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Jardine Matheson Hldgs Ltd  -  JAR   

Half-year Report

Released 10:41 27-Jul-2018

RNS Number : 9261V
Jardine Matheson Hldgs Ltd
27 July 2018
 

To:    Business Editor                                                                         27th July 2018

                                                                                                             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 2018

 

Highlights

·     Underlying profit up 6%

·     Good performances from Astra and Jardine Cycle & Carriage  

·     Strong financial position maintained

 

"After a good performance in the first half of 2018 driven primarily by Astra and Jardine Cycle & Carriage, we are optimistic for a stronger second half of the year, with these companies continuing to perform well and the contributions of other businesses expected to improve."

 

Sir Henry Keswick, Chairman

 

Results

                                                                                             (unaudited)

Six months ended 30th June


 

 


2018 US$m

2017

US$m

 

Change

%

Gross revenue including 100% of associates and joint ventures

44,348

37,417


+19

Revenue

21,327

18,783


+14

Underlying profit* attributable to shareholders

792

744


+6

Profit attributable to shareholders

928

2,174


-57

Shareholders' funds#

25,830

25,659


+1


US$

US$


%

Underlying earnings per share*

2.11

1.98


+7

Earnings per share

2.47

5.79


-57

Net asset value per share#

68.48

68.19


-

 

US¢

US¢


%

Interim dividend per share

42.00

40.00


+5

* 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 2018 and 31st December 2017, respectively.  Net asset value per share is based on the book value of shareholders' funds.

The accounts have been restated due to changes in accounting policies upon adoption of IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers', as set out in note 1 to the condensed financial statements.

The interim dividend of US¢42.00 per share will be payable on 10th October 2018 to shareholders on the register of members at the close of business on 17th August 2018 and will be available in cash with a scrip alternative.


Jardine Matheson Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2018

 

Overview

Jardine Matheson produced a good result in the first half of 2018, with strong performances from Astra and Jardine Cycle & Carriage which were partially offset by Jardine Pacific.  Dairy Farm saw a slight increase in profit, while Hongkong Land was slightly down against the prior year.

 

Results

The Group's underlying profit for the first six months of 2018 rose 6% to US$792 million, and underlying earnings per share were up 7% at US$2.11.  The revenue of the Group for the period was 14% higher at US$21,327 billion, while revenue, including 100% of associates and joint ventures, was up 19% at US$44,348 billion.

 

Within the Group's businesses, Jardine Pacific saw lower results from Restaurants and Transport Services and steady performances by Gammon, Jardine Schindler and JECJardine Motors made a good start to the year in Hong Kong, but its margins in mainland China and the United Kingdom came under pressure.  Its increased underlying profit included a contribution from Zhongsheng, which became an associate in the second half of 2017.  Jardine Lloyd Thompson delivered a solid performance in the context of continuing inconsistency in global insurance markets.

 

Results from Hongkong Land were slightly down.  While the contribution from its investment properties was higher, due to positive rental reversions in Hong Kong, profits from its development properties were lower due to the timing of sales completions in mainland China, partially offset by a higher contribution from Singapore.

 

Dairy Farm saw an increase in sales with profit slightly higher than the prior year.  There were strong results from North Asia, driven by the Health and Beauty business in Hong Kong and Macau, but the Southeast Asian Food businesses continued to face significant challenges.

 

At Mandarin Oriental, underlying profits were higher due to generally improved performances across the Group's portfolio, notably in Hong Kong, Singapore, Bangkok and Tokyo.  The impact of the fire at its London hotel is being assessed by insurers with the estimate of a write-off of tangible assets offset by insurance claims recoverable.  Given the coverage under the group's insurance arrangements, the impact on profitability is expected to be modest.

 

In Southeast Asia, Jardine Cycle & Carriage saw stronger performances by its Direct Motor Interests and Other Strategic Interests.  Astra also performed well, with strong performances from its heavy equipment and mining businesses and an improved contribution from its financial services division, which more than offset lower contributions from its agribusiness and infrastructure operations.  Net income from the automotive business was flat.

 

Non-trading gains in the first half totalled US$136 million, primarily consisting of a net gain of US$289 million from revaluations of investment properties and a net loss of US$157 million due to unrealised fair value losses related to non-current investments.  This compares with a net non-trading gain of US$1,430 million in the first half of 2017.  Accordingly, the Group's profit attributable to shareholders for the period was US$928 million, compared with US$2,174 million in 2017.

 

The Board has declared an increased interim dividend of US¢42.00 per share.

