TIDMJAR
RNS Number : 5280D
Jardine Matheson Hldgs Ltd
03 March 2022
To: Business Editor 3rd March 2022
For immediate release
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
Jardine Matheson Holdings Limited
2021 Preliminary Announcement of Results
Encouraging recovery despite continuing challenging
conditions
Headlines
-- Underlying net profit up 39% against 2020, 5% below 2019
-- Increased earnings per share and enhanced corporate governance
through simplification of Group's parent company structure
-- Underlying earnings per share US$4.83, up 64% against
prior year and 14% higher than 2019
-- Good recovery in Southeast Asia, led by Astra
-- Motors business performs strongly, led by Zhongsheng and
UK Motors
-- Mandarin Oriental sees strong recovery with underlying
loss significantly reduced
-- DFI Retail transformation offsets continued operating
challenges, but results impacted by associate Yonghui's
substantial loss
-- Full year dividend at US$2.00, up 16%
"Jardines faced major challenges in 2021 as a result of the
ongoing pandemic, but the dedication and hard work of our
colleagues across the Group enabled us to continue to adapt to the
changing trading environment and deliver significant improvements
in the underlying performance of our businesses. The Company also
deployed substantial levels of capital to acquire 100% of Jardine
Strategic, which both enhanced corporate governance and created
significant value for our shareholders, while also increasing the
Group's operational and financial flexibility . I want to thank
everyone across the Group for their commitment to our customers and
our businesses in the face of considerable challenges.
High levels of uncertainty remain this year, given the
continuing impact of the pandemic. We remain confident, however, in
our long-term strategy, rooted in Hong Kong and the growth markets
of Asia."
Ben Keswick, Executive Chairman
Results summary
Year ended 31st December
2021 2020 Change
US$m US$m %
-------------------------------------------------- --------------- ------------------ ------
Gross revenue including 100% of
associates and joint ventures 109,370 90,906 +20
Revenue 35,862 32,647 +10
Underlying profit before tax* 4,117 2,786 +48
Underlying profit attributable
to shareholders * 1,513 1,085 +39
Profit/(loss) attributable to shareholders 1,881 (394) n/a
Shareholders' funds 29,781 29,387 +1
US$
--------------- ------------------
Underlying earnings per share* 4.83 2.95 +64
Earnings/(loss) per share 6.01 (1.07) n/a
Dividends per share 2.00 1.72 +16
* 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 40
to the financial statements. Management considers this to
be a key measure which provides additional information to
enhance understanding of the Group's underlying business performance.
Improvements to underlying profit attributable to shareholders
and underlying earnings per share benefitted from the impact
of the Company's acquisition of the remaining 15% minority
interest in Jardine Strategic. Excluding the impact of this
Group simplification, increases in underlying net profit and
underlying earnings per share in 2021 were 29% and 32%, respectively.
The final dividend of US$1.56 per share will be payable on 11th
May 2022, subject to approval at the Annual General Meeting to be
held on 5th May 2022, to shareholders on the register of members at
the close of business on 18th March 2022 and will be available in
cash with a scrip alternative .
Jardine Matheson Holdings Limited (the 'Company')
2021 Preliminary Announcement of Results
Chairman's Statement
2021 in Review
2021 was a further year of exceptional challenge for colleagues
across the Group, who have continued to be impacted both personally
and professionally by the pandemic. The Group's ability to continue
to thrive in the difficult environment created by COVID-19 can only
be achieved with the commitment of the huge number of people who
work for Jardines, as well as the Group's many partners across all
its markets. I want to start by thanking each and every one of
them.
I also want to recognise the adaptability our colleagues have
shown to a fast pace of change and new ways of working. I am
especially proud of our frontline staff, who have put the needs of
customers first despite everything.
The resilience the Group demonstrated in 2021 reflects our long
track record of successfully navigating change and challenge
throughout the past 190 years. We are confident that we will be
able to continue to take advantage of the best long-term
opportunities in Asia, while adapting to the changing external
environment and evolving expectations of our stakeholders.
Performance
The Group's underlying net profit for the year rose by US$428
million (39%) to US$1,513 million. The increase was primarily
driven by a stronger contribution from Astra, a recovery in the
performance of Mandarin Oriental and improved contributions by the
Group's Motors business (including its stake in Zhongsheng) and its
Southeast Asian businesses held by Jardine Cycle & Carriage.
