TIDMJDS TIDMJAR
RNS Number : 6053U
Jardine Strategic Hldgs Ltd
30 July 2020
To: Business Editor
30th July 2020
For immediate release
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
Jardine Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2020
Challenging first half, strong balance sheet and solid mid-term
prospects
Highlights
-- All businesses faced challenging market conditions
-- Underlying profit of US$395 million for the period to 30th
June 2020, down 49% against prior year
-- Some signs of business recovery in second quarter, but the outlook remains uncertain
-- Group's balance sheet and funding position remain strong
-- Interim dividend declared of US10.50 per share, unchanged from the same period in 2019
"As expected, COVID-19 had a significant impact on the Group's
results in the first half, with Southeast Asia particularly
affected. It is expected that the pandemic will continue to create
uncertainty and volatility in the second half, making it difficult
to predict full year performance.
On behalf of the Board, I would like to thank all my colleagues
across the Group for their continuing dedication, hard work and
professionalism during such challenging times.
The Group has a strong balance sheet and liquidity position and
will remain vigilant for value-adding opportunities should they
arise, despite the uncertain near-term outlook."
Ben Keswick, Executive Chairman
Results
(unaudited)
Six months ended 30th June
2020 2019 Change
US$m US$m %
------------------------------------ -------- ----------- ----------------
Gross revenue including 100% of
Jardine Matheson, associates and
joint ventures 44,936 50,274 -11
Revenue 12,748 15,999 -20
Underlying profit* attributable
to shareholders 395 779 -49
(Loss)/profit attributable to
shareholders (961) 1,657 n/a
US$ US$ %
-------- -----------
Underlying earnings per share* 0.71 1.38 -49
(Loss)/earnings per share (1.72) 2.93 n/a
Net asset value per share(#) 48.71 57.98 -16
------------------------------------ -------- ----------- ----------------
USc USc %
------------------------------------ -------- ----------- ----------------
Interim dividend per share 10.50 10.50 -
------------------------------------ -------- ----------- ----------------
* 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 2020 and 31st December 2019, 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 interim dividend of USc10.50 per share will be payable on
14th October 2020 to shareholders on the register of members at the
close of business on 21st August 2020 and will be available in cash
with a scrip alternative.
Jardine Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2020
Chairman's Statement
Overview
The Group's performance and profitability in the first half were
significantly impacted by COVID-19 and the restrictions imposed to
contain it. Greater China was mainly affected in the first quarter,
while Southeast Asia felt the impact of the pandemic increasingly
in the second quarter.
With the notable exception of Mandarin Oriental, the Group's
major businesses remained profitable in the first half, although at
materially lower levels than the same period last year. While there
were some signs of recovery in certain of the Group's businesses in
the second quarter (including the Group's property development and
motors businesses on the Chinese mainland), the possibility of
further waves of the pandemic makes it difficult to predict
performance in the second half.
Jardines remains resilient and well-positioned to achieve its
long-term growth objectives, reflecting the diversity of the
Group's businesses, the strength of their underlying business
models and the Group's clear strategic aims.
The Group also remains focussed on addressing changes in
customer behaviours, some of which may be permanent, and the need
for each of its businesses to adapt and align to new situations
resulting from COVID-19. The pandemic has further accelerated
change and disruption in our markets, and our people and businesses
are aiming to respond with speed and agility.
The balance sheet and liquidity of the Group remain robust.
Across the Group, extensive actions continue to be taken to manage
costs and preserve cash, including operational improvements to
ensure the long-term resilience of the business. The Group also has
access to substantial undrawn liquidity from committed lending
facilities.
Results
The Group's underlying profit for the first six months of 2020
was US$395 million, US$384 million, or 49%, below the corresponding
period last year, and underlying earnings per share were down 49%
at US$0.71. The revenue of the Group for the period was 20% lower
at US$12.7 billion, while revenue, including 100% of Jardine
Matheson, associates and joint ventures, was down 11% at US$44.9
billion.
Within Jardine Matheson's directly-held businesses, Jardine
Pacific's performance was slightly down overall compared with the
same period last year and it remains a resilient, cash-generative
group of businesses. HACTL performed strongly, while the
contributions from JEC and Jardine Restaurants were solid. Jardine
Schindler and Gammon delivered weaker performances, and the
contribution from Aviation Services was significantly lower due to
the challenges facing the aviation sector.
Jardine Motors saw its results fall, with the UK business
materially impacted by lockdown measures and a weaker performance
from Zung Fu on the Chinese mainland and in Hong Kong in the first
quarter. There was, however, a higher contribution in the period
from the investment in Zhongsheng, relating to its performance for
the six months from July to December 2019.
Hongkong Land's office portfolio remained resilient in Hong Kong
and Singapore, but the provision of rent relief to tenants
negatively impacted Hong Kong retail profit. Profit from
Development Properties was lower in all the group's markets due to
fewer scheduled completions in the period.
Dairy Farm saw its overall profits fall significantly due to
reduced contributions from Health & Beauty, Maxim's and
Convenience Stores, all of which have been impacted by the severe
decline in tourism and pandemic-related restrictions. There were,
however, strong performances from the group's Grocery Retail
operations and Home Furnishings business.
Mandarin Oriental recorded a significant loss in the first half
of the year, as the majority of the group's hotels were closed
throughout the second quarter.
In Southeast Asia, Astra's performance was significantly weaker
in the period, with lower contributions from automotive, financial
services and heavy equipment and mining, and Jardine Cycle &
Carriage ('JC&C') also saw reduced contributions from Thaco and
its Motor businesses, which experienced declines in all markets due
to the temporary closure of operations.
The Group recorded a non-trading net loss in the first half of
US$1,356 million, compared with a non-trading net gain of US$878
million in the first half of 2019. This was as a result of the
biannual revaluations of investment properties in Hongkong Land -
which produced a net revaluation loss of US$1,099 million as values
were suppressed due to lower open market rents - and The Excelsior
site, which led to a US$261 million revaluation loss. In the first
half of 2019, a US$2.3 billion gain was recognised in the asset
revaluation reserves when the site was reclassified as a commercial
investment property. The Group recorded a loss attributable to
shareholders for the period of US$961 million, compared with a
profit of US$1,657 million in 2019.
Financial Position
The balance sheet and liquidity of the Group remain strong.
Across the Group, extensive actions continue to be taken to manage
costs, preserve cash and increase liquidity, including the
reduction, suspension or deferral of non-essential operating and
capital expenditure.
Shareholders' funds were US$34.4 billion at 30th June 2020,
compared with US$35.8 billion at 31st December 2019. Consolidated
net debt excluding financial services companies was US$6.1 billion
at 30th June 2020, representing gearing of 10%, compared with 9% at
31st December 2019. The Group had liquidity of US$12.7 billion,
consisting of US$6.8 billion in cash reserves and US$5.9 billion in
unused, committed debt facilities.
Dividend
The Board has declared an interim dividend of USc10.50 per
share, in line with last year. The Board will review the final
dividend for the year at the end of the second half.
Business Developments
Planning of Hongkong Land's prime mixed-use site in the West
Bund area of Shanghai is underway, with completion expected in
multiple phases through to 2027. Subject to relevant approvals by
the authorities, the group has conditionally reached agreements
with two strategic partners to jointly develop the site and
received a prepayment of US$2.3 billion in the first half, with a
further amount of US$320 million received in July. The land premium
and related costs of US$4.5 billion were paid in the first
half.
