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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Jardine Strategic Holdings Ld | LSE:88EI | London | Ordinary Share | BMG507641022 | ORD US$0.05(JERSEY REG) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMJDS TIDMJAR
RNS Number : 6035H
Jardine Strategic Hldgs Ltd
02 August 2019
To: Business Editor 2nd August 2019
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 Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2019
Highlights
-- Underlying profit down 1% -- US$0.9 billion gain on JLT sale -- Lower contribution from Astra -- Jardine Motors, Hongkong Land and Dairy Farm deliver profit growth
"The Group's profit decreased by 1% in the first half. While most businesses delivered resilient performances, the car market in Indonesia was weaker. In the second half of the year we expect to benefit from further growth in Hongkong Land and Dairy Farm, but the Group's overall results will depend to a large extent on consumer sentiment in our key markets."
Ben Keswick, Chairman and Managing Director
Results
Hot Features
Premium
(unaudited)
Six months
ended 30th
June
2019 2018 Change
US$m US$m %
Restated
Gross revenue including 100% of
Jardine Matheson, associates and
joint ventures 50,274 44,348 +13
Revenue 15,999 16,939 -6
Underlying profit* attributable
to shareholders 779 789 -1
Profit attributable to shareholders 1,657 945 +75
-------------------------------------------------------------------------------- ------------------------ --------- ------
US$ US$ %
------------------------ --------- ------
Underlying earnings per share* 1.38 1.38 -
Earnings per share 2.93 1.66 +77
Net asset value per share(#) 61.10 68.46 -11
------------------------ --------- ------
USc USc %
------------------------ --------- ------
Interim dividend per share 10.50 10.00 +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
9 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 2019 and 31st December 2018, respectively.
Net asset value per share is calculated on a market value
basis, details of which are set out in note 15 to the
condensed financial statements.
The accounts have been restated due to changes in accounting
policies upon adoption of IFRS 16 'Leases', as set out
in note 1 to the condensed financial statements.
The interim dividend of USc10.50 per share will be payable on 17th October 2019 to shareholders on the register of members at the close of business on 23rd August 2019 and will be available in cash with a scrip alternative.
Jardine Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2019
Overview
The Group's profit in the first half was impacted by a slow start to the year by Astra, while Hongkong Land and Dairy Farm both saw increases in profit. The Group faced challenging conditions in the period, primarily caused by weaker consumer sentiment in Indonesia.
Results
The Group's underlying profit for the first six months of 2019 was US$779 million, US$10 million or 1% below the corresponding period last year, and underlying earnings per share were flat at US$1.38. The revenue of the Group for the period was 6% lower at US$16 billion, while revenue, including 100% of Jardine Matheson, associates and joint ventures, was up 13% at US$50.3 billion.
Within Jardine Matheson's directly-held businesses, there was a loss of earnings from Jardine Lloyd Thompson with the sale of its stake completed in April 2019. Jardine Pacific saw lower overall results, mainly due to the timing of project completions in Gammon. There was a stronger contribution from JEC and steady performances in Jardine Schindler and Jardine Restaurants, but lower results from Hactl. Jardine Motors saw its earnings increase overall, benefitting from a higher contribution from its investment in Zhongsheng and an improved result from Zung Fu in mainland China, partially offset by lower earnings at Zung Fu in Hong Kong.
Hongkong Land's profits rose modestly, as its results benefitted from increased contributions from both Investment Properties and Development Properties, partially offset by higher financing costs due to land acquisitions. There were continued positive rental reversions in the Hong Kong office portfolio and the Hong Kong retail portfolio remained effectively fully occupied, while the profit contribution from development properties in mainland China increased in the first half of the year compared with the equivalent period last year.
Dairy Farm saw a strong performance from its Health and Beauty business and solid sales performances from Convenience, Home Furnishings and Restaurants. The group's underlying profit benefitted from higher contributions from Yonghui and Robinsons Retail, partially offset by continuing business transformation costs. The Food business continued to face challenges, but is beginning to see signs of growth in underlying sales performance in Southeast Asia as the transformation plan is implemented.
At Mandarin Oriental, underlying profit was lower during the first half of the year, primarily due to the closure of The Excelsior in Hong Kong and reduced earnings from the Bangkok hotel, which was largely closed in March 2019 for a major renovation. Overall results across the rest of the group's properties were broadly flat.
In Southeast Asia, JC&C saw lower contribution from Truong Hai Auto Corporation in Vietnam. Astra's performance was weaker in the period, with lower contributions from its automotive business and agribusiness, offsetting improved performances from its financial services and heavy equipment, mining, construction and energy businesses.
There was a non-trading net gain in the first half of US$878 million, compared with a non-trading net gain of US$156 million in the first half of 2018. The sale of the Group's interest in Jardine Lloyd Thompson produced a net gain of US$874 million. There was also a net gain of US$52 million related to the fair value of other investments, offset by a net non-trading loss of US$44 million from revaluations of investment properties in Hongkong Land. The Group's profit attributable to shareholders for the period was US$1,657 million, compared with US$945 million in 2018. The Board has declared an increased interim dividend of USc10.50 per share, 5% higher than last year.
Business Developments
The offer for Jardine Lloyd Thompson by Marsh & McLennan completed on 1st April 2019 and the Group received net proceeds of US$2.1 billion for the sale of its stake. As a result of the sale, the Group did not recognise any profit from JLT in the first half of 2019, compared with a profit contribution of U$20 million in the same period in 2018.
WF CENTRAL in Beijing is performing in line with expectations and its hotel, Mandarin Oriental Wangfujing, opened in March 2019. Planning of the prime commercial joint venture project in the central business district of Bangkok is well underway, with construction expected to commence in early 2020 and completion scheduled for 2025. During the period, the group acquired a residential site in southwestern Wuhan. The joint venture projects in the rest of Southeast Asia are progressing on schedule.
Dairy Farm is implementing a range of initiatives as part of its multi-year transformation programme aimed at improving business performance and achieving long-term sustainable growth. Work is underway to transform one of the group's Giant hypermarkets in Indonesia into an IKEA store as a pilot scheme for the repurposing of Food space. Maxim's acquired the Starbucks franchise in Thailand, adding 372 stores in Thailand to its existing stores in Singapore and Hong Kong.
Mandarin Oriental closed The Excelsior, Hong Kong, at the end of March and demolition work is underway ahead of the planned construction of a mixed-use commercial building. The group opened four new hotels in the first half of the year, in Beijing, Doha, Dubai and Lake Como. In addition, the group signed two new management contracts, for a second hotel and residences in Istanbul and new standalone residences in New York.
In Astra, a 44.5% interest was acquired in the Surabaya-Mojokerto toll road for US$110 million, further strengthening Astra's portfolio in the Trans Java network.
People
Charles Allen-Jones stepped down from the Board on 9th May 2019. We would like to express our gratitude for the significant contribution he made to the Group over many years. We are pleased to welcome Lincoln Leong, who joined the Board on 2nd August 2019.
Outlook
The Group's profit decreased by 1% in the first half. While most businesses delivered resilient performances, the car market in Indonesia was weaker. In the second half of the year we expect to benefit from further growth in Hongkong Land and Dairy Farm, but the Group's overall results will depend to a large extent on consumer sentiment in our key markets.
Ben Keswick
Chairman and Managing Director
Operating Review
Jardine Pacific
Jardine Pacific reported an underlying net profit of US$56 million, compared with US$62 million in the equivalent period in 2018. Improvements in business efficiency at JEC resulted in profit growth with its Hong Kong operations performing well, while Jardine Schindler and Jardine Restaurants each produced a steady contribution. Gammon's earnings were, however, down due to the timing of project completions, although its order book remains strong at over US$4 billion. Hactl's results were impacted by a reduction in cargo throughput, slightly better than the market. Greatview saw a softer sales performance in its China business.