There were also resilient performances by Hongkong Land and the
Group's unlisted Jardine Pacific businesses. The profits of DFI
Retail Group ('DFI Retail') were reduced by the impact of the
significant loss made by its associate Yonghui.
While a large part of the increase in the Group's profit was due
to improvements in the underlying performances of most of our
businesses, results also benefitted from the impact of the Group
simplification which was completed in April 2021. This overall
improvement in performance is encouraging, although the Group's
results were 5% behind those of 2019, before the pandemic
began.
The financial and operational strength of the Group's businesses
continues to be supported by its investment strategy and approach
to capital allocation. The Board keeps its portfolio of businesses
under review and regularly assesses whether action is necessary to
ensure that the Group's activities remain aligned with its
strategic priorities. Despite the short-term challenges of the
pandemic, the Board sees it as essential to continue to invest for
the long-term in business opportunities which will drive future
growth.
The Board is recommending an increased final dividend of US$1.56
per share, which produces a full-year dividend of US$2.00 per
share, up 16% from the prior year.
Significant Developments
In April 2021 we completed the simplification of the Group's
parent company structure by acquiring the 15% of the issued share
capital of Jardine Strategic Holdings Limited ('Jardine Strategic')
that the Company did not already own. We emphasised at the time
that the transaction was a natural step in the evolution of the
Group and would create value for shareholders. We also said that it
was consistent with our policy of investing further in the growth
prospects of our existing businesses. As we highlighted at the
time, the transaction has delivered a range of benefits to the
Group, including a material enhancement to earnings attributable to
shareholders, the creation of a conventional ownership structure
for the Group and increased financial and operational
flexibility.
The Group has a long history of building partnerships and
developing businesses across Asia, which has seen great success
with some of the largest brand owners over many years. The Group's
regional network and connections create a real advantage as we work
with our Group companies to evolve their businesses and position
them well for future growth. We place great importance on building
and maintaining strong relationships with governments and other key
stakeholders in the markets where we operate.
We have seen it as essential to continue to focus on these
relationships even when the pandemic has made the practicalities of
doing so more difficult. In this context, last autumn I travelled
to the Chinese mainland and spent nearly two months visiting our
businesses there and meeting with a wide range of business partners
and senior government representatives.
We have also successfully strengthened our strategic partnership
with the founders of Zhongsheng, a leading China motor dealership
group, which we have focussed on developing since first acquiring
an interest in the business in 2014. In late 2021, we sold our Zung
Fu China business to Zhongsheng, as a result of which we have
further increased the Group's interest in Zhongsheng, a highly
resilient, cash-generative business.
Sustainability
We believe that real value can be realised from integrating
sustainability in the strategy and business models of our Group
companies, and that it is increasingly important for each of our
businesses to consider sustainability issues in all aspects of
their decision-making.
We are aiming to create real scale in our sustainability
efforts, and believe that we can add more value as a group of
businesses working together than by each business pursuing their
own agendas without alignment.
Jardines has made significant progress over the past year in
building a strong level of engagement between our businesses on
sustainability issues. Our Sustainability Leadership Council, whose
members are the leaders of each of our businesses, has helped
create alignment among them on the Group's sustainability strategy
and agenda. Each of our Group companies is pursuing their own
sustainability strategy, tailored to their business and sector, as
well as the interests of their stakeholders, while following an
approach which is aligned with that of the Group.
The Group works closely with each of its businesses to help them
as they implement their sustainability strategies, providing
support, guidance and resource as appropriate. We have also put in
place cross-Group working groups to support each of the pillars of
the Group's sustainability strategy, facilitating collaboration
between Group companies and providing a governance framework to
support the execution of our sustainability strategy.
We have over the past year developed a set of 10 key metrics
against which each of our businesses is measuring itself, and which
we are collating in order to form a Group-wide picture of our
sustainability performance, which will be disclosed in our first
Group Sustainability Report, to be published later in the first
half of the year.
Governance
We have continued our focus in the last year on enhancing our
approach to corporate governance. The completion in April 2021 of
the acquisition of the minority stake in Jardine Strategic led to a
simplification of the Group's holding company structure.