Dairy Farm's multi-year programme to reshape and reorganise the
business, adapting to the changing needs of customers, has never
been more relevant and continued to progress during the first half
of the year, despite the impact of the pandemic.
This week's launch of Yuu, expected to become Hong Kong's
largest loyalty programme, is an important milestone in Dairy
Farm's drive to modernise its business and achieve a digital
transformation of the group. The Yuu programme will be a key
enabler of Dairy Farm's objective of adopting a more
customer-centric approach across all its banners and driving
enhanced levels of consumer engagement. The divestment of Wellcome
Taiwan is expected to complete by the end of the year.
Mandarin Oriental signed one new management contract in the
period, for a hotel and residences in Vienna, which are scheduled
to open in 2023.
In May 2020, Astra completed the sale of its 44.56% stake in
Permata Bank for net consideration of US$1.1 billion. The disposal,
which followed the sale of Jardine Matheson's interest in Jardine
Lloyd Thompson in 2019, has further reduced our exposure to a high
risk sector, realised a significant gain for the Group and helped
ensure that the business remains well-capitalised at both the Astra
and Jardine Matheson levels.
People
Ensuring the safety and wellbeing of employees during the
pandemic is a top priority and the Group's businesses have adopted
a range of appropriate health and safety measures.
Support from governments in a number of our key markets has
helped maintain employment. We would like to thank all our
colleagues for their continuing dedication, hard work and
professionalism during this challenging time.
As planned and announced earlier in the year, I stepped down as
Group Managing Director on 15th June 2020 and was succeeded by John
Witt, formerly Chief Financial Officer. Graham Baker was appointed
as Chief Financial Officer with effect from 15th June 2020. I will
continue as Group Chairman and look forward to working with John,
Graham and the wider leadership team in the coming years.
Outlook
The pandemic continues to create uncertainty and volatility and
trading conditions in the second half are expected to continue to
be challenging. While there were some signs of recovery in certain
of the Group's businesses in the second quarter, the possibility of
further waves of the pandemic make it difficult to predict
performance in the second half.
The Group is focussed both on driving operational performance
across its businesses and on identifying and taking the potential
opportunities which are emerging from the pandemic to drive future
growth. The Group's strong balance sheet, long-term perspective and
liquidity will position it well to take advantage of these
opportunities as they arise.
Ben Keswick
Executive Chairman
Operating Review
Jardine Pacific
Jardine Pacific reported an underlying net profit of US$53
million in the first half, compared with US$56 million in the
equivalent period in 2019. The group remains resilient and
cash-generative. HACTL performed strongly and saw cargo throughput
maintained, and JEC had a solid start to the year, with improved
performances both in Hong Kong and regionally. Jardine Restaurants
saw mixed results across its banners, with strong delivery sales
for Pizza Hut in Hong Kong and Taiwan - thanks to a quick pivot
towards this by management - but weaker performances in its other
banners due to the impact of the pandemic. Gammon's contribution
was lower, with slower progress on several projects, while Jardine
Schindler also saw a number of projects in Southeast Asia delayed,
leading to a reduced contribution in the period. Jardine Aviation
Services delivered significantly lower results due to the
substantial fall in flight volumes, which is expected to continue
in the second half.
Jardine Motors
Jardine Motors saw its underlying net profit for the first half
fall by 43% to US$61 million. Zung Fu on the Chinese mainland
experienced a challenging first quarter, as factories and showrooms
closed due to the pandemic, the supply chain was disrupted and
there were lower margins from aftersales services. The second
quarter saw some recovery in demand, but it is difficult to predict
future performance given the uncertainty over the future impact of
the pandemic. Zung Fu in Hong Kong also saw poor margins in the
period due to weaker consumer sentiment. The United Kingdom
business was materially impacted by lockdown measures and made a
loss in the first half. Conditions in the UK market are expected to
remain challenging in the second half.
There was a higher contribution from the investment in
Zhongsheng, relating to its performance for the six months from
July to December 2019.
Hongkong Land
Hongkong Land's underlying profit attributable to shareholders
for the first six months was US$353 million, down 24% from the
equivalent period in 2019. There was a loss attributable to
shareholders of US$1,828 million after accounting for a net
non-cash loss of US$2,180 million arising on the bi-annual
revaluation of investment properties, due to lower open market
rents. This compares with a profit attributable to shareholders of
US$411 million in the first half of 2019, which included a net
revaluation loss of US$55 million. The group's financial position
remains robust, with a strong balance sheet and liquidity.
The group's office portfolio in Hong Kong remained resilient,
despite subdued leasing activity, with vacancy at 5% at the end of
June 2020 (4.5% on a committed basis), compared to 2.9% at the end
of 2019. The Central retail portfolio was negatively impacted in
the first half by deteriorating consumer sentiment and various
measures introduced in Hong Kong to contain the pandemic. Vacancy
of 0.4% on both a physical and committed basis was virtually
unchanged compared to 0.3% at the end of 2019.
In Singapore, rental reversions remained positive in the group's
office portfolio in the first half and vacancy was 1.5% at the end
of June 2020 (1% on a committed basis), compared with 5% at the end
of 2019.
In Shanghai, planning of Hongkong Land's prime mixed-use site
along the Huangpu River in the Xuhui District is underway, with
completion expected in multiple phases through to 2027. The project
will substantially expand Hongkong Land's portfolio and provide it
with a significant presence in the predominant commercial hub of
the Chinese mainland, complementing its large-scale presence in the
other key Asian financial centres of Hong Kong and Singapore.
Since securing the site and subject to relevant approvals by the
authorities, the group has conditionally reached agreements with
two strategic partners to jointly develop the site, receiving a
prepayment of US$2.3 billion in the first half with a further
amount of US$320 million received in July. The land premium and
related costs of US$4.5 billion were paid in the first half. The
project will be funded by a combination of internal resources and
external funding.
On the Chinese mainland, as anticipated the profit contribution
from Development Properties in the first half of 2020 decreased
compared to the first half of 2019 due to fewer sales completions.
Market sentiment in the group's core markets started to recover in
the second quarter, following the temporary closure of all sales
galleries and the suspension of construction activities for some
two months in the first quarter as a result of the impact of the
pandemic. At 30th June 2020, the Group had US$2,183 million in sold
but unrecognised contracted sales, compared with US$1,860 million
at the end of 2019.
The profit contribution from the Singapore business in the first
half of 2020 was lower than in the first half of 2019, as sales
galleries and construction activities there were also suspended as
a result of the pandemic. The 309-unit Margaret Ville development
is 92% pre-sold, whilst pre-sales at the 1,404-unit Parc Esta and
the 638-unit Leedon Green projects have performed well under
current market conditions. The group's attributable interest in
contracted sales was US$301 million in the first half of 2020,
compared to US$255 million and US$414 million in the first and
second halves of 2019, respectively.
In the rest of Southeast Asia, construction activities at the
group's projects have largely been suspended or curtailed since
April and market sentiment remains subdued.
Dairy Farm
Dairy Farm saw sales of US$5.2 billion for the period by its
subsidiaries, 9% lower than the prior year. Underlying profit was
US$105 million, 40% lower than the same period last year.
