UPDATE: Jardine Matheson 2011 Profit Up 12%; Expect More Fragility In Some Markets

HONG KONG (Dow Jones)--Conglomerate Jardine Matheson Holdings Ltd. (JAR.LN), one of Asia's oldest trading companies, said Friday its net profit rose 12% last year but that growth would be more challenging in some of its markets in 2012 because of the uncertainties in the global economy.

The firm, whose businesses range from hotels and property to supermarkets, posted a net profit of US$3.45 billion for the 12 months ended Dec. 31, up from US$3.08 billion the previous year.

"There may be increasing fragility in some of the group's markets in the year ahead as the present uncertain economic conditions show little sign of improvement," Chairman Sir Henry Keswick said in a statement.

Managing Director Anthony Nightingale said the group plans to have substantial commitments in the real-estate sector in China.

"We are still at the early stage of residential development in China. In other words, there's a lot more to come," Nightingale, who will step down in April as managing director, told reporters Friday. Having joined Jardine in 1969, Nightingale will retire from the position of managing director in April and be succeeded by Ben Keswick, a nephew of the Jardine chairman.

Hongkong Land Holdings Ltd. (H78.SG), Jardine's property unit, has residential projects in Beijing, Chongqing, Chengdu and Shenyang, and acquired several development sites including a commercial site in Wangfujing, Beijing last year. It is the largest commercial landlord in Hong Kong's upmarket Central business district and also has properties in Singapore.

Nightingale said the group is looking to broaden its property portfolio to one or two new Southeast Asian markets.

The Singapore- and London-listed company, which generates most of its earnings in Greater China and Southeast Asia, posted an underlying profit of US$1.50 billion for 2011, up 10% from US$1.36 billion in 2010.

Analysts prefer to look at underlying profit because net profit can be distorted by revaluation gains or losses, which don't affect cash flow.

The Hong Kong-based conglomerate derived 57% of its 2011 underlying profit from Southeast Asia and about 40% from Greater China.

Nightingale said Southeast Asia's share of the group's underlying profit was bigger than that of Greater China for the second consecutive year, largely due to the strong performance of its Indonesian automobile unit, Astra International (ASII.JK).

Astra contributed US$561 million to Jardine's underlying profit in 2011, up from US$437 million in the previous year.

Hongkong Land, which posted its results Thursday, accounted for US$289 million of the group's underlying profit, down from US$332 million in the previous year, as fewer residential projects were completed. Dairy Farm International contributed US$301 million, up from US$259 million the previous year.

-By Polly Hui, Dow Jones Newswires; 852-2802-7002; [e-mail]