businesses for the first
half of 2007 increased by 16% to US$53 million with further strong performances
from Jardine Restaurants and Gammon.
HACTL's result was little changed as the increase in cargo throughput in the
first half was only 1%. JARDINE AVIATION SERVICES' earnings declined due to
reduced flight frequencies and higher operating costs. JARDINE SHIPPING SERVICES
established a joint venture with a long-term liner principal, UASC, which led to
an initial reduction in the contribution from the transferred business, although
the effect on the company was largely offset by increased activity and firmer
rates.
GAMMON continued to perform well in Hong Kong and Macau in the first half of the
year. JARDINE SCHINDLER's earnings rose due to an improved performance from its
existing installation portfolio, while JEC recorded a higher profit with
increased contributions from Thailand and the Philippines.
JARDINE RESTAURANTS achieved significant earnings growth from its Pizza Hut
operation in Hong Kong. JARDINE ONESOLUTION recorded a 12% increase in sales,
which led to higher profits from most of its operations. ROOMPLUS, a self
storage business in Hong Kong, recorded a small loss, although its occupancy
levels have shown improvement. The group's interest in COLLIERS HALIFAX, a
property services joint venture in Japan, was sold to Hongkong Land in early
June.
Jardine Pacific's businesses are expected to produce steady performances in the
second half of the year.
Jardine Motors Group
Jardine Motors' underlying profit from continuing businesses for the first half
of 2007 was US$34 million, up 21%.
Zung Fu's new Mercedes-Benz car deliveries remained strong in Hong Kong,
although below the level achieved in the same period last year following the
successful launch of the new S-Class. Its service centres continued to perform
well, but the Hyundai passenger car franchise recorded a small loss in a very
competitive market segment. The performance of the Mercedes-Benz dealership in
Macau improved with a good build-up of its order book.
The Mercedes-Benz dealerships in Southern China continued their profitable
growth with a significant increase in new car deliveries, while the aftersales
business also achieved higher volumes.
The group's businesses in the United Kingdom benefited from a satisfactory new
car market, the acquisition in January of an Audi dealership group and gains
arising from the disposal of a property and a dealership. The resulting growth
in earnings was enhanced further upon translation into US dollars.
Overall, however, it is unlikely that Jardine Motors will achieve the same level
of earnings in 2007 as in 2006, when the group benefited from one-off pension
and property gains.
Jardine Lloyd Thompson
Against a background of increasingly challenging trading conditions Jardine
Lloyd Thompson's turnover for its continuing operations, following disposals in
the United States, was marginally ahead for the first six months at US$484
million.
The results of the actions to raise efficiency taken by management over the last
18 months are beginning to be seen. Underlying trading margin improved to 17%
from 15%, following a reduction in operating costs, and underlying trading
profit from continuing operations was up 10% at US$80 million.
Jardine Lloyd Thompson's Risk & Insurance group produced a modest growth in
turnover notwithstanding continued pressure on rates, intense competition and
further weakness in the US dollar, which particularly affected the London market
and reinsurance operations. Its Employee Benefits business in the United Kingdom
continued to make steady progress and produced an improved trading margin on a
turnover up 5%.
The continuing deterioration in insurance markets and the dollar-sterling
exchange rate will restrict growth in Jardine Lloyd Thompson's results for the
full year.
Hongkong Land
Continued strength in the commercial property markets in Hong Kong and Singapore
and lower financing charges enabled Hongkong Land to increase underlying profit
by 32% to US$155 million. A 10% improvement in capital values was recorded over
the period.
Competition for prime Central district office space in Hong Kong continues,
driven primarily by the financial services sector and underpinned by tight
supply. Vacancy in Hongkong Land's office portfolio at the end of June was 3%.
The group's retail portfolio is also benefiting from high demand and is fully
leased.
The strength of the financial services sector in Singapore is also behind the
demand for high quality office space. The recently completed One Raffles Quay,
developed by a consortium in which Hongkong Land holds a one-third interest, has
established itself as the leading office building in Singapore's prime business
district. The same consortium has now begun construction of the larger Marina
Bay Financial Centre.