In Health and Beauty, performance in North Asia was materially
affected by a continuing lack of overseas tourist customers in Hong
Kong, despite the business initially seeing strong demand for
personal protection equipment. The Southeast Asia business
performed well in the first quarter but was then impacted as social
distancing requirements began to take effect towards the end of the
first quarter.
The Convenience Stores business was impacted in the period by
movement restrictions and physical distancing requirements, as well
as temporary store closures on the Chinese mainland and reduced
customer numbers in Hong Kong and Singapore. Performance improved
over the course of the first half in Hong Kong and on the Chinese
mainland in particular, as various lockdown restrictions eased, but
it is difficult to predict performance for the rest of the year
given uncertainty over the future impact of the pandemic. Recovery
in Singapore has lagged behind that in North Asia.
Maxim's, the group's 50%-owned associate, saw a significant
reduction in customer numbers and a number of temporary store
closures, and reported a loss for the first half. The performance
of the business improved over the course of the second quarter, as
pandemic-related restrictions eased, but any return of restrictions
which reduce customer levels or require further temporary closures
of its outlets will impact future performance .
The Grocery Retail business saw improved profits. The strong
performance was underpinned by the ongoing execution of the group's
transformation plan and improvement programmes, as well as changing
customer behaviours as a result of the pandemic. The strong
turnaround momentum continued in Singapore and Malaysia as the
execution of improvement programmes and the group's space
optimisation plan both made a positive contribution, and there were
encouraging performances from new upscale formats and refreshed
stores. Market conditions in Indonesia remained challenging. The
divestment of Wellcome Taiwan is expected to complete by the end of
the year.
There was also a good performance from Home Furnishings, which
saw strong contributions from new stores, enhancements in the
margin mix and lower cost of goods in the period outweigh the
impact on customer visits of pandemic-related restrictions,
including temporary store closures.
Mandarin Oriental
Mandarin Oriental recorded a significant underlying loss of
US$102 million for the first half of the year, compared with a
profit of US$11 million in the equivalent period in 2019, despite
implementing a number of cost containment measures . In Europe and
America, all of the group's hotels were closed from late March
onwards. Hotels in Asia and the Middle East mostly remained open
during the first half but operated at very low occupancy levels
once anti-pandemic restrictions and border controls were imposed.
Combined total revenue of hotels under management fell by 57% in
the first half compared to the equivalent period last year, with
the majority of this decline occurring in the second quarter, which
saw an 86% decline against the prior year.
The group's flagship Hong Kong hotel remained open, but with
single-digit percentage occupancy levels for most of the second
quarter, and it made a loss during the first half. It did, however,
benefit from a partial recovery in food and beverage business when
government anti-pandemic measures were relaxed.
The group's hotels on the Chinese mainland saw a recovery in
occupancy levels in June to around 40%, and elsewhere a number of
the group's hotels have begun to reopen in anticipation of some
demand but, in many cases, this demand is expected to remain low
and not in line with normal market conditions. Overall a material
recovery in business levels is not expected until 2021 at the
earliest and a significant further loss is likely in the second
half of the year.
Jardine Cycle & Carriage
Jardine Cycle & Carriage reported an underlying profit for
the period of US$138 million, 66% lower than the equivalent period
last year. Profit attributable to shareholders fell by 30% to
US$301 million. The pandemic is expected to continue to adversely
impact performance for the rest of the year.
Astra's contribution to underlying profit fell by 47% to US$171
million. There were significantly weaker performances from its
automotive, financial services and heavy equipment and mining
operations.
The contribution from JC&C's Direct Motor Interests and
Thaco fell materially as automotive operations were forced to close
during the second quarter due to lockdown restrictions.
Thaco saw sales and margins impacted as a result of the
difficult market conditions. The contribution by Cycle &
Carriage Singapore was 95% lower than the same period last year, as
the business was impacted by a material reduction in the overall
passenger car market in Singapore and its market share also fell.
Tunas Ridean's contribution was 70% lower due to weaker
performances across its automotive, consumer finance and rental
operations. In Malaysia, Cycle & Carriage Bintang reported a
higher loss than in the same period last year, as sales and margins
both fell. M arket conditions are expected to remain difficult for
the remainder of the year.
There was a 5% lower contribution from Siam City Cement in
Thailand, reflecting weaker domestic performance, which was
partially offset by an improved contribution from its regional
operations, primarily in Vietnam. The contribution from
Refrigeration Electrical Engineering Corporation in Vietnam was
also lower, with w eaker performances from its power and water
investments and its M&E business, partially offset by stronger
real estate contributions.
Vinamilk produced dividend income of US$12 million in the
period, compared to US$28 million in the same period last year,
which included the 2019 interim dividend. Vinamilk's 2020 interim
dividend will be recognised later in the year. The business
reported a slightly higher profit in the first half, in local
currency terms, as domestic dairy and exports continued to
grow.
Astra
Excluding the gain on the disposal of its investment in Permata
Bank, Astra reported net profit equivalent to US$372 million, under
Indonesian accounting standards, 44% lower in its reporting
currency. This was mainly due to significantly lower contributions
from its automotive, financial services and heavy equipment and
mining businesses, partially offset by its agribusiness .
The pandemic containment measures implemented across Indonesia
caused severe disruption to Astra's operations, including the
temporary closure of its automotive manufacturing and distribution
operations. There was also a significant rise in the number of
restructured loans in its financial services businesses, in
response to government operating requirements. In addition,
depressed coal prices led to a deterioration in Astra's heavy
equipment, mining contracting and mining businesses.
Net income from Astra's automotive business fell by 79% to US$48
million, mainly due to a substantial fall in sales volumes,
especially in the second quarter. The overall wholesale car market
declined by 46% in the first half and Astra's car sales were 45%
lower, although it maintained its market share. The wholesale
motorcycle market declined by 42% in the period. Astra's Honda
motorcycle sales fell by 40%, but its market share increased from
75% to 77%. Components business Astra Otoparts reported a net loss
of US$20 million, compared with a profit of US$17 million in the
same period last year, mainly due to lower revenues from the
original equipment manufacturer and replacement market segments.
Market conditions are expected to remain difficult for the
remainder of the year.
Net income from Astra's financial services division fell by 25%
to US$142 million, primarily due to increased loan loss provisions
to cover higher non-performing loan losses in the consumer and
heavy equipment-focused finance businesses. Consumer finance
businesses saw a 16% decrease in the amounts financed and the net
income contribution from the car-focused finance companies
decreased by 24%, while the contribution from the
motorcycle-focused financing business fell by 25%. In both cases
this was caused by higher loan loss provisioning, as non-performing
loans increased. Heavy equipment-focused finance operations saw a
14% decrease in the amounts financed. General insurance company
Asuransi Astra Buana reported a 4% decrease in net income to US$35
million, caused by lower underwriting income.
In May 2020, Astra completed its sale of its 44.56% stake in
Permata Bank for a net consideration of US$1.1 billion.