We have also led a series of enhancements to the governance of
our listed subsidiaries. This has included a series of changes to
strengthen our boards, with new independent non-executive directors
with sector expertise and experience appointed to the boards of
Dairy Farm International Limited, Mandarin Oriental International
Limited and Hongkong Land Holdings Limited, generally reducing
their size and increasing their diversity. At the same time as
making these board changes, we have established formal audit,
remuneration and nominations committees at the listed company
level.
People
Alex Newbigging stepped down from the Board of the Company on
31st December 2021. As announced on 3rd March 2022, Jeremy Parr
will be retiring from the Board on 31st March 2022. On behalf of
the Company, I would like to thank both of them for their
contribution to the Board and the wider Group.
Conclusion
2021 was another year of exceptional challenge for colleagues
across the Group, who have continued to be impacted both personally
and professionally over the past year. I want to thank all our
colleagues across the Group for their commitment to our customers
and our businesses in the face of considerable challenges, as well
as their flexibility and willingness to embrace change, to enable
the business to achieve a significant improvement in its underlying
performance.
The resilience the Group demonstrated in 2021 reflects our long
track record of successfully navigating change and challenge. We
are confident that this resilience will enable us to continue to
take advantage of the best long-term opportunities in Asia, while
adapting to the changing external environment and evolving
expectations of our stakeholders.
Ben Keswick
Executive Chairman
Group Managing Director's Review
Introduction
2021 has been another challenging year for Jardines, and our
people have had to continue to deal with the obstacles presented by
the global pandemic. I would like to thank each of them for their
dedication and hard work, often in very challenging
circumstances.
COVID-19 and its economic consequences have had a devastating
effect in all our markets, and we have intensified our focus on
ensuring the health and wellbeing of our communities, customers and
colleagues.
Protecting and ensuring the wellbeing of our colleagues has been
a top priority throughout the year, with a particular focus on
encouraging colleague vaccination. We have also continued to
encourage flexible working practices and made health and safety a
top priority. Colleagues across our businesses continue to be hit
by COVID-19, and a major focus of our efforts has been to support
them and keep them safe. We have given colleagues access to support
and resources to address mental health issues.
Our businesses have also been taking action to support their
partners and the communities in which they operate, to help them
meet the challenges of the pandemic. In our communities, this has
included extensive corporate social responsibility support.
The COVID-19 pandemic has led to a tightened talent market and
growing salary inflation, which makes retaining great Jardines
people both a challenge and a high priority. We are working with
our businesses to address this challenge as effectively as
possible.
Another area where Jardines plays an important role in creating
alignment across the Group is the promotion of diversity and
inclusion. We are working with our businesses to increase the
diversity of the boards and senior management of our Group
companies. A key element of this is the successful nurturing of
colleagues at all levels, in order to development diverse pools of
talent from which our future senior leaders can be selected.
The past year has demonstrated how important it is for Jardines
to apply innovation and adaptability in its approach to business.
We have made good progress in modernising the core of our
businesses and changing how we do business to reflect the evolving
environment in which we find ourselves. The pace of change is
continuing to accelerate, however, so we need to drive forward our
strategic priorities with real pace in the coming year. These
priorities and how we are progressing them are set out below.
Evolving the Group Portfolio
Ensuring that our business is sustainable and grows earnings
over the long-term is of the utmost importance for the Group, and
we therefore need to continue to evolve the portfolio to achieve
this. This includes deploying capital towards strategic higher
growth initiatives, while prudently divesting lower-yielding
non-strategic assets. This approach is being taken both at a Group
level and within our individual Group companies.
We have continued to actively manage our portfolio to build our
presence in the more attractive markets of Asia and in businesses
where we can achieve market leading positions, in order to maintain
growth and create long-term sustainable value. The healthy
geographic diversification we have with presence in China and
Southeast Asia, as well as our balance of businesses across
sectors, continues to underpin our resilient performance in
challenging market conditions.
We continue to focus on expanding the Group's businesses in
those areas which we see as offering the most opportunities for
future growth. These include the Chinese mainland and a number of
ASEAN markets. We have made significant capital investments in
these markets. In the Chinese mainland we are focussed on
developing our automotive interests, retail and property
development. We also foresee strong future growth in a number of
developing ASEAN markets, in particular Indonesia and Vietnam. We
aim to align with key trends in these markets, including the
developing middle class and increasing urbanisation, in developing
our businesses there. We also continue to see growth opportunities
in developed markets including Hong Kong and Singapore, which
provide a stable core and a strong asset and cashflow base.