Jardine Motors
Jardine Motors saw its underlying net profit for the first half increase by 23% to US$107 million. There was a higher contribution from Zhongsheng as a result of the inclusion of a full six months' profit, for the period from July to December 2018, due to the timing of the reporting of its results. In 2018 only two months of results were included. Zung Fu in mainland China reported a higher contribution, with a good performance from its after-sales business. In Hong Kong, however, profits were lower as a result of the timing of new car deliveries following delays in obtaining vehicle certifications, as well as weaker consumer sentiment. The United Kingdom business saw improved profit due to higher margins and growth in aftersales, but profit was lower than the corresponding period in 2018 due to the profit received last year on the sale of dealership land.
Hongkong Land
Hongkong Land's underlying profit attributable to shareholders for the first six months was US$466 million, up 2% from the equivalent period in 2018. Profit attributable to shareholders was US$411 million after accounting for a net loss of US$55 million arising primarily on the revaluation of investment properties. This compares with a profit of US$1,124 million in the first half of 2018, which included a net revaluation gain of US$669 million.
Hongkong Land's investment properties benefitted from the continuing tight supply in the Hong Kong Central office leasing market. While vacancy in the group's Central office portfolio was 2.8% at the end of June 2019, it would have been 1.6% taking account of new lease commitments. At the end of 2018, office vacancy was 1.4%. The retail portfolio remained effectively fully occupied. In Singapore, there were positive rental reversions and vacancy in the group's office portfolio was 3.3% at the end of June 2019, although it would have been 0.9% taking account of new lease commitments. Vacancy was 2.5% at the end of 2018.
In mainland China, the profit contribution from development properties in the first half of 2019 was higher than the equivalent period in 2018, as a result of more sales completions. At 30th June 2019 the group had US$1,714 million in sold but unrecognised contracted sales, compared with US$1,358 million at the end of 2018. Both sales completions and contracted sales are in line with expectations and are expected to be stronger in the second half of the year.
The profit contribution from the Singapore business was lower than the prior year. In 2018 profits were recognised on completion of the 1,327-unit Sol Acres executive condominium development. Pre-sales are progressing satisfactorily at the Margaret Ville and Parc Esta projects, the construction of both of which is scheduled to complete by 2021. The group's joint venture projects in the rest of Southeast Asia are progressing on schedule.
Dairy Farm
Dairy Farm saw sales of US$5.8 billion for the period by the group's subsidiaries, 3% lower than the prior year, or 1% lower at constant rates of exchange. Underlying profit, restated following the adoption of the new lease accounting standard, IFRS16, was US$177 million, 5% higher than the same period last year, benefitting from improved profit margins from Yonghui, the deconsolidation of its associate business Yunchuang and the additional profit contribution from the group's investment in the Robinsons Retail business in the Philippines. Costs associated with the group's business transformation programme impacted overall profit growth, with continued investment in key areas including people capability, IT infrastructure and digital development, in order to support future business development.
In the Food business, sales in supermarkets and hypermarkets were lower due to the de-consolidation of Rustan Supercenters following its sale at the end of 2018. The implementation of a regional store optimisation plan as part of the transformation of the business also impacted sales in Southeast Asia. Underlying sales performance has begun to show signs of growth, reflecting improvements in quality, availability, price competitiveness and general operating standards, notably in Southeast Asia. In North Asia, sales in Hong Kong continue to grow, particularly in upscale stores, but Taiwan is increasingly under threat from the aggressive space expansion of local competitors.
Sales in all of the group's other formats continued to show positive growth in the first half. The Group's Convenience store operations achieved higher sales in all markets, with the strongest growth coming from stores in mainland China. Overall profits were slightly lower as improved profits in Hong Kong and Macau were exceeded by investment in further store space growth in the period.
In Health and Beauty, strong sales were reported in North Asia, against substantial sales growth in the same period last year, reinforcing the strength and resilience of the Mannings brand. Guardian in Southeast Asia also reported an encouraging performance.
IKEA achieved sales growth in all markets, but profitability was lower due to the increased cost of goods and pre-opening expenses for new stores under development in Taiwan and Indonesia. E-commerce activities are growing, with positive results in all markets. In May, IKEA opened its sixth store in Taiwan in Greater Taipei City, with encouraging initial results.
Maxim's delivered good performances across all key businesses, especially restaurants, where customers have shown strong engagement with new franchises.
Yonghui reported strong underlying sales and profit growth, mainly driven by the continuing expansion of its store network and healthy like-for-like sales growth, while also benefitting from the partial divestment of Yunchuang, its new technology format, at the end of 2018.
Robinsons Retail reported good sales growth.
Mandarin Oriental
Mandarin Oriental's underlying profit for the first half of the year was US$10.7 million, compared with US$22.2 million in the equivalent period in 2018. The lower profit was primarily due to the closure of The Excelsior, Hong Kong and reduced earnings from the Bangkok hotel, which was largely closed in March 2019 for a major renovation.
Performances were mixed across the group's owned properties. In Asia, a slow-down in corporate business reduced earnings at the group's flagship Hong Kong hotel. Results in Tokyo were notably better, while in the rest of the region performances were broadly flat.
In Europe, earnings were higher at the London hotel, which continued to include insurance coverage for loss of profits due to the fire in June 2018. In the same period last year, the hotel was only partially open whilst undergoing a renovation programme. In Paris, results were lower as city-wide demand was impacted by demonstrations in the city. In America, Boston performed well but results were weaker in Washington D.C.
Jardine Cycle & Carriage
Jardine Cycle & Carriage reported an underlying profit for the period of US$407 million, down 1% compared with the equivalent period last year. Profit attributable to shareholders increased by 147% to US$427 million, after accounting for net non-trading gains of US$20 million, which were principally unrealised fair value gains related to non-current investments.
Astra's contribution to underlying profit fell 8% to US$326 million. The group's Direct Motor Interests contributed an underlying profit of US$55 million, 22% below the previous year. This was primarily due to a lower contribution from Truong Hai Auto Corporation in Vietnam due to pressure from competitors. There was an increase in overall vehicle sales in Cycle & Carriage Singapore but these were partly offset by lower margins. There was a higher contribution from Tunas Ridean in Indonesia. The results from Other Strategic Interests were broadly in line with the previous year. There were lower contributions from Siam City Cement in Thailand and Refrigeration Electrical Engineering Corporation in Vietnam, while Vinamilk produced dividend income of US$28 million in the period, compared to US$24 million in the previous year.
Astra
Astra reported net profit equivalent to US$691 million, under Indonesian accounting standards, 6% lower in its reporting currency, primarily due to lower contributions from its automotive business and agribusiness. This more than offset increased contributions from the financial services and heavy equipment, mining, construction and energy businesses.
Net income from Astra's automotive business fell by 18% to US$244 million, with 6% lower car sales and increased manufacturing costs. The overall wholesale car market declined by 13%. Astra's market share increased from 48% to 53%, and 8 new models and 2 revamped models were launched. Astra's Honda motorcycle sales were 8% higher, as the wholesale motorcycle market grew by 7% in the first half of 2019. Astra's market share continued to be strong at 75%. 4 new models and 15 revamped models were launched. Components business Astra Otoparts reported a 19% increase in net income at US$17 million, mainly due to higher revenue from the replacement market and export segments.