Net income from Astra's Heavy Equipment, Mining, Construction
and Energy division decreased by 29 % to US$160 million, mainly due
to lower heavy equipment sales and mining contracting volume caused
by weaker coal prices. Market conditions are expected to remain
challenging for the rest of the year. United Tractors reported a
28% decrease in net income, while Komatsu heavy equipment sales
fell by 56%, and parts and service revenues were also lower. Mining
contracting operations reported lower overburden removal volume and
lower coal production. Coal mining subsidiaries achieved higher
coal sales but were affected by lower coal prices. Agincourt
Resources saw 4% lower gold sales. General contractor Acset
Indonusa, however, reported a 38% lower net loss of US$17 million,
mainly due to reduced funding costs.
Astra's infrastructure and logistics division reported a net
loss of US$6 million for the first half, compared to a net profit
of US$6 million for the same period in 2019, mainly due to lower
toll road revenues caused by lower traffic volumes. Serasi
Autoraya's net income decreased by 62% to US$2 million, primarily
as a result of lower operating margins, despite a 3% increase in
vehicles under leasing contract and higher used car sales.
Net income from Astra's Agribusiness division increased
significantly to US$21 million, due to higher crude palm oil
prices, especially in the first quarter.
Net income from Astra's information technology division was 64 %
lower, primarily due to lower revenue s in Astra Graphia's document
solution and office service businesses.
The group's property division saw net income increase , mainly
due to higher occupancy at Menara Astra and earnings recognised
from its development project, Asya Residences.
Jardine Strategic Holdings Limited
Consolidated Profit and Loss
Account
(unaudited)
Six months ended 30th June Year ended 31st December
2020 201 9 201 9
Underlying Underlying Underlying
business Non-trading business Non-trading business Non-trading
performance items Total performance items Total performance items Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue (note 2) 12,748 - 12,748 15,999 - 15,999 32,665 - 32,665
Net operating costs (note (28,891
3) (11,642) 325 (11,317) (14,281) 47 (14,234) (28,930) 39 )
Change in fair value
of investment
properties - (2,397) (2,397) - (65) (65) - (915) (915)
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
Operating profit 1,106 (2,072) (966) 1,718 (18) 1,700 3 , 735 (876) 2 ,859
Net financing charges
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
- financing charges (327) - (327) (376) - (376) (751) - (751)
- financing income 105 - 105 104 - 104 221 - 221
(222) - (222) (272) - (272) (530) - (530)
Share of results of Jardine
Matheson
(note 4) 42 5 47 91 880 971 187 946 1,133
Share of results of associates
and joint
ventures (note 5)
* before change in fair value of
investment properties 199 (57) 142 502 2 504 1,108 12 1,120
* change in fair value of investment
properties - (135) (135) - (10) (10) - (11) (11)
199 (192) 7 502 (8) 494 1,108 1 1,109
Profit/(loss) before
tax 1,125 (2,259) (1,134) 2,039 854 2,893 4,500 71 4 ,571
( 902 ( 920
Tax (note 6) (226) 11 (215) (378) (2) (380) ) (18) )
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
Profit/(loss) after tax 899 (2,248) (1,349) 1,661 852 2,513 3,5 98 53 3 ,651
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
Attributable to:
Shareholders of the Company
(notes 7 & 9) 395 (1,356) (961) 779 878 1,657 1,681 497 2 ,178
Non-controlling interests 504 (892) (388) 882 (26) 856 1,917 (444) 1 ,473
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
899 (2,248) (1,349) 1,661 852 2,513 3,5 98 53 3 ,651
-------- ----------- -------- ----------- ------------ -------- ----------- ------------ -------
US$ US$ US$ US$ US$ US$
Earnings/(loss) per share
(note 8)
- basic 0.71 (1.72) 1.38 2.93 2.98 3 .86
- diluted 0.71 (1.72) 1.38 2.93 2 .98 3 .86
-------- -------- ----------- -------- ----------- -------
Jardine Strategic Holdings Limited
Consolidated Statement of Comprehensive
Income
(unaudited) Year ended
Six months ended 31st
30th June December
2020 2019 2019
US$m US$m US$m
(Loss)/profit for the period (1,349) 2,513 3 ,651
Other comprehensive (expense)/income
Items that will not be reclassified
to profit or loss:
-------
Remeasurements of defined benefit
plans (1) (1) (8)
Net revaluation surplus before
transfer to investment properties
- right-of-use assets - 2,943 2,943
Tax on items that will not be reclassified (1) - 4
(2) 2,942 2,939
Share of other comprehensive income
of Jardine Matheson - - 12
Share of other comprehensive expense
of associates and joint ventures (3) - (13)
---------- ------- ----------
(5) 2,942 2,938
Items that may be reclassified
subsequently to profit or loss:
Net exchange translation differences
---------- ------- ----------
- net (loss)/gain arising during
the period (108) 256 486
- transfer to profit and loss 5 - 3
(103) 256 489
Revaluation of other investments
at fair value
through other comprehensive income
---------- ------- ----------
- net (loss)/ g ain arising during
the period (3) 14 20
- transfer to profit and loss (3) - (1)
(6) 14 19
Cash flow hedges
---------- ------- ----------
- net loss arising during the period (58) (52) (93)
- transfer to profit and loss 4 (4) (4)
(54) (56) (97)
Tax relating to items that may
be reclassified 1 18 29
Share of other comprehensive (expense)/income
of Jardine Matheson (11) 67 74
Share of other comprehensive (expense)/income
of associates and joint ventures (401) 143 211
---------- ------- ----------
(574) 442 725
Other comprehensive (expense)/income
for the period, net of tax (579) 3,384 3,663
---------- ------- ----------
Total comprehensive (expense)/income
for the period (1,928) 5,897 7 ,314
---------- ------- ----------
Attributable to:
Shareholders of the Company (1,210) 4,209 4 ,872
Non-controlling interests (718) 1,688 2 ,442
---------- ------- ----------
(1,928) 5,897 7 ,314
Jardine Strategic Holdings Limited
Consolidated Balance Sheet
(unaudited) At 31st
At 30th June December
2020 2019 2019
US$m US$m US$m
Assets
Intangible assets 2,632 2,615 2,693
Tangible assets 6,476 6 ,727 6 ,841
Right-of-use assets 4,326 4,468 4,406
Investment properties 39,142 37,557 36,817
Bearer plants 483 499 503
Investment in Jardine Matheson 3,326 3,668 3,703
Associates and joint ventures 13,769 14 ,780 15,288
Other investments 2,538 2,752 2,675
Non-current debtors 3,303 3,135 3,023
Deferred tax assets 395 381 415
Pension assets 1 - 2
-------- ------------- ---------
Non-current assets 76,391 76,582 76 ,366
-------- ------------- ---------
Properties for sale 2,358 2,424 2,441
Stocks and work in progress 2,477 2 ,854 2 ,811
Current debtors 6,067 7 ,372 7 ,424
Current investments 40 37 29
Current tax assets 169 207 252
Bank balances and other liquid
funds
-------- ------------- ---------
- non-financial services companies 6,521 4 ,552 5 ,346
- financial services companies 241 241 256
6,762 4 ,793 5 ,602
-------- ------------- ---------
Current assets 17,873 17,687 18,559
-------- ------------- ---------
Total assets 94,264 94 ,269 94,925
-------- ------------- ---------
Equity
Share capital 56 56 56