The Group's capital allocation framework prioritises organic
investment in its portfolio to drive long-term growth and returns,
underpinned by the continued payment of dividends, which it aims to
grow over time. The Group then focusses on investing in new
business opportunities as well as carrying out share buybacks in
its Group companies where appropriate. The framework is grounded in
a strong balance sheet which provides resilience through the
business cycle. We are also increasingly seeking to ensure that our
investments align with the objectives of our sustainability
strategy.
This prudent capital allocation approach underpinned the
acquisition by the Company in April 2021 of the 15% minority stake
in Jardine Strategic that it did not already own. This resulted in
Jardine Matheson increasing its interest in Hongkong Land, DFI
Retail, Mandarin Oriental, Jardine Cycle & Carriage and Astra,
as well as simplifying the Group's ownership structure and
governance framework. The acquisition was funded in part by debt
facilities.
In the balance of the year after the completion of the
acquisition, we prioritised debt reduction ahead of further,
material new investments. The second half of the year saw two
significant strategic disposals - the sale of the Zung Fu China
business to our long-term partner in China, Zhongsheng, and the
sale and leaseback of the Zung Fu Hong Kong properties. These
transactions, which together realised net cash proceeds of US$1.5
billion, enabled the Company to reduce its net debt to US$1.3
billion by the end of 2021. The Company's remaining debt is funded
by US$1.2 billion of 10 and 15 year long-term fixed rate debt,
ensuring that its balance sheet remains robust and flexible.
The Company continued in 2021 to seek mutually beneficial and
enduring partnerships with leading businesses in our markets, to
support our growth plans. Last year, we announced the Group's
strategic co-operation with Hillhouse Capital, a leading Asian
private equity firm, that deploys technology to drive innovation in
its portfolio companies, with sustainable, long-term growth as its
primary goal. The strategic co-operation enables both of our
companies to partner on mutually beneficial investment and business
development opportunities predominantly in China, as well as
Southeast Asia. The partnership is progressing well and is already
resulting in discussion of a number of co-investment
opportunities.
The Group is focussed on developing and implementing its
portfolio strategy and on increasing its decision-making agility,
so we can act with speed to seize opportunities when they arise and
maximise our portfolio value.
Driving Innovation and Operational Excellence
We are focussed on driving operational excellence in our
businesses and in new ventures we undertake, and the past year has
seen real progress achieved by our businesses in driving greater
efficiency and productivity, despite the challenging market
environment. DFI Retail's multi-year transformation plan is
delivering real improvements in underlying performance across its
banners, and we have seen strong growth in Mandarin Oriental's
hotel and residences management business. Business improvement
initiatives were completed in the year in JEC, Gammon, HACTL,
Jardine Restaurants and a number of other companies, with a
positive impact on results. The increased efficiencies which these
initiatives create help our businesses navigate the challenges
posed by the pandemic and prepare for future growth.
Our businesses have also accelerated the pace at which they
embrace digital ways of working to improve operations. Leveraging
increased robotics at HACTL's cargo terminal and embracing digital
twins in Gammon's construction business, as well as building modern
warehouse and delivery capabilities for DFI Retail have helped our
businesses navigate the challenges posed by the pandemic and
prepare for future growth.
As the Asian consumer appetite for digital continues to
increase, our B2C businesses are heavily focussed on embedding
digital as a core component of how we anticipate and serve their
needs - developing omnichannel experiences, building data
capabilities and embracing start-ups to augment our capabilities to
react with speed and agility to the changing marketplace.
A good example of this is DFI Retail's yuu rewards platform,
with almost 4 million members, which has gone from strength to
strength this year and is helping us move beyond a transactional
focus to drive new ways of meeting and anticipating individual
customer needs and preferences, by embedding e-commerce into the
loyalty platform, embracing new partnerships such as those with
insurance and fuel companies. DFI Retail has also expanded its
e-commerce offering in Southeast Asia with the launch of the CART
app in Singapore. Mandarin Oriental has also made good progress in
developing new ways of using digital and data to enhance the guest
experience on property through wide adoption of a guest messaging
service, Hello MO, and by accelerating its Fans of MO recognition
programme, which has now passed the milestone of one million
members. Our restaurant business saw peaks of 90% of sales coming
through digital channels in some locations in 2021.
Our B2B businesses have enthusiastically embraced digital as a
mechanism to anticipate, verify and exceed customer expectations.