Net income from Astra's financial services division grew by 32% to US$199 million, mainly due to the recovery of non-performing loans, lower loan loss provisions and a larger loan portfolio. Consumer finance businesses saw a 6% increase in the amount financed. The net income contribution from car-focused finance companies increased by 39% to US$50 million, with lower non-performing loan losses, while the net income contribution from motorcycle-focused financing business increased by 10% to US$89 million, due to a larger loan portfolio. Heavy equipment-focused finance operations saw a slight decrease in the amounts financed: the contribution to net income grew 32% to US$4 million, with lower loan provisions. Permata Bank reported a significant increase in net income to US$50 million, mainly due to a higher level of recoveries from non-performing loans. General insurance company, Asuransi Astra Buana, reported net income growth of 9% at US$38 million, due to increased investment income.
Net income from Astra's Heavy Equipment, Mining, Construction and Energy increased by 2% to US$235 million, mainly due to the contribution from the new gold mining operation acquired in December 2018 and improved performance from mining contracting, partly offset by weaker heavy equipment sales. United Tractors reported a 2% increase in net income to US$393 million. Komatsu heavy equipment sales decreased by 20%, while parts and service revenues were stable. Mining contracting operations saw a 5% higher overburden removal volume and a 7% higher coal production. Coal mining subsidiaries achieved 11% higher coal sales, including 674,000 tonnes of coking coal sales. Agincourt Resources reported gold sales of 194,000 oz. General contractor Acset Indonusa reported a US$28 million net loss, compared to a net income of US$5 million in the equivalent period last year, due to increased project and funding costs of several ongoing contracts.
Net income from Astra's Agribusiness division fell by 94% to US$2 million, mainly due to lower crude palm oil prices which offset higher crude palm oil and derivatives sales. Average crude palm oil prices fell by 18% in the first half of the year compared to equivalent period in 2018. Crude palm oil and derivatives sales increased by 19% to 1.2 million tonnes.
Net income from Astra's Infrastructure & Logistics division increased from a small profit in the first half of 2018 to US$6 million, due to improved earnings from operational toll roads with increased traffic volume. Serasi Autoraya's net income decreased by 20% to US$6 million, due to a fall in the number of vehicles under leasing contract and lower used car sales.
Net income from Astra's Information Technology division fell by 35% to US$3 million, due to reduced revenue in IT solutions and office service businesses and higher operating costs.
Net income from Astra's Property division was 33% lower at US$2 million, mainly due to reduced development earnings from Anandamaya Residences following the completion of construction in 2018.
Jardine Strategic Holdings
Limited
Consolidated Profit and Loss
Account
(unaudited)
Six months ended 30th June Year ended 31st December
2019 2018 2018
Underlying Underlying
Underlying business Non-trading business Non-trading
business Non-trading performance items Total performance items Total
performance items Total US$m US$m US$m US$m US$m US$m
US$m US$m US$m restated restated restated restated restated restated
Revenue (note 2) 15,999 - 15,999 16,939 - 16,939 34,094 - 34,094
Net operating costs
(note 3) (14,281) 47 (14,234) (15,137) (234) (15,371) (30,312) (808) (31,120)
Change in fair value
of investment properties - (65) (65) - 665 665 - 1,236 1,236
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
Operating profit 1,718 (18) 1,700 1,802 431 2,233 3,782 428 4,210
Net financing charges
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
- financing charges (376) - (376) (283) - (283) (627) - (627)
- financing income 104 - 104 79 - 79 172 - 172
(272) - (272) (204) - (204) (455) - (455)
Share of results of
Jardine Matheson
(note 4) 91 880 971 108 4 112 225 (17) 208
Share of results of
associates and joint
ventures (note 5)
* before change in fair value of investment properties 502 2 504 436 1 437 1,063 1 1,064
* change in fair value of investment properties - (10) (10) - (1) (1) - 189 189
502 (8) 494 436 - 436 1,063 190 1,253
Profit before tax 2,039 854 2,893 2,142 435 2,577 4,615 601 5,216
Tax (note 6) (378) (2) (380) (411) (2) (413) (917) 11 (906)
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
Profit after tax 1,661 852 2,513 1,731 433 2,164 3,698 612 4,310
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
Attributable to:
Shareholders of the
Company (notes 7 &
9) 779 878 1,657 789 156 945 1,715 95 1,810
Non-controlling interests 882 (26) 856 942 277 1,219 1,983 517 2,500
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
1,661 852 2,513 1,731 433 2,164 3,698 612 4,310
-------- ----------- -------- ----------- ------------ --------- -------- ------------ ---------
US$ US$ US$ US$ US$ US$
Earnings per share
(note 8)
- basic 1.38 2.93 1.38 1.66 3.01 3.18
- diluted 1.38 2.93 1.38 1.66 3.01 3.18
-------- -------- ----------- --------- -------- ---------
Jardine Strategic Holdings Limited
Consolidated Statement of Comprehensive
Income
(unaudited) Year ended
Six months ended 31st
30th June December
2018 2018
2019 US$m US$m
US$m restated restated
Profit for the period 2,513 2,164 4,310
Other comprehensive
income/(expense)
Items that will not be
reclassified
to profit or loss:
---------
Remeasurements of defined
benefit
plans (1) (1) (4)
Net revaluation surplus
before transfer
to investment properties
- right-of-use assets 2,943 2 2
- tangible assets - 1 1
2,942 2 (1)
Share of other comprehensive
expense
of Jardine Matheson - (2) (19)
Share of other comprehensive
income
of associates and joint
ventures - 1 5
----------------- --------- ----------
2,942 1 (15)
Items that may be
reclassified subsequently
to profit or loss:
Net exchange translation
differences
----------------- --------- ----------
- net gain/(loss) arising
during
the period 256 (713) (775)
- transfer to profit and
loss - 1 45
256 (712) (730)
Revaluation of other
investments
at fair value through
other comprehensive
income
- net gain/(loss) arising
during
the period 14 (20) (22)
- transfer to profit and
loss - (4) (3)
14 (24) (25)
Cash flow hedges
----------------- --------- ----------
- net (loss)/gain arising
during
the period (52) 38 31
- transfer to profit and
loss (4) - -
(56) 38 31
Tax relating to items that
may be
reclassified 18 (14) (13)
Share of other comprehensive
income/(expense)
of Jardine Matheson 67 (25) (48)
Share of other comprehensive
income/(expense)
of associates and joint
ventures 143 (333) (489)
----------------- --------- ----------
442 (1,070) (1,274)
Other comprehensive
income/(expense)
for the period, net of tax 3,384 (1,069) (1,289)
----------------- --------- ----------
Total comprehensive income
for the
period 5,897 1,095 3,021
----------------- --------- ----------
Attributable to:
Shareholders of the Company 4,209 473 1,199
Non-controlling interests 1,688 622 1,822
----------------- --------- ----------
5,897 1,095 3,021
-------------------------- ----------------- --------- ----------
Jardine Strategic Holdings
Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2018
2019 US$m 2018
US$m restated US$m restated
Assets
Intangible assets 2,616 2,006 2,494
Tangible assets 6,727 5,780 6,547
Right-of-use assets 4,591 4,987 4,807
Investment properties 37,557 33,671 34,299
Bearer plants 499 475 487
Investment in Jardine
Matheson 3,669 3,305 3,188
Associates and joint
ventures 14,781 12,279 13,736
Other investments 2,752 2,826 2,543
Non-current debtors 3,134 3,019 3,047
Deferred tax assets 388 367 347
Pension assets - 5 -
------- ---------------------- ------------------
Non-current assets 76,714 68,720 71,495
------- ---------------------- ------------------
Properties for sale 2,424 3,006 2,339
Stocks and work in progress 2,854 2,555 2,960
Current debtors 7,372 6,322 6,914
Current investments 37 22 50
Current tax assets 207 180 185
Bank balances and other
liquid
funds
--- ------- ---------------------- ------------------
- non-financial services
companies 4,552 4,667 4,403
- financial services
companies 241 173 187
4,793 4,840 4,590
------- ---------------------- ------------------
17,687 16,925 17,038
Assets classified as held
for sale - 5 -