Share premium and capital reserves 941 941 941
Revenue and other reserves 35,706 36,428 37,054
Own shares held (2,298) (2,278) ( 2 ,294)
------- ------- ---------
Shareholders' funds 34,405 35,147 35 ,757
Non-controlling interests 28,763 29,386 29 ,903
------- ------- ---------
Total equity 63,168 64,533 65,660
------- ------- ---------
Liabilities
Long-term borrowings
------- ------- ---------
- non-financial services companies 8,721 6,992 6,976
- financial services companies 1,426 1,803 1, 697
10,147 8,795 8 ,673
Non-current lease liabilities 2,777 2,945 2,842
Deferred tax liabilities 702 696 767
Pension liabilities 375 327 364
Non-current creditors 407 349 356
Non-current provisions 280 267 289
------- ------- ---------
Non-current liabilities 14,688 13,379 13,291
------- ------- ---------
Current creditors 9,182 8 ,954 8 ,287
Current borrowings
------- ------- ---------
- non-financial services companies 3,860 4,205 4 ,368
- financial services companies 2,049 1,820 1 , 853
5,909 6,025 6 ,221
Current lease liabilities 823 834 795
Current tax liabilities 331 358 507
Current provisions 163 186 164
------- ------- ---------
Current liabilities 16,408 16,357 15,974
Total liabilities 31,096 29, 736 2 9 ,265
------- ------- ---------
Total equity and liabilities 94,264 94,269 94,925
------- ------- ---------
Jardine Strategic Holdings Limited
Consolidated Statement of Changes in Equity
Attributable
to Attributable
Revenue Contributed Asset Own shareholders to
Share Share Capital reserves surplus revaluation Hedging Exchange shares of the non-controlling Total
capital premium reserves US$m US$m 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
Six months ended
30th June 2020
(unaudited)
At 1st January
2020 56 816 125 36,085 304 2,566 (27) (1,874) (2,294) 35,757 29,903 65,660
Total
comprehensive
expense - - - (965) - - (57) (188) - (1,210) (718) (1,928)
Dividends paid
by the Company
(note 10) - - - (140) - - - - - (140) - (140)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (401) (401)
Employee share
option schemes - - 1 - - - - - - 1 - 1
Scrip issued in
lieu of
dividends - - - 4 - - - - - 4 - 4
Increase in own
shares held - - - - - - - - (4) (4) - (4)
Subsidiaries
disposed of - - - - - - - - - - (14) (14)
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 1 1
Change in
interests in
subsidiaries - - - 5 - - - - - 5 (5) -
Change in
interests in
associates
and joint
ventures - - - (8) - - - - - (8) (3) (11)
Transfer - - (1) 1 - - - - - - - -
At 30th June
2020 56 816 125 34,982 304 2,566 (84) (2,062) (2,298) 34,405 28,763 63,168
------- ------- -------- --------- ------------ ----------- -------- --------- --------- ------------ --------------- -------
Six months ended
30th June 2019
(unaudited)
At 1st January
2019 56 816 209 33,996 304 264 (13) (2,261) (2,139) 31,232 28,342 59,574
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 ( 654 ( 654
interests - - - - - - - - - - ) )
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 35,583 304 2,566 (23) ( 2 ,002) ( 2 ,278) 35 ,147 29,386 64,533
------- ------- -------- --------- ------------ ----------- -------- --------- --------- ------------ --------------- -------
Year ended 31st
December 2019
At 1st January ( 13 ( 2,261
2019 56 816 209 33 ,996 304 26 4 ) ) ( 2 ,139) 31 ,232 28,342 59,574
Total
comprehensive
income - - - 2 ,197 - 2,302 (14) 387 - 4 ,872 2 ,442 7 ,314
Dividends paid by (19 5 (19 5 (19 5
the Company - - - ) - - - - - ) - )
Dividends paid to
non-controlling
interests - - - - - - - - - - (905) (905)
Unclaimed
dividends
forfeited - - - 1 - - - - - 1 - 1
Employee share
option schemes - - 2 - - - - - - 2 - 2
Scrip issued in
lieu of dividends - - - 6 - - - - - 6 - 6
Increase in own ( 155 ( 155 ( 155
shares held - - - - - - - - ) ) - )
Subsidiaries
acquired - - - - - - - - - - 14 14
Capital
contribution from
non-controlling
interests - - - - - - - - - - 18 18
Change in
interests in
subsidiaries - - - (7) - - - - - (7) ( 8 ) (15)
Change in
interests in
associates
and joint
ventures - - - 1 - - - - - 1 - 1
Transfer - - (86) 86 - - - - - - - -
------- ------- -------- --------- ------------ ----------- -------- --------- --------- ------------ --------------- -------
At 31st December ( 27 65,66
2019 56 816 125 36 ,085 304 2,566 ) (1,874) (2,294) 35,757 29,903 0
------- ------- -------- --------- ------------ ----------- -------- --------- --------- ------------ --------------- -------
Contributed surplus represents the excess in value of shares
acquired in consideration for the issue of the Company's shares,
over the nominal value of those shares issued. Under the Bye-Laws
of the Company, the contributed surplus is distributable.
Jardine Strategic Holdings Limited
Consolidated Cash Flow Statement
(unaudited)
Six months ended Year ended
30th June 31st December
2020 2019 2019
US$m US$m US$m
Operating activities
--------- -------- --------------
Cash generated from operations 2,402 2,228 4,728
Interest received 88 8 4 180
Interest and other financing charges
paid (341) (371) (744)
Tax paid (477) (525) (927)
--------- -------- --------------
1,672 1, 416 3,237
Dividends from Jardine Matheson 546 546 734
Dividends from associates and joint
ventures 101 346 992
Cash flows from operating activities 2,319 2,308 4,963
Investing activities
--------- -------- --------------
Purchase of subsidiaries (21) - ( 28 )
Purchase of associates and joint ventures
(note 1 2 (a)) (151) (639) (1,088)
Purchase of other investments (note
1 2 (b)) (220) (279) (409)
(2 16
Purchase of intangible assets (61) (123) )
Purchase of tangible assets (312) (615) (1,129)
Additions to right-of-use assets (8) (51) (60)
Additions to investment properties (note ( 168
12(c)) (4,557) (72) )
Additions to bearer plants (16) (21) ( 44 )
Advance to and repayment to associates (1, 025
and joint ventures (note 1 2 (d)) (139) (410) )
Advance from and repayment from associates
and joint ventures (note 1 2 (e)) 340 321 920
Advance received on conditional sale
of a subsidiary in Hongkong Land (note
1 2 (c)) 2,252 - -
Sale of subsidiaries 48 - -
Sale of associates and joint ventures
(note 12(f)) 1,138 3 3
Sale of other investments (note 1 2
(g)) 188 205 450
Sale of intangible assets 1 - -
Sale of tangible assets 27 8 61
Sale of right-of-use assets - 1 3
Cash flows from investing activities (1,491) (1,672) (2,730)
Financing activities
--------- -------- --------------
Capital contribution from non-controlling
interests 1 15 18
Change in interests in subsidiaries
(note 1 2 (h)) - ( 8 ) (15)
Drawdown of borrowings 4,436 4 ,508 7,336
Repayment of borrowings (3,122) (3,627) (6,454)
Principal elements of lease payments (440) (443) (893)
Dividends paid by the Company (273) (261) (376)
Dividends paid to non-controlling interests (251) (654) (905)
Cash flows from financing activities 351 (470) (1,289)
--------- -------- --------------
Net in crease in cash and cash equivalents 1,179 166 944
Cash and cash equivalents at beginning
of period 5,583 4 ,555 4 ,555
Effect of exchange rate changes (31) 56 84
--------- -------- --------------
Cash and cash equivalents at end of
period 6,731 4 ,777 5 ,583
--------- -------- --------------
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.