 

Business Developments

Hongkong Land has continued to benefit from tight supply in the Hong Kong office leasing market and vacancy in the Singapore office portfolio also remains low.  WF CENTRAL in Beijing is performing in line with expectations and its hotel, Mandarin Oriental Wangfujing, is expected to open towards the end of the year.  Planning of the prime commercial joint venture project in the central business district of Bangkok, which was secured in late 2017, continues in line with schedule.  Good progress was made in the period in securing new sites for development, including a prime commercial site in Nanjing's central business district and a residential site in Singapore, as well as projects in Bangkok, Jakarta and Manila.  Hongkong Land's joint venture projects in the rest of Southeast Asia are progressing on schedule.

 

Dairy Farm continues to face challenges on several fronts, including increasing competitive pressures and a number of underperforming businesses within its portfolio.  In order to address these, it has consolidated its trading operations into a more centralised structure with two main trading divisions, North Asia and Southeast Asia, in addition to Home Furnishings and Maxim's, which remain as standalone divisions.  Newly constituted shared functions will provide specialist support to all divisions and a strengthened and broadened leadership team has been created to meet the requirements of the business.  These structural and management changes will enable the group to address the issues it faces, but time will be needed to deliver sustainable improvement.  A series of programmes is underway to address its strategic priorities of building capability, protecting the Hong Kong business, revitalising the Southeast Asia operations, growing presence in China, and driving digital innovation.  A partnership has been announced with Robinsons Retail Holdings Inc. to build a leading food retail business in the Philippines.

 

Five new management contracts were signed by Mandarin Oriental in the first half of the year, while new hotels in Beijing, Doha and Dubai, as well as The Residences at Mandarin Oriental in Bangkok, are expected to open over the next 12 months.  Management of the  Las Vegas hotel will cease at the end of August 2018 following a change of ownership.  Strategic options for The Excelsior, Hong Kong, including the possible redevelopment of the site into a commercial building, remain under consideration.

 

People

Dr Richard Lee stepped down as a Director on 10th May 2018.  We would like to thank him for his significant contribution to the Company over many years.  We are pleased to welcome Julian Hui to the Board.

 

Outlook

After a good performance in the first half of 2018 driven primarily by Astra and Jardine Cycle & Carriage, we are optimistic for a stronger second half of the year, with these companies continuing to perform well and the contributions of other businesses expected to improve.

 

Sir Henry Keswick

Chairman



Operating Review

 

Jardine Pacific

Jardine Pacific's underlying profit for the first half was down 6% at US$63 million, as lower results from Restaurants and Transport Services, and steady performances by Gammon, Jardine Schindler and JEC, were mitigated by the contribution from the interest in Greatview, acquired in June 2017.  Jardine Restaurants reported a lower result due to difficult trading conditions in Taiwan and Vietnam.  The results of the Transport Services business were impacted by the loss of a significant customer at Hactl but, generally, cargo throughput was in line with the market.  Jardine Schindler saw flat profits, but further growth in its maintenance portfolio, while Gammon's profits were broadly in line with last year due to project timing, but its order book remains strong.  JEC produced a stable contribution, with its Hong Kong operations performing well.  Greatview's business saw revenue growth, with good performances in both China and its international business.

 

Jardine Motors

Jardine Motors saw its underlying net profit for the first half increase by 6% to US$87 million, including the contribution from Zhongsheng.  Hong Kong reported steady profit growth and there were increased sales of new cars.  In mainland China, however, profits were lower as a result of reduced margins on new car sales.  UK vehicle sales were higher but margins were compressed resulting in a lower profit.

 

Jardine Lloyd Thompson

JLT delivered a solid performance against a backdrop of continuing inconsistency and unpredictability in global economic and insurance market environments.  In April, the group restructured into three global business segments: Specialty, Reinsurance and Employee Benefits.  Total revenue was US$978 million, an increase of 3% in its reporting currency, representing 4% organic revenue growth.  Underlying profit before tax increased by 10%, compared to the first half of 2017.  In the period, the group incurred costs relating to its global transformation programme, which is already beginning to contribute to an improvement in operating performance.  After adjusting for the costs of the programme and on conversion into US dollars, JLT's contribution to the Group's underlying profit was 2% lower than in the prior year.

 

Hongkong Land

Hongkong Land's underlying profit attributable to shareholders for the first six months was US$455 million, down 3%, largely due to the timing of sales completions of development properties in mainland China.  There was a strong performance from investment properties due to positive rental reversions in Hong Kong, in both the office and retail portfolios.  Profit attributable to shareholders was US$1,124 million after accounting for a net gain of US$661 million arising on the revaluation of investment properties.  This compares with a profit of US$3,114 million in the first half of 2017, including a net revaluation gain of US$2,608 million.