------- ---------------------- ------------------
Current assets 17,687 16,930 17,038
------- ---------------------- ------------------
Total assets 94,401 85,650 88,533
------- ---------------------- ------------------
Equity
Share capital 56 56 56
Share premium and capital
reserves 941 1,015 1,025
Revenue and other reserves 36,394 31,562 32,256
Own shares held (2,278) (2,080) (2,139)
-------- -------- --------
Shareholders' funds 35,113 30,553 31,198
Non-controlling interests 29,376 27,376 28,332
-------- -------- --------
Total equity 64,489 57,929 59,530
-------- -------- --------
Liabilities
Long-term borrowings
--- -------- -------- ------------- -------- ---------
- non-financial services
companies 6,992 6,458 5,291
- financial services companies 1,803 1,652 1,655
8,795 8,110 6,946
Non-current lease liabilities 3,125 3,368 3,251
Deferred tax liabilities 698 487 728
Pension liabilities 327 296 304
Non-current creditors 349 233 339
Non-current provisions 272 257 286
-------- -------- --------
Non-current liabilities 13,566 12,751 11,854
-------- -------- --------
Current creditors 8,953 8,355 8,862
Current borrowings
--- -------- -------- ------------- -------- ---------
- non-financial services
companies 4,205 3,466 5,083
- financial services companies 1,820 1,845 1,824
6,025 5,311 6,907
Current lease liabilities 824 753 772
Current tax liabilities 358 413 431
Current provisions 186 138 177
-------- -------- --------
Current liabilities 16,346 14,970 17,149
Total liabilities 29,912 27,721 29,003
-------- -------- --------
Total equity and liabilities 94,401 85,650 88,533
-------- -------- --------
Jardine Strategic Holdings Limited
Consolidated Statement of Changes in Equity
Attributable
Asset Own to shareholders Attributable
Share Share Capital Revenue Contributed revaluation Hedging Exchange shares of the to non-controlling Total
capital premium reserves reserves surplus reserves reserves reserves held Company interests equity
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
Six months ended
30th June 2019
(unaudited)
At 1st January
2019
- as previously
reported 56 816 209 34,291 304 264 (13) (2,267) (2,139) 31,521 28,428 59,949
- change in
accounting
policies
(note 1) - - - (329) - - - 6 - (323) (96) (419)
- as restated 56 816 209 33,962 304 264 (13) (2,261) (2,139) 31,198 28,332 59,530
Total
comprehensive
income - - - 1,658 - 2,302 (10) 259 - 4,209 1,688 5,897
Dividends paid
by the Company
(note 10) - - - (136) - - - - - (136) - (136)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (654) (654)
Employee share
option schemes - - 2 - - - - - - 2 - 2
Scrip issued in
lieu of
dividends - - - 5 - - - - - 5 - 5
Increase in own
shares held - - - - - - - - (139) (139) - (139)
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 15 15
Change in
interests in
subsidiaries - - - (8) - - - - - (8) - (8)
Change in
interests in
associates
and joint
ventures - - - (18) - - - - - (18) (5) (23)
Transfer - - (86) 86 - - - - - - - -
At 30th June
2019 56 816 125 35,549 304 2,566 (23) (2,002) (2,278) 35,113 29,376 64,489
------- ------- -------- --------- ------------- ------------ -------- -------- ------- ------------------ --------------------- --------
Six months ended
30th June 2018
(unaudited)
At 1st January
2018
- as previously
reported 56 816 195 32,635 304 264 (7) (1,690) (2,000) 30,573 27,722 58,295
- change in
accounting
policies
(note 1) - - - (303) - - - - - (303) (88) (391)
- as restated 56 816 195 32,332 304 264 (7) (1,690) (2,000) 30,270 27,634 57,904
Total
comprehensive
income - - - 932 - 1 5 (465) - 473 622 1,095
Dividends paid
by the Company
(note 10) - - - (128) - - - - - (128) - (128)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (607) (607)
Employee share
option schemes - - 8 - - - - - - 8 - 8
Scrip issued in
lieu of
dividends - - - 5 - - - - - 5 - 5
Increase in own
shares held - - - - - - - - (80) (80) - (80)
Subsidiaries
acquired - - - - - - - - - - 2 2
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 21 21
Change in
interests in
subsidiaries - - - 3 - - - - - 3 (311) (308)
Change in
interests in
associates
and joint
ventures - - - 2 - - - - - 2 15 17
Transfer - - (4) 4 - - - - - - - -
At 30th June
2018 56 816 199 33,150 304 265 (2) (2,155) (2,080) 30,553 27,376 57,929
------- ------- -------- --------- ------------- ------------ -------- -------- ------- ------------------ --------------------- --------
Year ended 31st
December 2018
At 1st January
2018
- as previously
reported 56 816 195 32,635 304 264 (7) (1,690) (2,000) 30,573 27,722 58,295
- change in
accounting
policies
(note 1) - - - (303) - - - - - (303) (88) (391)
- as restated 56 816 195 32,332 304 264 (7) (1,690) (2,000) 30,270 27,634 57,904
Total
comprehensive
income - - - 1,776 - - (6) (571) - 1,199 1,822 3,021
Dividends paid
by the Company - - - (185) - - - - - (185) - (185)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (844) (844)
Unclaimed
dividends
forfeited - - - 1 - - - - - 1 - 1
Employee share
option schemes - - 19 - - - - - - 19 - 19
Scrip issued in
lieu of
dividends - - - 9 - - - - - 9 - 9
Increase in own
shares held - - - - - - - - (139) (139) - (139)
Subsidiaries
acquired - - - - - - - - - - 57 57
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 22 22
Change in
interests in
subsidiaries - - - 18 - - - - - 18 (378) (360)
Change in
interests in
associates
and joint
ventures - - - 6 - - - - - 6 19 25
Transfer - - (5) 5 - - - - - - - -
------- -------- --------- ---------- --- --- --------- --------- -------- -------- -------- -------
At 31st December
2018 56 816 209 33,962 304 264 (13) (2,261) (2,139) 31,198 28,332 59,530
------- -------- --------- ---------- --- --- --------- --------- -------- -------- -------- -------
Jardine Strategic Holdings Limited
Consolidated Cash Flow Statement
(unaudited)
Six months ended Year ended
30th June 31st December
2019 2018 2018
US$m US$m restated US$m restated
Operating activities
------- -------------- --------------
Operating profit 1,700 2,233 4,210
Change in fair value of investment properties 65 (665) (1,236)
Depreciation and amortisation 1,112 967 1,983
Other non-cash items 48 384 1,097
Increase in working capital (697) (885) (844)
Interest received 84 74 156
Interest and other financing charges
paid (371) (281) (615)
Tax paid (525) (374) (843)
------- -------------- --------------
1,416 1,453 3,908
Dividends from Jardine Matheson 546 - 179
Dividends from associates and joint
ventures 346 342 784
Cash flows from operating activities 2,308 1,795 4,871
Investing activities
------- -------------- --------------
Purchase of subsidiaries (note 12(a)) - (84) (1,286)
Purchase of shares in Jardine Matheson - (99) (99)
Purchase of associates and joint ventures
(note 12(b)) (639) (514) (1,191)
Purchase of other investments (note
12(c)) (279) (617) (706)
Purchase of intangible assets (123) (47) (113)
Purchase of tangible assets (615) (601) (1,236)
Additions to right-of-use assets (51) (4) (8)
Additions to investment properties (72) (99) (163)
Additions to bearer plants (21) (20) (45)
Advance to associates and joint ventures
(note 12(d)) (410) (395) (990)
Advance and repayment from associates
and joint ventures (note12(e)) 321 534 952
Sale of subsidiaries - 4 -
Sale of associates and joint ventures 3 - -
Sale of other investments (note 12(f)) 205 136 235
Sale of tangible assets 8 10 59
Sale of right-of-use assets 1 12 12
Cash flows from investing activities (1,672) (1,784) (4,579)
Financing activities
------- -------------- --------------
Capital contribution from non-controlling
interests 15 21 22
Change in interests in subsidiaries
(note 12(g)) (8) (308) (360)
Drawdown of borrowings 4,508 3,762 7,235
Repayment of borrowings (3,627) (2,553) (5,691)
Principal elements of lease payments (443) (434) (876)
Dividends paid by the Company (261) (244) (351)
Dividends paid to non-controlling interests (654) (607) (844)
Cash flows from financing activities (470) (363) (865)
------- -------------- --------------
Net increase/(decrease) in cash and
cash equivalents 166 (352) (573)
Cash and cash equivalents at beginning
of period 4,555 5,298 5,298
Effect of exchange rate changes 56 (144) (170)
------- -------------- --------------
Cash and cash equivalents at end of
period 4,777 4,802 4,555
------- -------------- --------------
Jardine Strategic 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 2018 annual financial statements except for the adoption of IFRS 16 'Leases' from 1st January 2019 as set out below.