The Group had early adopted the 'Interest Rate Benchmark Reform:
Amendments to IFRS 9, IAS 39 and IFRS 7' (effective 1st January
2020) for the Group's annual reporting period commencing 1st
January 2019.
There are no changes to the accounting policies as described in
the 2019 annual financial statements other than the following
changes in relation to rent concessions and government grants.
Other amendments which are effective in 2020 and relevant to the
Group's operations, do not have a significant effect on the Group's
accounting policies. The Group has not early adopted any other
standard or amendments that have been issued but not yet
effective.
COVID-19 Related Rent Concessions: Amendment to IFRS 16
Leases
The Group has early adopted the Amendment, which is effective
1st June 2020, for the Group's annual reporting period commencing
1st January 2020. Where the Group is a lessee, the practical
expedient is applied to account for the change in lease payments
resulting from rent concessions granted as a direct consequence of
the COVID-19 pandemic and elects not to assess these concessions as
lease modifications when all of the following conditions are
met:
(i) the revised lease payments are substantially the same as, or
less than, the consideration for the lease immediately preceding
the change;
(ii) reduction in lease payments relates to payment due on or before 30th June 2021; and
(iii) there is no substantive change to the other terms and conditions of the lease.
Rent concessions fulfilling the above conditions are recognised
in the profit and loss over the period in which they cover.
Government grants
Grants from government are recognised at their fair values where
there is reasonable assurance that the grants will be received, and
the Group will comply with the conditions associated with the
grants.
Grants that compensate the Group for expenses incurred are
recognised in the profit and loss as other income on a systematic
basis in the period in which the expenses are recognised.
Unconditional grants are recognised in the profit and loss as other
income when they become receivable.
Grants related to assets are deducted in arriving at the
carrying value of the related assets.
2. Revenue
Jardine
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 2020
By product and service:
Property 820 - - - 37 (2) 855
Motor vehicles - - - 514 2,169 - 2,683
Retail and restaurants - 5,240 - - - - 5,240
Financial services - - - - 716 - 716
Engineering, heavy
equipment, mining,
construction and energy - - - - 2,245 - 2,245
Hotels - - 96 - - - 96
Other - - - - 913 - 913
-------- ------ -------- -------- ----- ------------ ------
820 5,240 96 514 6,080 (2) 12,748
-------- ------ -------- -------- ----- ------------ ------
Revenue from contracts
with customers:
-------- ------ -------- -------- ----- ------------ ------
Recognised at a point
in time 102 5,240 38 487 5,147 - 11,014
Recognised over time 184 - 50 27 123 - 384
286 5,240 88 514 5,270 - 11,398
Revenue from other
sources:
-------- ------ -------- -------- ----- ------------ ------
Rental income from
investment properties 466 - - - 5 (2) 469
Revenue from financial
services companies - - - - 713 - 713
Other 68 - 8 - 92 - 168
534 - 8 - 810 (2) 1,350
-------- ------ -------- -------- ----- ------------ ------
820 5,240 96 514 6,080 (2) 12,748
-------- ------ -------- -------- ----- ------------ ------
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,
construction and energy - - - - 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
--- ------ --- --- ----- --- ------
There was no interest income calculated using effective interest
method included in revenue from contracts with customers for the
six months ended 30th June 2020 and 2019.
Gross revenue, comprises revenue together with 100% of revenue
from Jardine Matheson, associates and joint ventures, are analysed
as follows:
Six months ended 30th June
2020 2019
US$m US$m
By business:
Jardine Matheson 14,803 14,836
Hongkong Land 1,443 1,771
Dairy Farm 14,547 13,782
Mandarin Oriental 167 449
Jardine Cycle & Carriage 3,039 3,161
Astra 11,049 16,421
Intersegment transactions (112) (146)
------ ------
44,936 50,274
------ ------
3. Net Operating Costs
Six months ended 30th June
2020 2019
US$m US$m
Cost of sales (9,240) (11,740)
Other operating income 731 389
Selling and distribution costs (1,710) ( 1 ,795)
Administration expenses (960) (1,041)
Other operating expenses (138) (47)
-------- ---------
(11,317) (14,234)
-------- ---------
Included in other operating income were government grants,
the majority of which were in support of employee retention,
and rent concessions of US$49 million and US$33 million,
respectively, in relation to the COVID-19 pandemic for the
six months ended 30th June 2020.
Net operating costs included the following
gains/(losses) from non-trading items:
Change in fair value of other investments (89) 76
Sale of other businesses 418 -
Closure of a hotel - (32)
Other (4) 3
325 47
-------- ---------
4. Share of Results of Jardine Matheson
Six months ended 30th June
2020 2019
US$m US$m
By business:
Jardine Pacific 33 35
Jardine Motors 1 37
Corporate and other interests 13 899
----- -----
47 971
----- -----
Share of results of Jardine Matheson included
the
following gains/(losses) from non-trading
items:
Change in fair value of investment properties - 5
Change in fair value of other investments (1) (1)
Sale of Jardine Lloyd Thompson (note 9) - 874
Sale of property interests 6 -
Other - 2
5 880
----- -----
Results are shown after tax and non-controlling interests in
Jardine Matheson.
Included in share of results of Jardine Matheson were the
Group's share of the government grants, the majority of which were
in support of employee retention, and rent concessions of US$19
million and US$2 million, respectively, in relation to the COVID-19
pandemic for the six months ended 30th June 2020.
5 . Share of Results of Associates and Joint Ventures
Six months ended 30th June
2020 2019
US$m US$m
By business:
Jardine Matheson 8 58
Hongkong Land (89) 116
Dairy Farm 16 74
Mandarin Oriental (14) (2)
Jardine Cycle & Carriage 17 47
Astra 74 201
Corporate and other interests (5) -
7 494
----- -----
Share of results of associates and joint
ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties (135) (10)
Change in fair value of other investments 12 (6)
Asset impairment (67) -
Sale of businesses - 8
Other (2) -
(192) (8)
----- -----
Results are shown after tax and non-controlling interests in the
associates and joint ventures .
Included in share of results of associates and joint ventures
were the Group's share of the government grants, the majority of
which were in support of employee retention, and rent concessions
of US$22 million and US$16 million, respectively, in relation to
the COVID-19 pandemic for the six months ended 30th June 2020.
6 . Tax
Six months ended 30th June
2020 2019
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (256) (429)
Deferred tax 41 4 9
----- -----
(215) (380)
----- -----
(10 1
Greater China (64) )
( 275
Southeast Asia (150) )
United Kingdom 1 (1)
Rest of the world (2) (3)
----- -----
(215) (380)
----- -----
Tax relating to components of other comprehensive
income or expense is analysed as follows:
Remeasurements of defined benefit plans (1) -
Cash flow hedges 1 18
- 18
----- -----
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$8 million and tax
credit of US$1 million (2019: tax charge of US$7 million and Nil)
are included in share of results of Jardine Matheson and share of
other comprehensive expense of Jardine Matheson, respectively.