Hongkong Land has a number of residential projects under development in Hong
Kong, Macau, mainland China and Singapore, which will contribute to its results
upon their completion over the next few years. Singapore subsidiary, MCL Land,
had an active first half in which it successfully launched three residential
projects and secured three additional development sites. The level of its profit
recognition on developments in 2007 will depend on whether a 421-unit project
completes before the year end or in early 2008.
The outlook for Hongkong Land for the remainder of the year is encouraging as it
will continue to benefit from positive rental reversions in its key markets.
Dairy Farm
Dairy Farm performed well in the first half of 2007 as it benefited from
favourable trading environments in its major markets. Sales, including those of
associates, increased by 11% to US$3.2 billion, and underlying profit for the
period was 17% higher at US$101 million.
Dairy Farm's North Asian businesses performed well with improved results from
retail banners in Hong Kong and Macau. In Taiwan, its supermarket operation
traded in line with last year in a highly competitive market, but IKEA's results
remain below expectations. The group now operates over 400 7-Eleven outlets in
Southern China following the acquisition and re-branding of a convenience store
chain in Guangdong. Hong Kong restaurant associate, Maxim's, enjoyed good growth
as its fast food operations continued to recover.
Sales and profit in East Asia grew following another good performance from
Malaysia, where there was further expansion in all formats, particularly in East
Malaysia. Earnings in Indonesia, however, remained unsatisfactory and management
changes were made to address the issues. The group has entered the Vietnamese
market with the acquisition of four supermarkets.
In South Asia sales rose 16%, but operating profit was only marginally higher as
the contribution from Singapore was affected by expenses incurred in the
relocation of its head office and distribution centre, and costs in establishing
two new Giant hypermarkets. The group's supermarket and health and beauty joint
ventures in India added 14 outlets, while the remodelling of older stores is
progressing. In Thailand, 13 health and beauty stores are now being operated in
Greater Bangkok.
Dairy Farm's retail businesses continue to enjoy leading positions in their
market sectors, and the prospects for the remainder of the year are positive.
Mandarin Oriental
Conditions in Mandarin Oriental's key markets remained strong in the first half
of 2007. Increases in average room rates together with a full contribution from
the newly-renovated Mandarin Oriental, Hong Kong enabled the group to achieve a
significant improvement in earnings. Underlying profit rose 150% to US$34
million. The net result benefited from a US$16 million gain arising on the sale
of half of its 50% equity interest in Mandarin Oriental, New York.
Mandarin Oriental, Hong Kong achieved a higher average room rate following its
refurbishment, and The Excelsior, Hong Kong also produced good growth in room
rate. The contribution from hotels in London and Geneva was higher due to the
strengthening of occupancy and room rates, while in the United States, its
Washington D.C. property continued to improve. Despite the reduced investment in
its New York property, contribution from associates and joint ventures also
increased.
Excellent progress was made in Mandarin Oriental's expansion programme with the
announcement of five projects during the first half of 2007. The group now has
16 hotels under development and, with the exception of Paris, these will be
management contracts requiring little or no investment from the group. Eight
will also incorporate a 'residences' component. Mandarin Oriental has some 9,800
rooms in operation or planned, and its geographic spread has increased
significantly with more than half of its portfolio outside of Asia.
Mandarin Oriental is expected to continue to experience favourable conditions
during the remainder of the year.
Jardine Cycle & Carriage
Jardine Cycle & Carriage achieved a good level of profit growth in the first
half of 2007 as the businesses of its 50.1%-held subsidiary, Astra, benefited
from the continued strengthening of the Indonesian economy. Underlying profit
for the six months increased by 56% to US$152 million.
Astra's contribution was 46% higher at US$147 million, enhanced in part by a
stronger Rupiah. Improved earnings were achieved in its automotive, financial
services, palm oil and heavy equipment activities.
The contribution to Jardine Cycle & Carriage from its directly held motor
operations rose 43% to US$19 million. In Singapore, its operations produced a
good result, supported by strong demand for Mercedes-Benz passenger cars.
Indonesian associate, Tunas Ridean, performed well in line with the strong
market, but Cycle & Carriage Bintang continued to struggle as trading conditions
in the Malaysian automotive sector remained difficult.