 

Hongkong Land's investment properties benefited from the tight supply in the Hong Kong Central office leasing market.  Vacancy in the group's Central office portfolio at 30th June 2018 was 1.9%, compared with 1.4% at the end of 2017.  The retail portfolio remained effectively fully occupied.  In Singapore, mildly negative rental reversions continued, although there are signs of a market recovery with reversions expected to become positive later in the year.  Vacancy in the group's office portfolio was 0.1% at the end of June 2018, compared with 0.3% at the end of 2017.

 

The profit contribution from development properties was lower as a result of fewer sales completions in mainland China than in the first half of 2017, due to phasing.  The number of sales completions will increase in the second half, particularly in relation to projects in Chongqing.  At 30th June, the group had US$1,507 million in sold but unrecognised contracted sales, compared with US$1,032 million at the end of 2017.  Results from Singapore were driven by the completion of the Sol Acres executive condominium project and the percentage of completion of sold units at the Lake Grande project, which is on schedule for completion in 2019.  The group's joint venture projects in the rest of Southeast Asia are progressing on schedule.

 

Dairy Farm

Dairy Farm saw sales of US$5.9 billion for the period by the group's subsidiaries, 8% ahead of the prior year or 6% higher at constant rates of exchange.  Total sales, including 100% of associates and joint ventures, increased by 17% to US$12.2 billion.  Underlying profit of US$215 million was 2% higher than the same period last year, as strong results from North Asia and Maxim's were offset by lower profits in Southeast Asia and Yonghui.  Home Furnishings was broadly in line with the same period last year.

 

In North Asia, overall sales within the Food businesses were ahead of prior year, but profits declined, mainly due to higher rental and labour costs in Hong Kong.  The Health and Beauty business in Hong Kong and Macau delivered very strong sales and profits growth, driven by a significant increase in business from higher numbers of mainland Chinese tourists.  Yonghui reported strong sales growth and underlying profits from the core food business remained strong, but total profits were behind the prior year due to the investment in new technology formats and the introduction of a new employee incentive scheme.

 

In Southeast Asia, challenging trading conditions continued for the Food businesses, with lower sales and profits in Singapore, Malaysia and Indonesia.  In the Philippines, sales were higher but profits lower.  The improving performance of the majority of the group's Health and Beauty businesses in Southeast Asia was encouraging, with Malaysia, Indonesia and Vietnam reporting better underlying results.

 

The group's convenience store operations performed well, with Hong Kong and Macau trading in line with last year, lower sales but higher profits in Singapore and continued growth in mainland China.

 

In Home Furnishings, IKEA delivered sales and profits growth in Taiwan and Indonesia, while Hong Kong reported higher sales but lower profits due to increased operating costs.  Maxim's delivered another good performance and is continuing to expand its presence across mainland China and Southeast Asia.

 

Mandarin Oriental

Mandarin Oriental delivered a good result for the period due to generally improved performances across most of the portfolio, notably in Hong Kong, Singapore, Bangkok and Tokyo.  There were also signs of recovery in Paris after several years of weak demand.  In The Americas, results from Washington D.C. and Boston were lower.  The group's underlying profit for the first half was US$22 million, compared with US$15 million in the same period of 2017. 

 

Following the fire at the London hotel, the process of repairs is underway and it is anticipated that the hotel will be able partially to reopen in the fourth quarter of this year.  The impact of the fire is being assessed by insurers with the estimate of a write off of tangible assets offset by insurance claims recoverable.  Given the coverage under the group's insurance arrangements, the impact on the Group's profitability is expected to be modest. 

 

An early termination fee was received in respect of the cessation of the management of the Las Vegas hotel from the end of August 2018 following a change in the hotel's ownership. 

 

Jardine Cycle & Carriage

Jardine Cycle & Carriage reported an underlying profit for the period of US$414 million, up 10%.  Profit attributable to shareholders was down 56% to US$174 million, after accounting for net non-trading losses of US$240 million, principally unrealised fair value losses related to non-current investments.  These result from the adoption of a new accounting standard that requires the unrealised gains or losses arising from the revaluation of equity investments at the end of each financial period to be included in the profit and loss account. 

 

Astra's contribution to underlying profit rose 12% to US$354 million.  Jardine Cycle & Carriage's Direct Motor Interests contributed an underlying profit of US$74 million, 18% above the previous year.  There were improved margins on passenger cars and increased contributions from used cars in Singapore, as well as higher contributions from Tunas Ridean in Indonesia and Truong Hai Auto Corporation in Vietnam.  Other Strategic Interests also made a stronger contribution of US$41 million, up from US$8 million in the first half of 2017, benefiting in particular from Vinamilk dividends received in the period.  In addition, there was profit growth at Siam City Cement in Thailand and at Refrigeration Electrical Engineering Corporation in Vietnam.