The other amendments or interpretation, which are effective in 2019 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 or amendments that have been issued but not yet effective.
IFRS 16 'Leases'
The standard replaces IAS 17 'Leases' and related interpretations and introduces a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees. The distinction between operating and finance leases is removed for lessee accounting, and is replaced by a model where a lease liability and a corresponding right-of-use asset have to be recognised on the balance sheet for almost all leases by the lessees. The Group's recognised right-of-use assets primarily relate to property leases, which are entered into for use as retail stores and offices. There are also right-of-use assets relate to equipment and motor vehicles. Prior to 2019, payments made under operating leases were charged to profit and loss on a straight-line basis over the period of the lease. From 1st January 2019, each lease payment is allocated between settlement of the lease liability and finance cost. The finance cost is charged to profit and loss over the lease period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
In addition, leasehold land which represents payments to third parties to acquire interests in property, previously included in intangible assets and tangible assets, is now presented under right-of-use assets. Leasehold land is amortised over the useful life of the lease, which includes the renewal period if the lease is likely to be renewed by the Group without significant cost.
The accounting for lessors does not change significantly.
Changes to accounting policies on adoption of IFRS 16 have been applied retrospectively, and the comparative financial statements have been restated.
The effects of adopting IFRS 16 were as follows:
(a) On the consolidated profit and loss account for the six months ended 30th June 2018:
Increase/(decrease)
in profit
US$m
Net operating costs 32
Net financing charges (74)
Share of results of Jardine Matheson (1)
Share of results of associates and
joint ventures (10)
Tax 3
--------------------
Profit after tax (50)
Attributable to:
Shareholders of the Company* (39)
Non-controlling interests (11)
(50)
--------------------
* Further analysed as:
Underlying profit attributable to
shareholders (39)
Non-trading items -
Profit attributable to shareholders (39)
--------------------
Basic underlying earnings per share
(US$) (0.07)
--------------------
Diluted underlying earnings per share
(US$) (0.07)
--------------------
Basic earnings per share (US$) (0.07)
Diluted earnings per share (US$) (0.07)
(b) On the consolidated statement of comprehensive income for the six months ended 30th June 2018:
Increase/(decrease)
in total
comprehensive income
US$m
Profit for the period (50)
Other comprehensive income for the period,
net of tax
Items that may be reclassified subsequently
to profit or loss:
Net exchange translation differences
- net gain arising during the period 7
Total comprehensive income for the period (43)
---------------------
Attributable to:
Shareholders of the Company (33)
Non-controlling interests (10)
(43)
---------------------
(c) On the consolidated balance sheet at 1st January
Increase/(decrease)
2019 2018
US$m US$m
Assets
Intangible assets (711) (751)
Tangible assets (444) (428)
Right-of-use assets 4,807 4,952
Investment in Jardine Matheson (31) (29)
Associates and joint ventures (37) (20)
Non-current debtors (13) (51)
Deferred tax assets (2) -
Current debtors (79) (33)
----- -----
Total assets 3,490 3,640
----- -----
Equity
Revenue and other reserves (323) (303)
Non-controlling interests (96) (88)
(419) (391)
----- -----
Non-current liabilities
Long-term borrowings (24) (1)
Non-current lease liabilities 3,251 3,267
Deferred tax liabilities (33) (26)
Non-current provisions 14 97
----- -----
3,208 3,337
----- -----
Current liabilities
Current creditors (37) (43)
Current borrowings (14) (3)
Current lease liabilities 772 727
Current provisions (20) 13
----- -----
701 694
----- -----
Total equity and liabilities 3,490 3,640
----- -----
(d) On the consolidated cash flow statement for the six months ended 30th June 2018:
Inflows/(outflows)
US$m
Operating activities
Operating profit 32
Depreciation and amortisation 470
Decrease in working capital 4
Interest and other financing charges
paid (74)
-----
432
-----
Investing activities
Purchase of intangible assets 4
Additions to right-of-use assets (4)
Sale of intangible assets (12)
Sale of right-of-use assets 12
-
-----
Financing activities
Repayment of borrowings 2
Principal elements of lease payments (434)
(432)
-----
Net change in cash and cash equivalents -
-----
(e) Change in principal accounting policies on adoption of IFRS 16
Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease, that is the date the underlying assets are available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment, and adjusted for any remeasurement of lease liabilities. The cost of the right-of-use assets includes amount of the initial measurement of lease liabilities recognised, lease payments made at or before the commencement date less any lease incentives received, initial direct costs incurred, and restoration costs.
Right-of-use assets are depreciated using the straight-line method over the shorter of their estimated useful lives and the lease terms.
When right-of-use assets meet the definition of investment properties, they are presented in investment properties, and are initially measured at cost and subsequently measured at fair value, in accordance with the Group's accounting policy.
Payments associated with short-term lease and leases of low-value assets (i.e. US$5,000 or less) are recognised on a straight-line basis as an expense in profit and loss. Short-term leases are leases with a lease term of 12 months or less. Low value assets comprised IT equipment and small items of office furniture.
Lease liabilities
Lease liabilities are recognised at the commencement of the lease and are measured at the present value of lease payments to be made over the lease term. Lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease, if the lease term reflects the Group exercising that option. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased by the interest costs on the lease liabilities and decreased by lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
Interest is included as finance cost and charged to the profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liabilities for each period.
Lease liabilities are classified as non-current liabilities unless payments are within 12 months from the balance sheet date.
(f) Critical accounting estimates and judgements
Determination of lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the assets for additional terms. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, the Group considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew.
The assessment of whether the Group is reasonably certain to exercise the options impacts the lease terms, which significantly affects the amount of lease liabilities and right-of-use assets recognised.