The encouraging performances in most of Jardine Cycle & Carriage's key
businesses are expected to continue for the remainder of the year, although the
motorcycle sector in Indonesia will remain challenging for Astra.
Astra International
Astra performed well as the Indonesian automotive market continued to recover,
particularly in the motor vehicle sector which has seen a greater decline in
2006 than motorcycles. The wholesale motor vehicle market grew by 32% to 197,300
units in the first six months of the year. Astra's motor vehicle sales also
increased, but at the lower rate of 25% to 104,300 units. This led to its market
share reducing from 56% to 53%. Sales in the wholesale motorcycle market in
Indonesia rose 17% during the same period, reaching 2.1 million units. In the
face of keen competition, however, Astra's wholesale motorcycle sales were only
marginally higher at 923,400 units and its market share fell from 50% to 44%.
Astra's financial services activities benefited from the growth in the
automotive market, while Bank Permata performed well due to the higher net
interest margins achieved. Astra Agro Lestari's earnings were strongly ahead
following a 56% increase in crude palm oil prices, which more than offset the
effects of a 12% decline in production. United Tractors produced a modest growth
in earnings as a 57% increase in unit sales of Komatsu equipment compensated for
lower contribution from its coal mining subsidiary, Pamapersada Nusantara,
resulting from adverse weather conditions and operational interruptions.
________________________________________________________________________________
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
________________________________________________________________________________
(unaudited)
Six months ended 30th June Year ended 31st December
2007 2006 2006
Underlying Underlying Underlying
business Non-trading business Non-trading business Non-trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
________________________________________________________________________________________________________________________
Revenue (note 2) 9,189 - 9,189 7,878 - 7,878 16,281 - 16,281
Net operating costs
(note 3) (8,543) 94 (8,449) (7,439) 97 (7,342) (15,274) 302 (14,972)
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Operating profit
(note 4) 646 94 740 439 97 536 1,007 302 1,309
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Financing charges (127) - (127) (110) - (110) (234) - (234)
Financing income 68 - 68 46 - 46 102 - 102
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Net financing
charges (59) - (59) (64) - (64) (132) - (132)
Share of results of
associates and joint
ventures (note 5) 257 510 767 205 363 568 439 748 1,187
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Profit before tax 844 604 1,448 580 460 1,040 1,314 1,050 2,364
Tax (note 6) (174) (11) (185) (111) (46) (157) (252) (58) (310)
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Profit after tax 670 593 1,263 469 414 883 1,062 992 2,054
________ __________ _______ ___________ __________ _______ _____________ __________ ________
Attributable to:
Shareholders of the
Company 320 473 793 228 322 550 533 815 1,348
Minority interests 350 120 470 241 92 333 529 177 706
________ __________ _______ ___________ __________ _______ _____________ __________ ________
670 593 1,263 469 414 883 1,062 992 2,054
________ __________ _______ ___________ __________ _______ _____________ __________ ________
US$ US$ US$ US$ US$ US$
________________________________________________________________________________________________________________________
Earnings per share
(note 7)
- basic 0.90 2.24 0.65 1.57 1.52 3.83
- diluted 0.90 2.19 0.65 1.53 1.51 3.75
________ ________ ________ ________ ________ ________
________________________________________________________________________________
Jardine Matheson Holdings Limited
Consolidated Balance Sheet
________________________________________________________________________________
(unaudited) At 31st
At 30th June December
Restated
2007 2006 2006
US$m US$m US$m
_________________________________________________________
Assets
Intangible assets 1,873 1,743 1,825
Tangible assets 2,979 2,610 2,931
Investment properties 267 179 271
Plantations 474 413 460
Associates and joint ventures 7,168 5,497 6,476
Other investments 664 877 597
Non-current debtors 879 1,141 1,052
Deferred tax assets 118 116 119
Pension assets 173 150 174
__________ __________ __________
Non-current assets 14,595 12,726 13,905