Share of tax charge of associates and joint ventures of US$93
million and tax credit of US$18 million (2019: tax charge of US$191
million and tax credit of US$12 million) are included in share of
results of associates and joint ventures and share of other
comprehensive expense of associates and joint ventures,
respectively.
7. (Loss)/profit Attributable to Shareholders
Six months ended 30th June
2020 2019
US$m US$m
Operating segments:
Jardine Matheson 117 149
Hongkong Land 178 235
Dairy Farm 81 136
Mandarin Oriental (80) 8
Jardine Cycle & Carriage 1 53
Astra 129 245
------- -----
426 826
Corporate and other interests (31) (47)
------- -----
Underlying profit attributable to shareholders* 395 779
Decrease in fair value of investment properties (1,360) (32)
Sale of Jardine Lloyd Thompson - 874
Other non-trading items 4 36
(Loss)/profit attributable to shareholders (961) 1,657
------- -----
* Underlying profit attributable to shareholders is the measure
of profit adopted by the Group in accordance with IFRS 8 'Operating
Segments'.
8 . Earnings/(loss) per Share
Basic loss per share are calculated on loss attributable to
shareholders of US$961 million (2019: profit of US$1,657 million)
and on the weighted average number of 560 million (2019: 565
million) shares in issue during the period.
Diluted loss per share are calculated on loss attributable to
shareholders of US$961 million (2019: profit of US$1,657 million),
which is after adjusting for the effects of the conversion of
dilutive potential ordinary shares of Jardine Matheson and
subsidiaries, and on the weighted average number of 560 million
(2019: 565 million) shares in issue during the period.
The weighted average number of shares is arrived at as
follows:
Ordinary shares
in millions
2020 2019
Weighted average number of shares in issue 1,108 1,108
Company's share of shares held by Jardine ( 543
Matheson (548) )
------------ ------------
Weighted average number of shares for
e arnings per share calculation 560 565
------------ ------------
Additional basic and diluted earnings per share are also
calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
Six months ended 30th June
2020 2019
Basic Diluted Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
(Loss)/profit attributable
to shareholders (961) (1.72) (1.72) 1,657 2.93 2 .93
Non-trading items (note
9 ) 1,356 (878)
----- ------
Underlying profit
attributable
to shareholders 395 0.71 0.71 779 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
2020 2019
US$m US$m
By business:
Jardine Matheson (63) 880
Hongkong Land (1,099) (28)
Dairy Farm 8 1
Mandarin Oriental (261) (18)
Jardine Cycle & Carriage (17) 15
Astra 140 -
Corporate and other interests (64) 28
(1,356) 878
------- -----
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 (1,099) (44)
- other (261) 12
------- -----
(1,360) (32)
Change in fair value of other investments (74) 52
Asset impairment (67) -
Sale of Jardine Lloyd Thompson - 874
Sale of other businesses 141 6
Sale of property interests 6 -
Closure of a hotel - (24)
Other (2) 2
(1,356) 878
------- -----
The sale of Jardine Matheson's 41% interest in Jardine Lloyd
Thompson was completed in April 2019 with net proceeds of US$2.1
billion generating a profit on sale of US$0.9 billion to the
Group.
10 . Dividends
Six months ended 30th June
2020 2019
US$m US$m
Final dividend in respect of 2019 of USc
25 .00
(2018: USc 24.0 0) per share 277 266
Company's share of dividends paid on the ( 130
shares held by Jardine Matheson (137) )
----- -----
140 136
----- -----
An interim dividend in respect of 2020 of USc10.50 (2019:
USc10.50) per share amounting to a total of US$116 million (2019:
US$116 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 (2019: US$57
million) will be accounted for as an appropriation of revenue
reserves in the year ending 31st December 2020.
11 . Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities,
together with carrying amounts at 30th June 2020 and 31st December
2019 are as follows:
Fair
value Fair value Financial
through through assets
Fair value profit other at Other Total
of hedging and comprehensive amortised financial carrying Fair
instruments loss income costs liabilities amount value
US$m US$m US$m US$m US$m US$m US$m
30th June 2020
Financial assets
measured at fair
value
Other investments
* equity investments - 1,962 - - - 1,962 1,962
* debt investments - - 616 - - 616 616
Derivative financial
instruments 109 - - - - 109 109
----------- -------
109 1,962 616 - - 2,687 2,687
----------- ------- ------------- ----------- ----------- -------- --------
Financial assets not
measured at fair value
Debtors - - - 7,326 - 7,326 7,352
Bank balances - - - 6,762 - 6,762 6,762
----------- ------- ------------- ----------- ----------- -------- --------
- - - 14,088 - 14,088 14,114
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
measured at fair value
Derivative financial
instruments (153) - - - - (153) (153)
Contingent consideration
payable - (9) - - - (9) (9)
----------- ------- ------------- ----------- ----------- -------- --------
(153) (9) - - - (162) (162)
----------- ------- ------------- ----------- ----------- -------- --------
Financial liabilities
not measured at fair
value
Borrowings - - - - (16,056) (16,056) (16,294)
Lease liabilities - - - - (3,600) (3,600) (3,600)
Trade and other
payable excluding
non-financial liabilities - - - - (5,151) (5,151) (5,151)
----------- ------- ------------- ----------- ----------- -------- --------
- - - - (24,807) (24,807) (25,045)
----------- ------- ------------- ----------- ----------- -------- --------
Fair
value Fair value Financial
through through assets
Fair value profit other at Other Total
of hedging and comprehensive amortised financial carrying Fair
instruments loss income costs liabilities amount value
US$m US$m US$m US$m US$m US$m US$m
31st December
2019
Financial assets
measured at
fair value
Other investments
* equity investments - 2, 035 - - - 2, 035 2, 035
* debt investments - - 669 - - 669 669
Derivative financial
instruments 48 - - - - 48 48
----------- -------
48 2, 035 669 - - 2, 752 2, 752
----------- ------- ------------- ----------- ----------- -------- -------
Financial assets
not measured at
fair value
Debtors - - - 7,953 - 7,953 8,039
Bank balances - - - 5 ,602 - 5 ,602 5 ,602
----------- ------- ------------- ----------- ----------- -------- -------
- - - 13,555 - 1 3 ,555 13,641
----------- ------- ------------- ----------- ----------- -------- -------
Financial liabilities
measured at
fair value
Derivative financial ( 144 ( 144
instruments (144) - - - - ) )
Contingent consideration (1 9 (1 9 (1 9
payable - ) - - - ) )
----------- ------- ------------- ----------- ----------- -------- -------
( 144 (1 9 (1 63 (1 63
) ) - - - ) )
----------- ------- ------------- ----------- ----------- -------- -------
Financial liabilities
not measured at
fair value
(14, 894 (14, (15,
Borrowings - - - - ) 894 ) 082 )
(3 ,637 (3 ,637
L ease liabilities - - - - (3,637) ) )
Trade and other
payable excluding
non-financial
liabilities - - - - (6,627) (6,627) (6,627)
----------- ------- ------------- ----------- ----------- -------- -------
(25,15 (25,15 (25,34
- - - - 8 ) 8 ) 6 )
----------- ------- ------------- ----------- ----------- -------- -------
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 2020 and the year ended 31st December 2019
.