Determination of discount rates
The Group uses the incremental borrowing rate at the lease commencement date as the discount rate to measure a lease liability if the interest rate implicit in the lease cannot be readily determinable. The Group applies the incremental borrowing rate with reference to the rate of interest that the Group would have to pay to borrow, over a similar term as that of the lease, the funds necessary to obtain an asset of a similar value to the right-of-use asset in the country where it is located.
2. Revenue
Jardine
Hongkong Dairy Mandarin Cycle Intersegment
&
Land Farm Oriental Carriage Astra transactions Group
US$m US$m US$m US$m US$m US$m US$m
-------- ------ -------- -------- ----- ------------ ------
Six months ended 30th
June 2019
By product and service:
Property 804 - - - 21 (2) 823
Motor vehicles - - - 966 3,503 - 4,469
Retail and restaurants - 5,761 - - - - 5,761
Financial services - - - - 710 - 710
Engineering, heavy
equipment, mining
and construction - - - - 3,026 - 3,026
Hotels - - 279 - - - 279
Other - - - - 931 - 931
-------- ------ -------- -------- ----- ------------ ------
804 5,761 279 966 8,191 (2) 15,999
-------- ------ -------- -------- ----- ------------ ------
Revenue from contracts
with customers:
-------- ------ -------- -------- ----- ------------ ------
Recognised at a point
in time 34 5,761 104 934 7,190 - 14,023
Recognised over time 185 - 165 32 189 - 571
219 5,761 269 966 7,379 - 14,594
Revenue from other
sources:
-------- ------ -------- -------- ----- ------------ ------
Rental income from
investment properties 509 - - - 3 (2) 510
Revenue from financial
services
companies - - - - 710 - 710
Other 76 - 10 - 99 - 185
585 - 10 - 812 (2) 1,405
-------- ------ -------- -------- ----- ------------ ------
804 5,761 279 966 8,191 (2) 15,999
-------- ------ -------- -------- ----- ------------ ------
Six months ended 30th
June 2018
By product and service:
Property 1,516 - - - 1 (2) 1,515
Motor vehicles - - - 1,041 3,653 - 4,694
Retail and restaurants - 5,929 - - - - 5,929
Financial services - - - - 699 - 699
Engineering, heavy
equipment, mining
and construction - - - - 2,815 - 2,815
Hotels - - 308 - - (1) 307
Other - - - - 980 - 980
----- ------ --- ----- ----- --- ------
1,516 5,929 308 1,041 8,148 (3) 16,939
----- ------ --- ----- ----- --- ------
Revenue from contracts
with customers:
----- ------ --- ----- ----- --- ------
Recognised at a point
in time 784 5,929 109 1,015 7,147 - 14,984
Recognised over time 172 - 188 26 195 (1) 580
956 5,929 297 1,041 7,342 (1) 15,564
Revenue from other
sources:
----- ------ --- ----- ----- --- ------
Rental income from
investment properties 484 - - - 1 (2) 483
Revenue from financial
services companies - - - - 699 - 699
Other 76 - 11 - 106 - 193
560 - 11 - 806 (2) 1,375
----- ------ --- ----- ----- --- ------
1,516 5,929 308 1,041 8,148 (3) 16,939
----- ------ --- ----- ----- --- ------
No interest income calculated using effective interest method had been included in revenue from contracts with customers for the six months ended 30th June 2019 and 2018.
Gross revenue, comprises revenue together with 100% of revenue from Jardine Matheson, associates and joint ventures, are analysed as follows:
Six months ended 30th June
2019 2018
US$m US$m
By business:
Jardine Matheson 14,836 10,313
Hongkong Land 1,771 2,126
Dairy Farm 13,782 12,215
Mandarin Oriental 449 492
Jardine Cycle & Carriage 3,161 3,545
Astra 16,421 15,797
Intersegment transactions (146) (140)
------ ------
50,274 44,348
------ ------
3. Net Operating Costs
Six months ended 30th June
2019 2018
US$m US$m
Cost of sales (11,740) (12,615)
Other operating income 389 303
Selling and distribution costs (1,795) (1,841)
Administration expenses (1,041) (949)
Other operating expenses (47) (269)
-------- --------
(14,234) (15,371)
-------- --------
Net operating costs included the following
gains/(losses) from non-trading items:
Change in fair value of other investments 76 (242)
Closure of a hotel (32) -
Sale of businesses - 9
Other 3 (1)
47 (234)
-------- --------
4. Share of Results of Jardine Matheson
Six months ended 30th June
2019 2018
US$m US$m
By business:
Jardine Pacific 35 38
Jardine Motors 37 35
Jardine Lloyd Thompson - 20
Corporate and other interests 899 19
----- -----
971 112
----- -----
Share of results of Jardine Matheson included
the following gains/(losses) from non-trading
items:
Change in fair value of investment properties 5 5
Change in fair value of other investments (1) -
Sale of Jardine Lloyd Thompson (note 9) 874 -
Other 2 (1)
880 4
----- -----
Results are shown after tax and non-controlling interests in Jardine Matheson.
5. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2019 2018
US$m US$m
By business:
Jardine Matheson 58 38
Hongkong Land 116 72
Dairy Farm 74 52
Mandarin Oriental (2) 1
Jardine Cycle & Carriage 47 64
Astra 201 209
494 436
----- -----
Share of results of associates and joint
ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties (10) (1)
Change in fair value of other investments (6) 1
Sale of businesses 8 -
(8) -
----- -----
Results are shown after tax and non-controlling interests in the associates and joint ventures.
6. Tax
Six months ended 30th June
2019 2018
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (429) (432)
Deferred tax 49 19
----- -----
(380) (413)
----- -----
Greater China (101) (111)
Southeast Asia (275) (299)
United Kingdom (1) -
Rest of the world (3) (3)
----- -----
(380) (413)
----- -----
Tax relating to components of other comprehensive
income or expense is analysed as follows:
Cash flow hedges 18 (14)
----- -----
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
Share of tax charge of Jardine Matheson of US$7 million (2018: tax charge of US$17 million) is included in share of results of Jardine Matheson. There is no tax charge or credit (2018: tax credit of US$1 million) is included in share of other comprehensive income of Jardine Matheson.
Share of tax charge of associates and joint ventures of US$191 million and tax credit of US$12 million (2018: tax charges of US$158 million and US$5 million) are included in share of results of associates and joint ventures and share of other comprehensive income of associates and joint ventures, respectively.
7. Profit Attributable to Shareholders
Six months ended 30th June
2019 2018
US$m US$m
Operating segments:
Jardine Matheson 149 145
Hongkong Land 235 228
Dairy Farm 136 130
Mandarin Oriental 8 17
Jardine Cycle & Carriage 53 62
Astra 245 266
----- -----
826 848
Corporate and other interests (47) (59)
----- -----
Underlying profit attributable to shareholders* 779 789
(Decrease)/increase in fair value of investment
properties (32) 337
Other non-trading items 910 (181)
Profit attributable to shareholders 1,657 945
----- -----
* Underlying profit attributable to shareholders is the measure of profit adopted by the Group in accordance with IFRS 8 'Operating Segments'.
8. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$1,657 million (2018: US$945 million) and on the weighted average number of 565 million (2018: 571 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$1,657 million (2018: US$945 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of Jardine Matheson, subsidiaries, associates or joint ventures, and on the weighted average number of 565 million (2018: 571 million) shares in issue during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2019 2018
Weighted average number of shares in issue 1,108 1,108
Company's share of shares held by Jardine
Matheson (543) (537)
------------ ------------
Weighted average number of shares for earnings
per share calculation 565 571
------------ ------------
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2019 2018
Basic Diluted Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
Profit attributable
to shareholders 1,657 2.93 2.93 945 1.66 1.66
Non-trading items (note
9) (878) (156)
----- ------
Underlying profit
attributable
to shareholders 779 1.38 1.38 789 1.38 1.38
----- ------
9. 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 and on equity investments which are fair value through profit and loss; 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; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.