__________ __________ __________
Stocks and work in progress 1,478 1,447 1,478
Current debtors 2,506 2,441 2,262
Current investments 13 - 3
Current tax assets 140 83 142
Bank balances and other liquid funds
__________ __________ __________
- non-financial services companies 2,292 1,693 2,355
- financial services companies 233 189 173
__________ __________ __________
2,525 1,882 2,528
__________ __________ __________
6,662 5,853 6,413
Non-current assets classified as
held for sale (note 9) 10 39 60
__________ __________ __________
Current assets 6,672 5,892 6,473
__________ __________ __________
__________ __________ __________
Total assets 21,267 18,618 20,378
__________ __________ __________
________________________________________________________________________________
Jardine Matheson Holdings Limited
Consolidated Balance Sheet (continued)
________________________________________________________________________________
(unaudited) At 31st
At 30th June December
Restated
2007 2006 2006
US$m US$m US$m
_________________________________________________________
Equity
Share capital 154 153 154
Share premium and capital reserves 33 25 29
Revenue and other reserves 8,102 6,404 7,303
Own shares held (927) (873) (892)
__________ __________ __________
Shareholders' funds (note 10) 7,362 5,709 6,594
Minority interests 4,846 4,070 4,509
__________ __________ __________
Total equity 12,208 9,779 11,103
__________ __________ __________
Liabilities
Long-term borrowings
__________ __________ __________
- non-financial services companies 1,918 2,375 2,074
- financial services companies 680 825 723
__________ __________ __________
2,598 3,200 2,797
Deferred tax liabilities 572 466 557
Pension liabilities 152 191 151
Non-current creditors 133 154 190
Non-current provisions 21 17 20
__________ __________ __________
Non-current liabilities 3,476 4,028 3,715
__________ __________ __________
Current creditors 3,334 2,779 2,920
Current borrowings
__________ __________ __________
- non-financial services companies 1,153 806 1,522
- financial services companies 854 1,027 954
__________ __________ __________
2,007 1,833 2,476
Current tax liabilities 179 145 101
Current provisions 63 53 63
_________ __________ __________
5,583 4,810 5,560
Liabilities directly associated with
non-current assets classified as
held for sale (note 9) - 1 -
_________ __________ __________
Current liabilities 5,583 4,811 5,560
_________ __________ __________
Total liabilities 9,059 8,839 9,275
_________ __________ __________
_________ __________ __________
Total equity and liabilities 21,267 18,618 20,378
_________ __________ __________
________________________________________________________
________________________________________________________________________________
Jardine Matheson Holdings Limited
Consolidated Statement of Recognized Income and Expense
________________________________________________________________________________
Year
(unaudited) ended
Six months ended 31st
30th June December
2007 2006 2006
US$m US$m US$m
________________________________________
Surpluses on revaluation of properties 1 - 120
Gains on revaluation of other investments 124 208 294
Actuarial gains/(losses) on defined benefit
pension plans 16 (10) 40
Net exchange translation differences (2) 225 393
Gains/(losses) on cash flow hedges 3 2 (13)
Tax on items taken directly to equity (24) 3 (71)
__________ __________ __________
Net income recognized directly in equity 118 428 763
Transfer to profit and loss on disposal of
other investments (44) (8) (79)
Transfer to profit and loss on realization
of exchange reserves (7) 1 (3)
Transfer to profit and loss in respect of
cash flow hedges 1 2 4
Profit after tax 1,263 883 2,054
__________ __________ __________
Total recognized income and expense for
the period 1,331 1,306 2,739
__________ __________ __________
Attributable to:
Shareholders of the Company 861 777 1,681
Minority interests 470 529 1,058
__________ __________ __________
1,331 1,306 2,739
__________ __________ __________
_________________________________________
________________________________________________________________________________
Jardine Matheson HoldingsLimited
Consolidated Cash Flow Statement
________________________________________________________________________________
Year
(unaudited) ended
Six months ended 31st
30th June December
2007 2006 2006
US$m US$m US$m
________________________________________________
Operating activities
________ ________ ________
Operating profit 740 536 1,309
Depreciation and amortization 232 194 403
Other non-cash items (17) 7 (138)