The table below analyses financial instruments carried at fair
value at 30th June 2020 and 31st December 2019, 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$m
30th June 2020
Assets
Other investments
-------- ------------ ------------ ------
- equity investments 1,596 11 355 1,962
- debt investments 616 - - 616
2,212 11 355 2,578
Derivative financial instruments
at fair value
* through other comprehensive income - 81 - 81
* through profit and loss - 28 - 28
2,212 120 355 2,687
-------- ------------ ------------ ------
Liabilities
Contingent consideration
payable - - (9) (9)
Derivative financial instruments
at fair value
* through other comprehensive income - (153) - (153)
- (153) (9) (162)
-------- ------------ ------------ ------
31st December 2019
Assets
Other investments
-------- ------------ ------------ ------
- equity investments 1,667 12 356 2, 035
- debt investments 669 - - 669
2, 336 12 356 2,704
Derivative financial instruments
at
fair value
- through other comprehensive
income - 37 - 37
* through profit and loss - 11 - 11
2, 336 60 356 2, 752
-------- ------------ ------------ ------
Liabilities
Contingent consideration
payable - - (1 9 ) (1 9 )
Derivative financial instruments
at
fair value
(1 40
* through other comprehensive income - (140) - )
* through profit and loss - (4) - (4)
- (144) (1 9 ) (163)
-------- ------------ ------------ ------
There were no transfers among the three categories during the
six months ended 30th June 2020 and the year ended 31st December
2019.
Movement of financial instruments which are valued based on
unobservable inputs during the six months ended 30th June 2020 and
year ended 31st December 2019 are as follows:
Unlisted
equity
investments
US$m
At 1st January 201 9 248
Exchange differences 10
Additions 112
Disposals (16)
Net change in fair value during the
year included in profit and loss 2
At 31st December 2019 and 1st January
2020 356
Exchange differences (9)
Additions 8
------------
At 30th June 2020 355
------------
(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.
1 2 . Notes to Consolidated Cash Flow Statement
(a) Purchase of associates and joint ventures for the six months
ended 30th June 2020 mainly included US$127 million for Hongkong
Land's investments primarily in Chinese mainland.
Purchase for the six months ended 30th June 2019 mainly included
US$254 million for Hongkong Land's investments primarily in Chinese
mainland; 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.
(b) Purchase of other investments for the six months ended 30th
June 2020 mainly included Astra's acquisition of securities.
Purchase 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.
(c) Additions to investment properties for the six months ended
30th June 2020 primarily included Hongkong Land's acquisition of a
mixed-use site along the Huangpu River in the Xuhui District in
Shanghai ('West Bund project') for a cost of US$4.5 billion.
Subject to relevant approvals by the authorities, Hongkong Land had
conditionally finalised agreements with two partners to jointly
develop the West Bund project, receiving an advance of US$2.3
billion in the first half of 2020 and a further advance of US$320
million in July 2020.
(d) Advance to and repayment to associates and joint ventures
for the six months ended 30th June 2020 included US$116 million for
Hongkong Land's advance to its property joint ventures and US$23
million for Mandarin Oriental's advance to its associate and joint
venture hotels.
Advance for the six months ended 30th June 2019 mainly included
Hongkong Land's advance to its property joint ventures.
(e) Advance from and repayment from associates and joint
ventures for the six months ended 30th June 2020 and 2019 mainly
included advance from and repayment from Hongkong Land's property
joint ventures.
(f) Sale of associates and joint ventures for the six months
ended 30th June 2020 mainly included US$1,136 million for Astra's
sale of Permata Bank.
(g) Sale of other investments for the six months ended 30th June
2020 and 2019 mainly included Astra's sale of securities.
(h) Change in interests in subsidiaries
Six months ended
30th June 2019
US$m
Increase in attributable interests
- Mandarin Oriental (5)
- other (3)
( 8 )
--------------
1 3 . Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2020 and 31st December
2019 amounted to US$5,287 million and US$2,878 million,
respectively. The capital commitments at 30th June 2020 included
US$2,642 million for the West Bund project in Hongkong Land.
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.
1 4 . Related Party Transactions
The ultimate holding company of the Group is Jardine Matheson
Holdings Limited ('Jardine Matheson'), a company incorporated in
Bermuda. As at 30th June 2020, the Company held a 58% (31st
December 2019: 58%) interest in Jardine Matheson.
In accordance with the Bye-laws of the Company, Jardine Matheson
Limited, a wholly-owned subsidiary of Jardine Matheson has been
appointed as 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 2020
amounted to US$50 million (2019: 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 2020 amounted to US$1,550 million
(2019: US$2,577 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 2020 amounted to US$187
million (2019: US$312 million).
There were no other related party transactions that might be
considered to have a material effect on the financial position or
performance of the Group that were entered into or changed during
the first six months of the current financial year.
Amounts of outstanding balances with Jardine Matheson,
associates and joint ventures are included in debtors and
creditors, as appropriate.
15. Market Value Basis Net Assets
At 30th At 31st
June December
2020 2019
US$m US$m
Jardine Matheson 8,641 8,973
Hongkong Land 4,859 6,765
Dairy Farm 4,881 5,993
Mandarin Oriental 1,492 1,799
Jardine Cycle & Carriage 4,289 6,622
Other holdings 552 610
------- ---------
24,714 30,762
Jardine Strategic Corporate 2,551 1,733
------- ---------
27,265 32,495
------- ---------
US$ US$
Net asset value per share 48.71 57.98
------- ---------
'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$17,820 million
(2019: US$23, 738 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$27,265 million (2019: US$32,495 million) and on
560 million (2019: 5 61 million) shares outstanding at the period
end which excludes the Company's share of the shares held by
Jardine Matheson of 549 million (2019: 548 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 142 of the Company's
2019 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
John Witt
Y.K. Pang
Directors
Dividend Information for Shareholders
The interim dividend of USc 10.50 per share will be payable on
14th October 2020 to shareholders on the register of members at the
close of business on 21st August 2020. The shares will be quoted
ex-dividend on 20th August 2020 and the share registers will be
closed from 24th to 28th August 2020, inclusive. The dividend will
be available in cash with a scrip alternative.
Shareholders will receive their cash dividends in United States
Dollars, except when elections are made for alternate currencies in
the following circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register will have
the option to elect for their dividends to be paid in Sterling.
These shareholders may make new currency elections for the 2020
interim dividend by notifying the United Kingdom transfer agent in
writing by 25th September 2020. The Sterling equivalent of
dividends declared in United States Dollars will be calculated by
reference to a rate prevailing on 30th September 2020.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in Sterling only as
calculated above.
Shareholders on the Singapore branch register who hold their
shares through T he Central Depository (Pte) Limited ('CDP')
Shareholders who are on CDP's Direct Crediting Service
('DCS')
For those shareholders who are on CDP's DCS, they will receive
their cash dividends in Singapore Dollars unless they opt out of
CDP Currency Conversion Service, through CDP, to receive United
States Dollars.
Shareholders who are not on CDP's DCS
For those shareholders who are not on CDP's DCS, they 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 21st August 2020, 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 20th August 2020.
About 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, health and beauty, home furnishings, engineering and
construction, transport services, restaurants, luxury hotels,
financial services, heavy equipment, mining, energy 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
Graham Baker (852) 2843 8218
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 SDUSASESSEDW
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