Gammon (an early embracer of building information modelling) now
has one of the largest Virtual Design & Construction (VDC)
teams in Hong Kong and Shenzhen. By undertaking digital
prototyping, Gammon can validate and optimise the design and
construction sequence, ensuring the project is delivered to the
highest standard.
We continue to seek new inorganic growth opportunities which
complement our current businesses or enable our wider participation
in the digital economy. We look for partnership and investment
opportunities to increase exposure to the digital economy, emerging
industries and new geographies. In 2021, JEC acquired the Hong Kong
and Macau business of MGI Group Holdings Limited, a leading
specialty healthcare engineering solutions provider. We also
invested in PickUpp, a leading smart logistics and delivery
business, and Halodoc, a telehealth provider in Indonesia. We need
to build on the progress we have made so far to develop more new
partnerships in this space.
Enhancing Leadership and Entrepreneurialism
We place a high importance on a ttracting, developing and
retaining leadership talent, and we also support our Group
companies as they do the same. The past year has seen the making of
a series of key senior appointments by our Group companies to
strengthen their leadership and help drive future growth. These
included the external appointment of a new Chief Commercial Officer
by Mandarin Oriental and a new Chief Executive, Digital by DFI
Retail. These leaders have in turn been hiring top quality talent
into their areas. We also continued to demonstrate our commitment
to developing our leaders and providing them with opportunities to
progress their careers within a range of different businesses
across the Group, with over a dozen executive level senior
management moves taking place in the period across our
businesses.
We are focussed on providing our colleagues with appropriate
training and other support to equip them with the right skills to
navigate the challenges and opportunities they face, both in the
short term in the context of COVID-19 and for the longer-term. The
comprehensive programme of online learning and academies across the
Group has seen high levels of participation in the year.
As we grow, it is essential that we maintain a high pace of
change and foster a culture of entrepreneurialism across our
businesses. Some good examples of this in action have been the
expansion of DFI Retail's own brand offering, the rollout by JEC of
its JEDI sustainable building management solution; and Astra-IKEA's
development of its digital analytics 'next product to buy'
capability.
Progressing Sustainability
In 2021 we drove a more aligned, focussed approach to
sustainability across all our Group companies, leveraging and
building on the work many of them were already doing in this area
to maximise the impact we have in our communities and on the
environment.
Great progress was made in the year in putting in place the key
frameworks for delivering the Group's sustainability agenda. This
included setting metrics to be measured by each of our businesses
and communicated for the Group as a whole, as well as establishing
working groups to support each of the three pillars of our strategy
and drive collaboration and action across our Group businesses.
We also strengthened the capability of the Group in relation to
sustainability by the appointment of a Head of Sustainability, and
we are well placed to provide guidance and support to our Group
businesses as they take forward their sustainability agendas. Most
of our businesses also strengthened their sustainability resources
during the year, and we will be creating a community of expertise
in this area across the Group in the coming months.
We are focussed on actively sharing the positive actions our
diverse businesses are taking in this area, by reporting more
effectively on ESG (environmental, social and governance) issues,
and we will be publishing our first Group sustainability report
later in the first half of this year.
Creating emotional engagement among our colleagues and other
stakeholders is a key aspect of implementing an impactful and
effective sustainability approach, and this was a focus of our
sustainability efforts during the year, as we developed a
Group-wide volunteering programme, which we launched in December.
We will be working across our Group businesses in the coming year
to encourage colleague engagement across our sustainability agenda,
including high levels of take-up for volunteering
opportunities.
Summary of Performance
Jardine Matheson delivered encouraging performance in 2021, with
most of its businesses achieving better results than last year,
although COVID-19 restrictions continue to impact trading
conditions in a number of markets. The Group's underlying net
profit for the year increased by 39% to US$1,513 million, with
underlying earnings per share up 64% to US$4.83. This was 10% above
the Group's record earnings per share of US$4.40 in 2018, following
the completion of the Group simplification in April 2021.
There were strong contributions from Astra, which saw improved
performances in most of its divisions; Jardine Cycle &
Carriage, whose Motor and other interests across Southeast Asia
delivered better results; and the Group's Motors interests, which
saw a higher contribution from the interest in Zhongsheng (more
than 10% of the Group's total earnings) as well as stronger
performance in our UK and Hong Kong operations.