 

Astra

Astra reported net profit equivalent to US$750 million, under Indonesian accounting standards, up 11% in its reporting currency.  There were higher profits from the group's heavy equipment and mining businesses and an improved contribution from its financial services division, which more than offset lower contributions from its agribusiness and infrastructure operations. 

 

Net income from Astra's automotive business was flat at US$304 million, with increased earnings in the motorcycle operations and automotive components business offset by lower results in the car operations.  The wholesale market for cars in Indonesia was 4% higher in the period but the group's car sales fell by 10% as a result of increased competition, resulting in its market share falling from 56% to 48%.  The wholesale market for motorcycles increased by 11%, while Astra Honda Motor's domestic sales also rose by 11%, with its market share maintained at 74%. 

 

Net income from Astra's financial services division increased to US$155 million with an improved contribution from the group's consumer finance businesses.  Permata Bank reported a net income of US$20 million for the period, compared to US$47 million in the first half of 2017.  Its results in the first half of 2017 benefited from a one-off gain on the sale of non-performing loans.  In May 2018, Permata Bank sold its 25% shareholding in Astra Sedaya Finance to Astra in order to strengthen the bank's capital position and maximise its capital allocation for lending.  Astra Sedaya Finance is now 100%-owned by the group.  Asuransi Astra Buana, the group's general insurance company, reported net income of US$36 million, 2% lower than 2017 due to a reduction in investment income, while Astra Aviva Life continued to grow its customer base.

 

Net income from the group's heavy equipment, mining, construction and energy businesses increased by 60% to US$237 million, mainly due to improved performances in its construction machinery and mining contracting operations as a result of increased coal prices.  Within United Tractors' construction machinery business, Komatsu heavy equipment sales were up 37% at 2,400 units, while parts and service revenues were also higher.  The mining contracting operations of wholly-owned Pamapersada Nusantara recorded an 8% higher coal production at 56 million tonnes and a 23% higher overburden removal volume at 445 million bank cubic metres.  United Tractors' mining subsidiaries reported 22% higher coal sales at 4.4 million tonnes.

 

Net income from the group's agribusiness division was US$45 million, a decrease of 23% from the prior year primarily due to a fall in crude palm oil prices, which were 8% lower compared to the first half of 2017. 

 

The group's infrastructure and logistics division reported a net income of US$0.3 million, compared with a net profit of US$8 million in the first half of 2017, as initial losses on two new toll roads outweighed improved earnings from more established assets.  The group continues to develop its portfolio of toll road interests, which now total 353km, of which 269km is operational.

 

Net income from Astra's information technology business was 24% higher at US$5 million, with improved revenue across document and information technology solutions and office services businesses. 

 

The group's property division reported a net profit of US$3 million in the first half of 2018, compared to US$5 million in the prior year, reflecting lower development earnings recognised from its Anandamaya Residences project.


           




































Jardine Matheson Holdings Limited

Consolidated Profit and Loss Account




















































































































(unaudited)
























Six months ended 30th June




Year ended 31st December








2018












2017












2017














































































Underlying

business

performance

US$m

 

Non-trading

items

US$m

 

 



 

 

Total

US$m


Underlying

business

performance

US$m

restated



 

Non-trading

items

US$m

restated




 

 

Total

US$m

restated


Underlying

business

performance

US$m

restated



 

Non-trading

items

US$m

restated




 

 

Total

US$m

restated












































 

 






























Revenue (note 2)


21,327




-




21,327




18,783




-




18,783




38,748




-




38,748


Net operating costs (note 3)


(19,423)




(234)




(19,657)




(17,223)




373




(16,850)




(35,489)




553




(34,936)


Change in fair value of investment properties


-




674




674




-




2,694




2,694




-




4,706




4,706


 

 




































Operating profit


1,904




440




2,344




1,560




3,067




4,627




3,259




5,259




8,518


Net financing charges








































































- financing charges


(217)




-




(217)




(163)




-




(163)




(334)




-




(334)


- financing income


84




-




84




85




-




85




173




-




173












































































(133)




-




(133)




(78)




-




(78)




(161)




-




(161)


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








































































- before change in fair value of investment properties


533




-




533




589




15




604




1,204




 (8)




1,196


- change in fair value of investment properties


-




(1)




(1)




-




(56)




(56)




-




(32)




(32)












































































533




(1)




532




589




(41)




548




1,204




(40)




1,164






































Profit before tax


2,304




439




2,743




2,071




3,026




5,097




4,302




5,219




9,521


Tax (note 5)


(443)




(2)




(445)




(367)




(4)




(371)




(819)




(3)




(822)






