Decrease in working capital 136 185 478
Interest received 60 45 95
Interest and other financing charges paid (113) (105) (212)
Tax paid (115) (185) (362)
________ ________ ________
923 677 1,573
Dividends from associates and joint ventures 166 236 377
________ ________ ________
Cash flows from operating activities 1,089 913 1,950
Investing activities
Purchase of subsidiary undertakings
(note 12(a)) (18) (31) (55)
Purchase of associates and joint ventures
(note 12(b)) (105) (45) (465)
Purchase of other investments (27) (5) (94)
Purchase of land use rights (3) (4) (17)
Purchase of other intangible assets (50) - (6)
Purchase of tangible assets (263) (363) (725)
Purchase of investment properties (3) (2) (2)
Purchase of plantations (16) (8) (22)
Advance of mezzanine loans (3) - -
Repayment of mezzanine loans 12 - -
Capital distribution from associates 12 1 1
Sale of subsidiary undertakings (note 12(c)) 7 272 231
Sale of associates and joint ventures
(note 12(d)) 102 9 100
Sale of other investments (note 12(e)) 72 46 480
Sale of land use rights 12 8 26
Sale of tangible assets 38 28 75
________ ________ ________
Cash flows from investing activities (233) (94) (473)
Financing activities
________ ________ ________
Issue of shares 1 2 3
Capital contribution from minority shareholders 1 10 13
Drawdown of borrowings 2,682 4,629 7,611
Repayment of borrowings (3,364) (5,171) (8,008)
Dividends paid by the Company (81) (71) (91)
Dividends paid to minority shareholders (97) (77) (243)
________ ________ ________
Cash flows from financing activities (858) (678) (715)
Effect of exchange rate changes 1 20 45
________ ________ ________
Net (decrease)/increase in cash and cash
equivalents (1) 161 807
Cash and cash equivalents at beginning
of period 2,491 1,684 1,684
________ ________ ________
Cash and cash equivalents at end
of period 2,490 1,845 2,491
________ ________ ________
________________________________________________________________________________
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
________________________________________________________________________________
Year
(unaudited) ended
Six months ended 31st
30th June December
2007 2006 2006
US$m US$m US$m
____________________________________
Group contribution
Jardine Pacific 52 46 103
Jardine Motors Group 34 31 67
Jardine Lloyd Thompson 20 18 28
Hongkong Land 58 39 85
Dairy Farm 63 53 131
Mandarin Oriental 21 8 27
Jardine Cycle & Carriage 10 6 16
Astra 71 46 101
Corporate and other interests (9) (19) (25)
_________ _________ _________
Underlying net profit 320 228 533
Increase in fair value of investment properties 396 287 671
Other non-trading items 77 35 144
_________ _________ _________
Profit attributable to shareholders 793 550 1,348
Analysis of Jardine Pacific's contribution
Gammon 9 6 14
HACTL 14 14 33
Jardine Aviation Services 3 4 9
JEC 4 3 12
JOS 6 5 11
Jardine Property Investment 1 1 3
Jardine Restaurants 10 8 14
Jardine Schindler 9 8 12
Jardine Shipping Services 2 2 4
Corporate and other interests (5) (6) (12)
_________ _________ _________
Continuing businesses 53 45 100
Discontinued businesses (1) 1 3
_________ _________ _________
52 46 103
_________ _________ _________
Analysis of Jardine Motors Group's contribution
Hong Kong and Mainland China 20 21 36
United Kingdom 15 8 29
Corporate (1) (1) (2)
_________ _________ _________
Continuing businesses 34 28 63
Discontinued businesses - 3 4
_________ _________ _________
34 31 67
_________ _________ _________
________________________________________________________________________________
Jardine Matheson Holdings Limited
Notes
________________________________________________________________________________
1. Accounting Policies and Basis of Preparation
The financial information contained in this announcement has been based on the
unaudited interim condensed financial statements, which have been prepared in
accordance with IAS 34, Interim Financial Reporting.
In 2007, the Group adopted the following standards and interpretations to
existing standards which are relevant to its operations:
_____________________________________________________________________________
IFRS 7 Financial Instruments: Disclosures
IAS 1 (amended 2005) Presentation of Financial Statements - Capital Disclosures
IFRIC 8 Scope of IFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
_____________________________________________________________________________
There have been no changes to the accounting policies described in the 2006
annual financial statements as a result of adoption of the above standards and
interpretations.