Mandarin Oriental continued to be materially impacted by the
pandemic and the resulting reduction in travel, but saw a
significantly reduced annual loss, due to a modest recovery outside
Asia and the benefits of careful costs management.
Jardine Pacific delivered improvements in the underlying
performance of most its businesses, but reported results were
slightly lower than last year due to a focus on operational
improvements.
Hongkong Land delivered a resilient performance in 2021 despite
the continued impact of the pandemic, with the results from
Investment Properties in line with last year, while Development
Properties delivered an improved contribution due to higher
residential sales completions, against the backdrop of an
increasingly challenging environment.
DFI Retail's contribution was considerably lower than the
previous year, with profit impacted by a material loss in its
21.08%-owned associate, Yonghui. The group also continued to face
challenging trading conditions due to a lack of tourists in Hong
Kong and pandemic restrictions, which impacted store operations,
customer numbers and consumer behaviours. Results also reflected a
lower level of government support than last year. Excluding the
Yonghui impact, however, performance was relatively resilient
compared with the previous year.
Net non-trading items were positive, versus a negative position
last year. A large proportion of the non-trading gain resulted from
transactions - including a US$791 million gain on the disposal of
the Zung Fu China business and a US$337 million gain on the sale
and leaseback of Zung Fu Hong Kong's principal operating
properties. These gains were offset by an unrealised US$664 million
loss in respect of the revaluation of the value of the Hongkong
Land's Investment Properties portfolio.
Ja rdine Matheson's diversified portfolio of market-leading
businesses is focussed principally on two of the regions that are
most driving global growth: China and Southeast Asia. In 2021, the
split between China and Southeast Asia reverted to more historic
norms, with 55% of the Group's underlying profit coming from China
(compared with 73% in 2020), and 42% coming from Southeast Asia
(compared with 34% in 2020).
The Group's balance sheet remains strong with gearing of 11%, up
from 6% at the end of 2020, reflecting the acquisition of Jardine
Strategic and subsequent strategic disposals.
The Group's capital investment, including expenditure on
properties for sale, was US$10.3 billion in 2021, and capital
investment at its associates and joint ventures exceeded US$4.7
billion. The Group continues to invest for the long-term and ensure
that its businesses have the resources to drive future growth.
Individual Business Performance
Jardine Pacific
Jardine Pacific produced an underlying net profit of US$175
million, 4% lower than 2020. Most businesses, however, saw an
improvement in their underlying performance in 2021. Net profit
after net non-trading gains of US$389 million was US$564
million.
Jardine Pacific businesses received total government subsidies
of US$9 million in 2021, compared with US$88 million in 2020.
There was significant focus in the year across Jardine Pacific's
businesses in driving operational improvements. The benefits are
now starting to be seen in improved business performance and the
group is well set for future growth.
Group Group Share of
Interest Underlying profit
% 2021 2020
US$m US$m
----------- ----------- ---------
Analysis of Jardine Pacific's contribution:
Jardine Schindler 50 32 32
JEC 50 -100 49 51
Gammon 50 39 38
Jardine Restaurants 100 27 32
Transport Services 42-50 31 24
Zung Fu Hong Kong* 100 4 -
Corporate and other interests (7) 5
--- ---
175 182
--- ---
* Zung Fu Hong Kong was reported as part of the Jardine Pacific
group of businesses with effect from October 2021.
Jardine Restaurants saw profits fall by US$5 million. Solid
delivery sales in Taiwan and the benefits realised from ongoing
process re-engineering projects were offset by the impact of the
resurgence of the pandemic in some markets, as well as increasing
supply chain costs. The business received lower government
subsidies than in 2020. JEC delivered a slightly lower contribution
than in 2020, mainly due to the absence of government subsidies
compared with 2020. There was a good performance from the Hong Kong
engineering units, but the businesses in Thailand and Singapore
were impacted by the pandemic. JEC recently completed the
acquisition of a healthcare engineering solutions provider,
strengthening its position in the sector.
Gammon's profit contribution was slightly higher than the
previous year, due to improved margins and project timing, and the
business also benefitted from the lower impact from COVID-19 in
Hong Kong. Jardine Schindler reported profits in line with the
previous year, with better performance in its new and existing
installation businesses, while markets remained very
competitive.