Six months ended 30th June
2019 2018
US$m US$m
By business:
Jardine Matheson 880 4
Hongkong Land (28) 337
Dairy Farm 1 8
Mandarin Oriental (18) -
Jardine Cycle & Carriage 15 (180)
Corporate and other interests 28 (13)
878 156
----- -----
An analysis of non-trading items after
interest, tax and non-controlling interests
is set out below:
Change in fair value of investment properties
----- -----
- Hongkong Land (44) 332
- other 12 5
----- -----
(32) 337
Change in fair value of other investments 52 (187)
Sale of Jardine Lloyd Thompson 874 -
Sale of other businesses 6 7
Closure of a hotel (24) -
Other 2 (1)
878 156
----- -----
The sale of Jardine Matheson's entire 41% interest in Jardine Lloyd Thompson was completed on 1st April 2019 with net proceeds of US$2.1 billion generating a profit on sale of US$1.5 billion.
10. Dividends
Six months ended 30th June
2019 2018
US$m US$m
Final dividend in respect of 2018 of USc24.00
(2017: USc22.50) per share 266 249
Company's share of dividends paid on the
shares held by Jardine Matheson (130) (121)
----- -----
136 128
----- -----
An interim dividend in respect of 2019 of USc10.50 (2018: USc10.00) per share amounting to a total of US$116 million (2018: US$111 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on the shares held by Jardine Matheson of US$57 million (2018: US$54 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2019.
11. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2019 and 31st December 2018 are as follows:
Fair Other
value Fair value Financial financial
through through assets liabilities
Fair value profit other at at Total
of hedging and comprehensive amortised amortised carrying Fair
instruments loss income costs costs amount value
US$m US$m US$m US$m US$m US$m US$m
30th June 2019
Financial assets
measured at fair
value
Other investments
* equity investments - 2,175 - - - 2,175 2,175
* debt investments - - 614 - - 614 614
Derivative financial
instruments 99 - - - - 99 99
----------- -------
99 2,175 614 - - 2,888 2,888
----------- ------- ------------- ----------- ----------- -------- --------
Financial assets
not measured
at fair value
Debtors - - - 7,829 - 7,829 7,901
Bank balances - - - 4,793 - 4,793 4,793
----------- ------- ------------- ----------- ----------- -------- --------
- - - 12,622 - 12,622 12,694
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
measured at fair
value
Derivative financial
instruments (87) - - - - (87) (87)
Contingent consideration
payable - (9) - - - (9) (9)
----------- ------- ------------- ----------- ----------- -------- --------
(87) (9) - - - (96) (96)
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
not measured
at fair value
Borrowings - - - - (14,820) (14,820) (14,973)
Leases liabilities - - - - (3,949) (3,949) (3,949)
Trade and other
payables excluding
non-financial
liabilities - - - - (7,287) (7,287) (7,287)
----------- ------- ------------- ----------- ----------- -------- --------
- - - - (26,056) (26,056) (26,209)
----------- ------- ------------- ----------- ----------- -------- --------
Financial instruments by category
Fair Other
value Fair value Financial financial
through through assets liabilities
Fair value profit other at at Total
of hedging and comprehensive amortised amortised carrying Fair
instruments loss income costs costs amount value
US$m US$m US$m US$m US$m US$m US$m
31st December
2018
Financial assets
measured at fair
value
Other investments
* equity investments - 2,053 - - - 2,053 2,053
* debt investments - - 540 - - 540 540
Derivative financial
instruments 188 - - - - 188 188
----------- -------
188 2,053 540 - - 2,781 2,781
----------- ------- ------------- ----------- ----------- -------- --------
Financial assets
not measured at
fair value
Debtors - - - 7,437 - 7,437 7,504
Bank balances - - - 4,590 - 4,590 4,590
----------- ------- ------------- ----------- ----------- -------- --------
- - - 12,027 - 12,027 12,094
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
measured at fair
value
Derivative financial
instruments (52) - - - - (52) (52)
Contingent consideration
payable - (9) - - - (9) (9)
----------- ------- ------------- ----------- ----------- -------- --------
(52) (9) - - - (61) (61)
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
not measured at
fair value
Borrowings - - - - (13,853) (13,853) (14,036)
Lease liabilities - - - - (4,023) (4,023) (4,023)
Trade and other
payable excluding
non-financial
liabilities - - - - (7,564) (7,564) (7,564)
----------- ------- ------------- ----------- ----------- -------- --------
- - - - (25,440) (25,440) (25,623)
----------- ------- ------------- ----------- ----------- -------- --------
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair values of listed securities and bonds are based on quoted prices in active markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly ('observable current market transactions')
The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date. The rates for interest rate swaps and caps, cross-currency swaps and forward foreign exchange contracts are calculated by reference to market interest rates and foreign exchange rates.
The fair values of unlisted investments mainly include club and school debentures, are determined using prices quoted by brokers at the balance sheet date.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair values of other unlisted equity investments are determined using valuation techniques by reference to observable current market transactions (including price-to earnings and price-to book ratios of listed securities of entities engaged in similar industries) or the market prices of the underlying investments with certain degree of entity specific estimates or discounted cash flow by projecting the cash inflows from these investments.
There were no changes in valuation techniques during the six months ended 30th June 2019 and the year ended 31st December 2018.
The table below analyses financial instruments carried at fair value at 30th June 2019 and 31st December 2018, by the levels in the fair value measurement hierarchy:
Quoted Observable
prices current
in active market Unobservable
markets transactions inputs Total
US$m US$m US$m US$m
30th June 2019
Assets
Other investments
--------- ------------ ------------ -----
- equity investments 1,808 12 355 2,175
- debt investments 614 - - 614
2,422 12 355 2,789
Derivative financial instruments
at fair value
* through other comprehensive income - 85 - 85
* through profit and loss - 14 - 14
2,422 111 355 2,888
--------- ------------ ------------ -----
Liabilities
Contingent consideration
payable - - (9) (9)
Derivative financial instruments
at fair value
* through other comprehensive income - (85) - (85)
* through profit and loss - (2) - (2)
- (87) (9) (96)
--------- ------------ ------------ -----
31st December 2018
Assets
Other investments
--------- ------------ ------------ -----
- equity investments 1,792 13 248 2,053
- debt investments 540 - - 540
2,332 13 248 2,593
Derivative financial instruments
at fair value
* through other comprehensive income - 182 - 182
* through profit and loss - 6 - 6
2,332 201 248 2,781
--------- ------------ ------------ -----
Liabilities
Contingent consideration
payable - - (9) (9)
Derivative financial instruments
at fair value
* through other comprehensive income - (42) - (42)
* through profit and loss - (10) - (10)
- (52) (9) (61)
--------- ------------ ------------ -----
There were no transfers among the three categories during the six months ended 30th June 2019 and the year ended 31st December 2018.
Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2019 and year ended 31st December 2018 are as follows:
Unlisted Contingent
equity consideration
investments payable
US$m US$m
At 1st January 2019 248 (9)
Exchange differences 5 -
Additions 102 -
At 30th June 2019 355 (9)
------------ --------------
At 1st January 2018 102 (9)
Exchange differences (13) -
Additions 163 -
Net change in fair value during the
year included in profit and loss (4) -
------------ --------------
At 31st December 2018 248 (9)
------------ --------------
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds, current creditors, current borrowings and current lease liabilities are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates.
12. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries for the six months ended 30th June 2018 included US$71 million and US$13 million for Astra's payment of deferred consideration for investments in toll road concessions and acquisition of an 80% interest in PT Suprabari Mapanindo Mineral, a coal mining company, respectively, in 2017.
(b) Purchase of associates and joint ventures for the six months ended 30th June 2019 mainly included US$254 million for Hongkong Land's investments primarily in mainland China; US$168 million for Jardine Cycle & Carriage's additional interest in Truong Hai Auto Corporation and US$85 million for Astra's investments in toll road concessions.
Purchase for the six months ended 30th June 2018 mainly included Hongkong Land's investments in mainland China, Thailand and Vietnam.
(c) Purchase of other investments for the six months ended 30th June 2019 comprised Astra's investment in GOJEK and other securities of US$100 million and US$179 million, respectively.
Purchase for the six months ended 30th June 2018 included Jardine Cycle & Carriage's investment in Toyota Motor Corporation of US$200 million; and Astra's investment in GOJEK and other securities of US$150 million and US$158 million, respectively.
(d) Advance to associates and joint ventures for the six months ended 30th June 2019 and 2018 mainly included Hongkong Land's advance to its property joint ventures.
(e) Advance and repayment from associates and joint ventures for the six months ended 30th June 2019 and 2018 mainly included advance and repayment from Hongkong Land's property joint ventures.
(f) Sale of other investments for the six months ended 30th June 2019 and 2018 mainly included Astra's sale of securities.
(g) Change in interests in subsidiaries
Six months ended 30th June
2019 2018
US$m US$m
Increase in attributable interests
- Mandarin Oriental (5) (22)
- Hongkong Land - (87)
- other (3) (202)
Decrease in attributable interests - 3
(8) (308)
----- -----
Increase in attributable interests in other subsidiaries for the six months ended 30th June 2018 comprised Astra's acquisition of the remaining 25% interest in Astra Sedaya Finance, a consumer financing company, from Permata Bank, increasing its controlling interest to 100%.
13. Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2019 and 31st December 2018 amounted to US$2,461 million and US$3,064 million, respectively.
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 condensed financial statements.
14. Related Party Transactions
In accordance with the Bye-laws of the Company, Jardine Matheson Limited, a wholly-owned subsidiary of Jardine Matheson Holdings Limited ('Jardine Matheson'), has been appointed General Manager of the Company under a General Manager Agreement. With effect from 1st January 2008, Jardine Matheson Limited has sub-delegated certain of its responsibilities under the agreement to a fellow subsidiary. Total fees payable for services provided to the Company for the six months ended 30th June 2019 amounted to US$70 million (2018: US$70 million).
In the normal course of business the Group undertakes a variety of transactions with Jardine Matheson, and with certain of its associates and joint ventures.
The most significant of such transactions relate to the purchases of motor vehicles and spare parts from the Group's associates and joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of motor vehicles and spare parts purchased for the six months ended 30th June 2019 amounted to US$2,577 million (2018: US$2,578 million). The Group also sells motor vehicles and spare parts to its associates and joint ventures in Indonesia including PT Astra Honda Motor, PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sales of motor vehicles and spare parts for the six months ended 30th June 2019 amounted to US$312 million (2018: US$307 million).
Permata Bank provides banking services to the Group. The Group's deposits with Permata Bank at 30th June 2019 amounted to US$400 million (2018: US$396 million).
There were no other related party transactions that might be considered to have a material effect on the financial position or performance of the Group that were entered into or changed during the first six months of the current financial year.
Amounts of outstanding balances with Jardine Matheson, associates and joint ventures are included in debtors and creditors, as appropriate.
15. Market Value Basis Net Assets
At 30th
June At 31st
2019 December2018
US$m US$m
Jardine Matheson 7,635 10,948
Hongkong Land 7,577 7,413
Dairy Farm 7,505 9,499
Mandarin Oriental 1,759 2,012
Jardine Cycle & Carriage 7,934 7,671
Other holdings 578 486
------- -------------
32,988 38,029
Jardine Strategic Corporate 1,492 734
------- -------------
34,480 38,763
------- -------------
US$ US$
Net asset value per share 61.10 68.46
------- -------------
'Market value basis net assets' are calculated based on the market price of the Company's holdings for listed companies, with the exception of the holding in Jardine Matheson which has been calculated by reference to the market value of US$26,906 million (2018: US$29,706 million) less the Company's share of the market value of Jardine Matheson's interest in the Company. For unlisted companies a Directors' valuation has been used.
Net asset value per share is calculated on 'market value basis net assets' of US$34,480 million (2018: US$38,763 million) and on 564 million (2018: 566 million) shares outstanding at the period end which excludes the Company's share of the shares held by Jardine Matheson of 544 million (2018: 542 million) shares.
Jardine Strategic Holdings Limited Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.
-- Economic Risk
-- Commercial Risk and Financial Risk
-- Concessions, Franchises and Key Contracts
-- Regulatory and Political Risk
-- Terrorism, Pandemic and Natural Disasters
For greater detail, please refer to page 131 of the Company's 2018 Annual Report, a copy of which is available on the Company's website at www.jardines.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance with IAS 34; and
(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority of the United Kingdom.
For and on behalf of the Board
Ben Keswick
Y.K. Pang
Directors
The interim dividend of USc10.50 per share will be payable on 17th October 2019 to shareholders
on the register of members at the close of business on 23rd August 2019. The shares will be
quoted ex-dividend on 22nd August 2019 and the share registers will be closed from 26th to
30th August 2019, inclusive. The dividend will be available in cash with a scrip alternative.
Shareholders will receive their cash dividends in United States Dollars, unless they are registered
on the Jersey branch register, in which case they will have the option to elect for their
dividends to be paid in Sterling. These shareholders may make new currency elections for the
2019 interim dividend by notifying the United Kingdom transfer agent in writing by 27th September
2019. The Sterling equivalent of dividends declared in United States Dollars will be calculated
by reference to a rate prevailing on 2nd October 2019.
Shareholders holding their shares through CREST in the United Kingdom will receive their cash
dividends in Sterling only as calculated above. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore will receive their cash dividends
in United States Dollars unless they elect, through CDP, to receive Singapore Dollars.
Shareholders on the Singapore branch register who wish to deposit their shares into the CDP
system by the dividend record date, being 23rd August 2019, must submit the relevant documents
to M & C Services Private Limited, the Singapore branch registrar, by no later than 5.00 p.m.
(local time) on 22nd August 2019.
Jardine Strategic
Jardine Strategic is a holding company which makes long-term strategic investments in multinational businesses, particularly those with an Asian focus, and in other high quality companies with existing or potential links with the Group. Its principal attributable interests are in Jardine Matheson (58%), Hongkong Land (50%), Dairy Farm (78%), Mandarin Oriental (78%) and Jardine Cycle & Carriage (75%), which in turn has a 50% interest in Astra. It also has minority interests in Greatview Aseptic Packaging and Zhongsheng. Jardine Strategic is 85% held by Jardine Matheson.
The Group companies operate in the fields of motor vehicles and related operations, property investment and development, food retailing, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining and agribusiness.
Jardine Strategic Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. The Company's interests are managed from Hong Kong by Jardine Matheson Limited.
- end -
For further information, please contact:
Jardine Matheson Limited John Witt (852) 2843 8278 Brunswick Group Limited David Ashton (852) 3512 5063
As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results announcement will remain available on the Company's website, www.jardines.com, together with other Group announcements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR SSIFEFFUSEDA
(END) Dow Jones Newswires
August 02, 2019 05:53 ET (09:53 GMT)
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