The comparative figures for the six months ended 30th June 2006 have been
restated to reflect revisions to the provisional fair value of certain
liabilities in Rothschilds determined at the date of acquisition, which were
reflected in the 2006 annual financial statements.
Certain comparative figures have been reclassified to conform with the current
period presentation.
The Group's reportable segments are set out in note 2 and are described above in the Operating Review.
2. Revenue
Six months ended 30th June
2007 2006
US$m US$m
__________________________
By business:
Jardine Pacific 535 472
Jardine Motors Group 1,479 1,185
Dairy Farm 2,796 2,496
Mandarin Oriental 250 183
Jardine Cycle & Carriage 642 558
Astra 3,486 2,980
Other activities 1 4
___________ ___________
9,189 7,878
___________ ___________
3. Net Operating Costs
Six months ended 30th June
2007 2006
US$m US$m
__________________________
Cost of sales (7,081) (6,046)
Other operating income 179 182
Selling and distribution costs (1,072) (1,030)
Administration expenses (465) (436)
Other operating expenses (10) (12)
___________ ___________
(8,449) (7,342)
___________ ___________
4. Operating Profit
Six months ended 30th June
2007 2006
US$m US$m
__________________________
By business:
Jardine Pacific 37 28
Jardine Motors Group 59 43
Dairy Farm 113 97
Mandarin Oriental 70 92
Jardine Cycle & Carriage 21 18
Astra 415 267
___________ ___________
715 545
Corporate and other interests 25 (9)
___________ ___________
740 536
___________ ___________
Operating profit included the following gains from
non-trading items:
Sale and closure of businesses 30 84
Sale of investments 47 11
Realization of exchange gains* 7 -
Discount on acquisition of businesses 9 -
Other 1 2
___________ ___________
94 97
___________ ___________
* Arising on repatriation of capital from a foreign subsidiary undertaking.
5. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2007 2006
US$m US$m
___________________________
By business:
Jardine Pacific 39 39
Jardine Motors Group - 3
Jardine Lloyd Thompson 38 18
Hongkong Land 569 406
Dairy Farm 11 10
Mandarin Oriental 8 6
Jardine Cycle & Carriage 4 2
Astra 86 70
Corporate and other interests 12 14
____________ ____________
767 568
____________ ____________
Share of results of associates and joint ventures included
the following gains/(losses) from non-trading items:
Increase in fair value of investment properties 496 360
Sale and closure of businesses (3) 1
Sale of investments - 5
Restructuring of SIACI in Jardine Lloyd Thompson 18 -
Other (1) (3)
____________ ____________
510 363
____________ ____________
Results are shown after tax and minority interests in the associates and joint
ventures.
6. Tax
Six months ended 30th June
2007 2006
US$m US$m
___________________________
United Kingdom 7 5
Other jurisdictions 178 152
____________ ____________
185 157
____________ ____________
Tax on profits has been calculated at rates of taxation prevailing in the
territories in which the Group operates. Share of tax of associates and joint
ventures of US$166 million (2006: US$130 million) are included in share of
results of associates and joint ventures.
7. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders
of US$793 million (2006: US$550 million) and on the weighted average number of
354 million (2006: 350 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders
of US$777 million (2006: US$537 million), which is after adjusting for the
effects of the conversion of dilutive potential ordinary shares of subsidiary
undertakings, associates or joint ventures, and on the weighted average number
of 355 million (2006: 352 million) shares after adjusting for the number of
shares which are deemed to be issued for no consideration under the Senior
Executive Share Incentive Schemes based on the average share price during the
period.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2007 2006
__________________________
Weighted average number of shares in issue 617 607
Shares held by the Trustee under the Senior
Executive Share Incentive Schemes (2) (2)
Company's share of shares held by subsidiary
undertakings (261) (255)
_________ _________
Weighted average number of shares for basic
earnings per share calculation 354 350
Adjustment for shares deemed to be issued for no
consideration under the Senior Executive Share
Incentive Schemes 1 2
_________ _________
Weighted average number of shares for diluted
earnings per share calculation 355 352
_________ _________
Additional basic and diluted earnings per share are also calculated based on
underlying profit attributable to shareholders. A reconciliation of earnings is
set out below:
Six months ended 30th June
2007 2006
Basic Diluted Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
_____________________________________________________________________________
Profit attributable
to shareholders 793 2.24 2.19 550 1.57 1.53
Non-trading items
(note 8) (473) (322)
_____ _____
Underlying profit
attributable
to shareholders 320 0.90 0.90 228 0.65 0.65
_____ _____
8. 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; gains and losses arising from the sale of businesses, investments
and properties; impairment of non-depreciable intangible assets and other
investments; provisions for the closure of businesses; 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 minority interests is
set out below:
Six months ended 30th June
2007 2006
US$m US$m
______________________
Increase in fair value of investment properties in
Hongkong Land 396 287
Sale and closure of businesses
______ ______
- 25% interest in Mandarin Oriental, New York 9 -
- The Mark - 21
- other 4 1
______ ______
13 22
Sale of investments 37 15
Restructuring of SIACI in Jardine Lloyd Thompson 18 -
Realization of exchange gains* 7 -
Discount on acquisition of businesses 2 -
Other - (2)
______ ______
473 322
______ ______
* Arising on repatriation of capital from a foreign subsidiary undertaking.
9. Non-current Assets Classified as Held for Sale
The major classes of assets and liabilities classified as held for sale are set out below:
At 31st
At 30th June December
2007 2006 2006
US$m US$m US$m
______________________________
Tangible assets 3 11 4
Investment properties 7 - 2
Associates and joint ventures - 28 14
Non-current debtors - - 31
Current assets - - 9
_____ _____ _____
Total assets 10 39 60
_____ _____ _____
Deferred tax liabilities - 1 -
_____ _____ _____
Total liabilities - 1 -
_____ _____ _____
At 30th June 2007, the non-current assets classified as held for sale included
certain of Jardine Motors Group's properties in the United Kingdom and Jardine
Cycle & Carriage's investment properties in Malaysia.
Non-current assets classified as held for sale at 31st December 2006 principally
related to Mandarin Oriental's 25% interest in Mandarin Oriental, New York of
US$14 million and its mezzanine loan to the hotel of US$40 million. The sale was
completed in March 2007 resulting in a profit before tax of US$25 million, which
was included in other operating income.
10.Shareholders' Funds
Six months ended 30th June
2007 2006
US$m US$m
__________________________
At 1st January
- as previously reported 6,594 4,999
- revision of fair value adjustments on acquisition
of Rothschilds - (1)
____________ ____________
- as restated 6,594 4,998
Recognized income and expense attributable to shareholders 861 777
Dividends (note 11) (141) (125)
Employee share option schemes
- value of employee services 3 4
- exercise of share options 1 2
Scrip issued in lieu of dividends 78 144
Change in attributable interests 1 1
Increase in own shares held (35) (92)
____________ ____________
At 30th June 7,362 5,709
____________ ____________
11.Dividends
Six months ended 30th June
2007 2006
US$m US$m
__________________________
Final dividend in respect of 2006 of USc40.00
(2005: USc35.65) per share 246 216
Company's share of dividends paid on the shares
held by subsidiary undertakings (105) (91)
____________ ____________
141 125
____________ ____________
An interim dividend in respect of 2007 of USc20.00 (2006: USc10.00) per share
amounting to a total of US$124 million (2006: US$61 million) is declared by the
Board. The net amount after deducting the Company's share of the dividends
payable on the shares held by subsidiary undertakings of US$53 million (2006:
US$26 million) will be accounted for as an appropriation of revenue reserves in
the year ending 31st December 2007.