Profit after tax


1,861




437




2,298




1,704




3,022




4,726




3,483




5,216




8,699






































Attributable to:




































Shareholders of the Company

    (notes 6 & 7)


792




136




928




744




1,430




2,174




1,543




2,400




3,943


Non-controlling interests


1,069




301




1,370




960




1,592




2,552




1,940




2,816




4,756








































1,861




437




2,298




1,704




3,022




4,726




3,483




5,216




8,699








































US$








US$




US$








US$




US$








US$










































































Earnings per share (note 6)




































- basic


2.11








2.47




1.98








5.79




4.10








10.48


- diluted


2.11








2.47




1.98








5.78




4.09








10.46






































 




















 

Jardine Matheson Holdings Limited

Consolidated Statement of Comprehensive Income















 



















 



















 



(unaudited)

Six months ended

30th June




Year ended

31st

December






2018

US$m

 





2017

US$m

restated





2017

US$m

restated



 



















 



















 

Profit for the period



2,298






4,726






8,699



 

Other comprehensive income/(expense)


















 



















 



















 

Items that will not be reclassified to profit or loss:


















 



















 

Remeasurements of defined benefit plans



(1)






(2)






77



 

Net revaluation surplus before transfer to investment properties


















 

- intangible assets



2






-






6



 

- tangible assets



1






-






-



 

Reversal of fair value gain upon reclassification


















 

   of equity investments to associates



-






(67)






(67)



 

Tax on items that will not be reclassified



-






1






(8)



 



















 



















 




2






(68)






8



 

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



(2)






   10






17



 



















 




-






(58)






25



 

Items that may be reclassified subsequently to profit or loss:


















 



















 

Net exchange translation differences


















 



















 

- net (loss)/gain arising during the period



(742)






150






167



 

- transfer to profit and loss



1






-






9



 



















 



















 




(741)






150






176



 

Revaluation of other investments at fair value


















 

   through other comprehensive income


















 



















 

- net (loss)/gain arising during the period



(20)






13






22



 

- transfer to profit and loss



(4)






(5)






(3)



 



















 



















 




(24)






8






19



 

Cash flow hedges


















 



















 

- net gain/(loss) arising during the period



38






(54)






(39)



 

- transfer to profit and loss



-






7






10



 



















 



















 




38






(47)






(29)



 

Tax relating to items that may be reclassified



(14)






9






8



 

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



(356)






255






406



 



















 




(1,097)






375






580



 



















 



















 

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



(1,097)






317






605



 



















 

Total comprehensive income for the period



1,201






5,043






9,304



 



















 

Attributable to:


















 

Shareholders of the Company



501






2,337






4,370



 

Non-controlling interests



700






2,706






4,934



 



















 




1,201






5,043






9,304



 

















































 

Jardine Matheson Holdings Limited

Consolidated Balance Sheet












 













 













 




(unaudited)

At 30th June



At 31st

December


 



2018

US$m

 




2017

US$m

restated

 

 



2017

US$m restated


 













 













 

Assets












 

Intangible assets


2,873




3,245




3,009


 

Tangible assets


7,000




6,619




7,008


 

Investment properties


34,119




31,324




33,538


 

Bearer plants


475




512




498


 

Associates and joint ventures


13,144




12,008




13,061


 

Other investments


2,870




1,286




2,673


 

Non-current debtors


3,056




3,238




3,042


 

Deferred tax assets


403




405




406


 

Pension assets


13




4




14


 













 

Non-current assets


63,953




58,641




63,249


 













 

Properties for sale


3,006




1,990




2,811


 

Stocks and work in progress


3,380




3,372




3,536


 

Current debtors


7,224




6,626




6,835


 

Current investments


22




50




22


 

Current tax assets


182




165




164


 

Bank balances and other liquid funds












 













 

- non-financial services companies


5,211




5,663




5,764


 

- financial services companies


173




234




241


 













 













 



5,384




5,897




6,005


 













 



19,198




18,100




19,373


 

Assets classified as held for sale


5




3




11


 













 

Current assets


19,203




18,103




19,384


 













 













 













 













 













 













 













 













 













 













 













 













 

Total assets


83,156




76,744




82,633


 













 













 













 

Equity












 

Share capital


184




180




181


 

Share premium and capital reserves


198




181




188


 

Revenue and other reserves


30,681




27,999




30,005


 

Own shares held


(5,233)




(4,480)




(4,715)


 













 

Shareholders' funds


25,830




23,880




25,659


 

Non-controlling interests


31,842




30,142




32,109


 













 

Total equity


57,672




54,022




57,768


 













 

Liabilities












 

Long-term borrowings












 













 

- non-financial services companies


6,510




5,139




5,975


 