12.Notes to Consolidated Cash Flow Statement
Six months ended 30th June
2007 2006
(a) Purchase of subsidiary undertakings US$m US$m
_________________________
Intangible assets 2 -
Tangible assets 3 4
Current assets 31 15
Long-term borrowings - (1)
Pension liabilities (1) (1)
Non-current creditors (1) -
Current liabilities (20) (9)
Minority interests - (2)
___________ ___________
Fair value of net assets 14 6
Adjustment for minority interests - 4
___________ ___________
Fair value of net assets acquired 14 10
Goodwill 6 3
___________ ___________
Total consideration 20 13
Adjustment for carrying value of associates and
joint ventures - (2)
Cash and cash equivalents of subsidiary
undertakings acquired (2) -
___________ ___________
Net cash outflow 18 11
Purchase of shares in Jardine Cycle & Carriage - 20
___________ ___________
18 31
___________ ___________
Net cash outflow in 2007 of US$18 million principally related to Jardine Motors
Group's acquisition of a dealership in the United Kingdom. Net cash outflow in
2006 of US$11 million included US$6 million for Jardine Motors Group's
acquisition of dealerships in the United Kingdom
(b) Purchase of associates and joint ventures for the six months ended 30th June
2007 included Jardine Strategic's increased interest in Hongkong Land of US$96
million. Purchase of associates and joint ventures for the six months ended 30th
June 2006 included US$26 million for Astra's interest in Toyota Astra Financial
Services and Jardine Strategic's increased interest in Hongkong Land of US$13
million.
Six months ended 30th June
2007 2006
(c) Sale of subsidiary undertakings US$m US$m
__________________________
Intangible assets 1 12
Tangible assets 1 92
Investment properties - 24
Associates and joint ventures - 35
Deferred tax assets - 1
Current assets 4 615
Long-term borrowings - (100)
Deferred tax liabilities - (1)
Current liabilities - (163)
_________ _________
Net assets 6 515
Adjustment for minority interests - (261)
_________ _________
Net assets disposed of 6 254
Cumulative exchange translation differences 1 (3)
Profit on disposal - 83
_________ _________
Sale proceeds 7 334
Adjustment for carrying value of associates and
joint ventures - (13)
Closure and related costs - (1)
Cash and cash equivalents of subsidiary undertakings
disposed of - (48)
_________ _________
Net cash inflow 7 272
_________ _________
Sale proceeds in 2006 of US$334 million included US$143 million from Mandarin
Oriental's sale of its interest in The Mark, New York, US$28 million from
Astra's partial sale of its interest in Aisin and US$163 million from the sale
of the Group's interest in MCL Land.
(d) Sale of associates and joint ventures for the six months ended 30th June 2007
included US$22 million from Jardine Pacific's sale of its 50% interest in
Colliers Halifax and US$75 million from Mandarin Oriental's sale of its 25%
interest in Mandarin Oriental, New York.
(e) Sale of other investments for the six months ended 30th June 2007 included
US$50 million and US$12 million from Jardine Strategic's sale of its interest
in The Bank of N.T. Butterfield & Son and CNAC respectively. Sale of other
investments for the six months ended 30th June 2006 included US$31 million
from Jardine Pacific's sale of its interest in BALtrans.
13.Capital Commitments and Contingent Liabilities
At 31st
At 30th June December
2007 2006 2006
US$m US$m US$m
_________________________________________
Capital commitments 241 315 202
_____ _____ _____
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 financial statements.
________________________________________________________________________________
The interim dividend of USc20.00 per share will be payable on 24th October 2007
to shareholders on the register of members at the close of business on 31st
August 2007, and will be available in cash with a scrip alternative. The
ex-dividend date will be on 29th August 2007, and the share registers will be
closed from 3rd to 7th September 2007, inclusive. Shareholders will receive
their cash dividends in United States Dollars, unless they are registered on the
Jersey branch register where they will have the option to elect for Sterling.
These shareholders may make new currency elections by notifying the United
Kingdom transfer agent in writing by 5th October 2007. The Sterling equivalent
of dividends declared in United States Dollars will be calculated by reference
to a rate prevailing on 10th October 2007. Shareholders holding their shares
through The Central Depository (Pte) Limited ('CDP') in Singapore will receive
United States Dollars unless they elect, through CDP, to receive Singapore
Dollars or the scrip alternative.
________________________________________________________________________________
-end-
For further information, please contact:
Jardine Matheson Limited
James Riley (852) 2843 8229
Matheson & Co., Limited
Philip Hawkins (020) 7816 8136
GolinHarris
Kennes Young (852) 2501 7987
Weber Shandwick Financial
Richard Hews/ Georgia Dempsey (020) 7067 0700
This and other Group announcements can be accessed through the Internet at
'www.jardines.com'.
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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