- financial services companies


1,652




1,510




1,487


 













 













 



8,162




6,649




7,462


 

Deferred tax liabilities


558




583




552


 

Pension liabilities


382




443




385


 

Non-current creditors


238




505




255


 

Non-current provisions


183




163




175


 













 

Non-current liabilities


9,523




8,343




8,829


 













 

Current creditors


9,870




9,072




10,165


 

Current borrowings












 













 

- non-financial services companies


3,672




2,447




3,195


 

- financial services companies


1,845




2,410




2,154


 













 













 



5,517




4,857




5,349


 

Current tax liabilities


435




344




362


 

Current provisions


139




106




154


 













 



15,961




14,379




16,030


 

Liabilities classified as held for sale


-




-




6


 













 

Current liabilities


15,961




14,379




16,036


 













 













 

Total liabilities


25,484




22,722




24,865


 













 













 

Total equity and liabilities


83,156




76,744




82,633


 
























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 2018 (unaudited)






















At 1st January 2018






















- as previously reported

181


32


156


31,312


212


(6)


(1,503)


(4,715)


25,669


32,101


57,770

- change in accounting policies (note 1)

-


-


-


11


-


-


(5)


-


6


57


63























- as restated

181


32


156


31,323


212


(6)


(1,508)


(4,715)


25,675


32,158


57,833

Total comprehensive income

-


-


-


916


1


1


 (417)


-


501


700


1,201

Dividends paid by the Company (note 8)

-


-


-


(449)


-


-


-


-


(449)


80


(369)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(651)


(651)

Issue of shares

-


4


-


-


-


-


-


-


4


-


4

Employee share option schemes

-


-


12


-


-


-


-


-


12


-


12

Scrip issued in lieu of dividends

3


(3)


-


613


-


-


-


-


613


-


613

Increase in own shares held

-


-


-


-


-


-


-


(518)


(518)


(84)


(602)

Subsidiaries acquired

-


-


-


-


-


-


-


-


-


2


2

Capital contribution from non-controlling interests

-


-


-


-


-


-


-


-


-


21


21

Change in interests in subsidiaries

-


-


-


(11)


-


-


-


-


(11)


(398)


(409)

Change in interests in associates and joint ventures

-


-


-


3


-


-


-


-


3


14


17

Transfer

-


2


(5)


3


-


-


-


-


-


-


-























At 30th June 2018

184


35


163


32,398


213


(5)


(1,925)


(5,233)


25,830


31,842


57,672























Six months ended 30th June 2017 (unaudited)






















At 1st January 2017






















- as previously reported

178


20


155


27,223


210


(32)


(1,854)


(4,100)


21,800


27,937


49,737

- change in accounting policies (note 1)

-


-


-


22


-


-


(7)


-


15


50


65























- as restated

178


20


155


27,245


210


(32)


(1,861)


(4,100)


21,815


27,987


49,802

Total comprehensive income

-


-


-


2,131


-


4


202


-


2,337


2,706


5,043

Dividends paid by the Company (note 8)

-


-


-


(420)


-


-


-


-


(420)


75


(345)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(550)


(550)

Issue of shares

-


9


-


-


-


-


-


-


9


-


9

Employee share option schemes

-


-


11


-


-


-


-


-


11


1


12

Scrip issued in lieu of dividends

2


(2)


-


552


-


-


-


-


552


-


552

Increase in own shares held

-


-


-


-


-


-


-


(380)


(380)


(75)


(455)

Subsidiaries acquired

-


-


-


-


-


-


-


-


-


7


7

Change in interests in subsidiaries

-


-


-


(15)


-


-


-


-


(15)


(9)


(24)

Change in interests in associates and joint ventures

-


-


-


(29)


-


-


-


-


(29)


-


(29)

Transfer

-


5


(17)


12


-


-


-


-


-


-


-























At 30th June 2017

180


32


149


29,476


210


(28)


(1,659)


(4,480)


23,880


30,142


54,022

























 


Jardine Matheson Holdings Limited

Consolidated Statement of Changes in Equity (continued)

























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













































Year ended 31st December 2017






















At 1st January 2017






















- as previously reported

178


20


155


27,223


210


(32)


(1,854)


(4,100)


21,800


27,937


49,737

- change in accounting policies (note 1)

-


-


-


22


-


-


(7)


-


15


50


65























- as restated

178


20


155


27,245


210


(32)


(1,861)


(4,100)


21,815


27,987


49,802

Total comprehensive income

-


-


-


3,991


2


26


351


-


4,370


4,934


9,304

Dividends paid by the Company

-


-


-


(571)


-


-


-


-


(571)


101


(470)

Dividends paid to non-controlling interests

-


-


-


-


-


-


-


-


-


(816)


(816)

Unclaimed dividends forfeited

-


-


-


1


-


-


-


-


1


1


2

Issue of shares

-


10


-


-


-


-


-


-


10


-


10

Employee share option schemes

-


-


21


-


-


-


-


-


21


-


21

Scrip issued in lieu of dividends

3


(3)


-


751


-


-


-


-


751


-


751

Increase in own shares held

-


-


-


-


-


-


-


(615)


(615)


(100)


(715)

Subsidiaries acquired

-


-


-


-


-


-


-


-


-


107


107

Subsidiaries disposed of

-


-


-


-


-


-


-


-


-


(1)


(1)

Capital repayment to non-controlling interests

-


-


-


-


-


-


-


-


-


(3)


(3)

Change in interests in subsidiaries

-


-


-


(93)


-


-


-


-


(93)


(101)


(194)

Change in interests in associates and joint ventures

-


-


-


(30)


-


-


-


-


(30)


-


(30)

Transfer

-


5


(20)


15


-


-


-


-


-


-


-























At 31st December 2017

181


32


156


31,309


212


(6)


(1,510)


(4,715)


25,659


32,109


57,768














Jardine Matheson Holdings Limited

Consolidated Cash Flow Statement






































(unaudited)

Six months ended

30th June



Year ended 31st December




2018

US$m

 

 

 



2017

US$m restated




2017

US$m restated


























Operating activities
























Operating profit


2,344




4,627




8,518


Change in fair value of investment properties


(674)




(2,694)




(4,706)


Depreciation and amortisation


533




476




981


Other non-cash items


385




(220)




(160)


(Increase)/decrease in working capital


(939)




16




(372)


Interest received


79




79




172


Interest and other financing charges paid


(215)




(172)




(323)


Tax paid


(403)




(316)




(756)
















1,110




1,796




3,354


Dividends from associates and joint ventures


447




534




944


























Cash flows from operating activities


1,557




2,330




4,298














Investing activities
























Purchase of subsidiaries (note 10(a))


(85)




(24)




(74)


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


(515)




(1,079)




(1,527)


Purchase of other investments (note 10(c))


(618)




(148)




(1,609)


Purchase of intangible assets


(52)




(95)




(172)


Purchase of tangible assets


(699)




(560)




(1,184)


Additions to investment properties


(100)




(217)




(372)


Additions to bearer plants


(20)




(19)




(50)


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


(395)




(304)




(853)


Advance and repayment from associates and joint      ventures (note10(e))


534




232




658


Sale of subsidiaries


5




14




103


Sale of associates and joint ventures


-




20




73


Redemption of convertible bonds by Zhongsheng


-




398




398


Sale of other investments (note 10(f))


138




117




369


Sale of intangible assets


12




1




2


Sale of tangible assets


18




210




221


Sale of investment properties


-




42




42


























Cash flows from investing activities


(1,777)




(1,412)




(3,975)














Financing activities
























Issue of shares


4




5




10


Capital contribution from/(repayment to) non-controlling interests


21




-




(3)


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


(409)




(9)




(179)


Purchase of own shares


(99)




-




(95)


Drawdown of borrowings


4,049




3,162




7,601


Repayment of borrowings


(2,950)




(3,032)




(6,112)


Dividends paid by the Company


(258)




(248)




(338)


Dividends paid to non-controlling interests


(643)




(555)




(824)


























Cash flows from financing activities


(285)




(677)




60














Net (decrease)/increase in cash and cash equivalents


(505)




241




383


Cash and cash equivalents at beginning of period


6,001




5,531




5,531


Effect of exchange rate changes


(150)




68




87














Cash and cash equivalents at end of period


5,346




5,840




6,001



























Jardine Matheson Holdings Limited

Analysis of Profit Contribution






































(unaudited)

Six months ended

30th June



Year ended 31st December




2018

US$m 

 




2017

US$m restated

 

 



2017

US$m restated


























Reportable segments












Jardine Pacific


63




67




162


Jardine Motors


87




83




184


Jardine Lloyd Thompson


35




36




67


Hongkong Land


192




196




396


Dairy Farm


140




137




261


Mandarin Oriental


15




10




35


Jardine Cycle & Carriage


53




38




82


Astra


223




198




391
















808




765




1,578


Corporate and other interests


(16)




(21)




(35)














Underlying profit attributable to shareholders*


792




744




1,543


Increase in fair value of investment properties


289




1,097




1,949


Other non-trading items


(153)




333




451














Profit attributable to shareholders


928




2,174




3,943














Analysis of Jardine Pacific's contribution












Jardine Schindler


22




22




45


JEC


6




6




30


Gammon


15




16




31


Jardine Restaurants


11




16




24


Transport Services


10




11




25


JTH


(2)




-




7


Corporate and other interests


1




(4)




-
















63




67




162














Analysis of Jardine Motors' contribution












Hong Kong and mainland China


80




76




171


United Kingdom


8




8




15


Corporate


(1)




(1)




(2)
















87




83




184


 

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.

 

There are no changes to the accounting policies as described in the 2017 annual financial statements except for the adoption of IFRS 9 'Financial Instruments' and IFRS 15 'Revenue from Contracts with Customers' from 1st January 2018 as set out below.

 

The other amendments, which are effective in 2018 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 standard, interpretation or amendment that have been issued but not yet effective.

 

IFRS 9 'Financial Instruments'

 

Under IFRS 9, the gains and losses arising from changes in fair value of the Group's investments in equity securities, previously classified as available-for-sale, will be recognised in profit and loss, instead of through other comprehensive income.  Such fair value gains or losses on revaluation of these investments are classified as non-trading items, and do not have any impact on the Group's underlying profit attributable to shareholders and shareholders' funds.  The new forward-looking expected credit loss model, which replaces the incurred loss impairment model, mainly affects the loan impairment provisions of the Group's financial services companies in Indonesia.  The new hedge accounting rules, which align the accounting for hedging instruments closely with the Group's risk management practices, has no significant impact to the Group.

 

IFRS 15 'Revenue from Contracts with Customers'

 

IFRS 15 establishes a comprehensive framework for the recognition of revenue.  It replaces IAS 11 'Construction Contracts' and IAS 18 'Revenue' which covers contracts for goods and services.  The core principle in the framework is that revenue is recognised when control of a good or service transfers to a customer.  The new standard mainly changes the Group's revenue recognition on certain property sales, from completion method to percentage of completion method.  This will lead to earlier recognition of revenue when compared to the current completion method. 

 

Changes to accounting policies on adoption of IFRS 9 and 15 have been applied retrospectively and the comparative financial statements have been restated. 

 

 

 

The effects of adopting IFRS 9 and IFRS 15

 

(a)     On the consolidated profit and loss account for the six months ended 30th June 2017:

 

























Increase/(decrease) in


 








profit upon adopting


 


















 






IFRS 9

US$m




IFRS 15

US$m

 

 

 


















 


















 


Revenue




-




(647)


 


Net operating costs




151




589


 


Share of results of associates and joint ventures




6




(1)


 


Tax




-




10


 












 


Profit after tax




157




(49)


 












 


Attributable to:










 


Shareholders of the Company*




117




(21)


 


Non-controlling interests




40




(28)


 












 






157




(49)


 












 

*

Further analysed as:










 


Underlying profit attributable to shareholders




-




(21)


 


Non-trading items




117




-


 












 


Profit attributable to shareholders




117




(21)


 












 












 


Basic underlying earnings per share (US$)




-




(0.06)


 












 












 


Diluted underlying earnings per share (US$)




-




(0.05)


 












 












 


Basic earnings per share (US$)




0.31




(0.06)


 












 












 


Diluted earnings per share (US$)




0.30




(0.05)


 












 












 

 

 

(b)     On the consolidated statement of comprehensive income for the six months ended 30th June 2017:

 







Increase/(decrease) in

total comprehensive

income upon adopting









IFRS 9

US$m







IFRS 15

US$m
























 























 


Profit for the period





157







(49)



 


Other comprehensive income















 

















 


Items that may be reclassified subsequently to profit or loss:















 


Net exchange translation differences















 


- net gain arising during the period





-







2



 

















 


Revaluation of other investments at fair value through other comprehensive income















 


- net gain arising during the period





(151)







-



 

















 


Share of other comprehensive income of associates and joint ventures





(6)







(1)



 

















 

















 

















 

















 


Other comprehensive income for the period, net of tax





(157)







1



 

















 


Total comprehensive income for the period





-







(48)



 

















 


Attributable to:















 


Shareholders of the Company





-







(21)



 


Non-controlling interests





-







(27)



 

















 







-







(48)



 

 

 

(c)     On the consolidated balance sheet at 1st January

 



Increase/(decrease) upon adopting



IFRS 9


IFRS 15


Total



2018 US$m


2017 US$m


2018 US$m


2017

US$m 


2018 US$m


2017

US$m




























Assets













Associates and joint ventures

(22)


-


2


4


(20)


4


Other investments

58


-


-


-


58


-


Deferred tax assets

-


-


2


1


2


1















Properties for sale

-


-


(136)


(328)


(136)


(328)


Stocks and work in progress

-


-


66


30


66


30


Current debtors

(7)


-


(79)


(54)


(86)