In Transport Services, HACTL's performance was slightly higher
than 2020. The business saw high levels of cargo throughput as it
benefitted from the continuing strong demand in the global air
cargo industry. Jardine Aviation Services saw a US$7 million
improvement in results, recording a small loss, mainly due to lower
staff costs and depreciation from the 2020 restructuring, plus the
release of a customer bad debt provision. The results of the
business were also partly offset by the absence of government
support compared with 2020.
Jardine Pacific saw net non-trading gains of US$389 million in
the year, comprising a gain on disposal of properties of US$345
million and fair value gains related to investment properties of
US$43 million.
Jardines Motor Interests
The Group's Motors business produced 49% higher underlying net
profit of US$318 million in 2021. The business benefitted from a
higher contribution from its 21% investment in Zhongsheng in
respect of the second half of 2020 and the first half of 2021.
Zhongsheng saw strong performance from its used car business, while
it begins to develop its EV-related business. Its acquisition of
the Zung Fu China business significantly strengthened its market
position in its Mercedes Benz business.
There was also a higher contribution from our United Kingdom
business, which saw increased volumes and margins in all operations
and achieved cost savings, delivering US$38 million profit compared
with a loss of US$12 million in 2020, when the business faced
extensive temporary closures of its dealerships in the first half
of the year.
The Hong Kong business saw better performance in 2021. Delivery
of cars, however, remains impacted by a shortage of microchips and
supply chain issues. The business was reported as part of the
Jardine Pacific group of businesses with effect from October
2021.
Hongkong Land
Hongkong Land delivered a resilient performance in 2021, despite
the continued impact of the pandemic and related restrictions. The
group delivered underlying profit of US$966 million, in line with
the prior year. Profits from the group's Investment Properties
business were flat against the prior year. Retail rental income
increased during the year, although this was offset by lower office
rents in Hong Kong. A greater number of residential sales
completions on the Chinese mainland resulted in a higher
contribution from the Development Properties business. Good
progress was made during the year on the replenishing of the
group's land bank, with nine new projects secured on the Chinese
mainland and three in Singapore.
There was a loss attributable to shareholders of US$349 million,
reflecting net losses of US$1,315 million due to lower valuations
of Investment Properties. This compares to a loss attributable to
shareholders of US$2,647 million in 2020, which included a US$3,610
million reduction in property valuations.
Investment Properties
The group's Central office portfolio in Hong Kong continued to
perform well overall and Central rents declined to a lesser extent
than the broader market. Vacancy and average office rents were both
lower at the end of 2021 than at the end of the prior year.
The Central LANDMARK retail portfolio remained effectively fully
occupied and saw improved tenant sales due to a modest recovery in
consumer sentiment and an increase in average retail rents due to a
reduction in temporary rent relief provided to tenants.
The value of the group's Hong Kong Investment Properties
portfolio decreased by 5% compared with the prior year, due to
lower rents, with no change in capitalisation rates.
In Singapore, positive rental reversions continued, with average
office rents increasing and vacancy remaining low. The value of the
group's Singapore Investment Properties portfolio increased by 1%
compared with the prior year.
In Beijing, trading performance at WF CENTRAL continued to
benefit from the strength of luxury retail sentiment on the Chinese
mainland.
In Shanghai, construction is proceeding on schedule at the
group's 43%-owned prime 1.1 million sq. m. mixed-use development on
the West Bund, which is expected to complete in multiple phases
between 2023 and 2027.
Development Properties
On the Chinese mainland, the profit contribution from
Development Properties increased compared with the prior year, due
to more residential sales completions. Market sentiment weakened in
the second half of the year amidst tightened credit conditions for
the sector, but contracted sales performance at the group's
projects remained satisfactory, reflecting the superior locations
of its developments in Tier 1 and 2 cities.
In April 2021, the group launched a seven-level shopping mall in
Chongqing under a new lifestyle retail brand - The Ring, the first
in a series of malls under development using this new brand. In
addition, the group has three luxury retail properties under
development, in Shanghai, Chongqing and Nanjing. It also has six
premium lifestyle retail properties under development on the
Chinese mainland. Singapore profits were in line with the prior
year. Despite ongoing impact from the pandemic, residential market
sentiment remained robust during the year, resulting in the
introduction of cooling measures in late 2021 to moderate demand.
In the rest of Southeast Asia, there were moderate improvements in
market sentiment and a gradual recovery in construction activities
as borders across the region reopened.
Good progress continued to be made by Hongkong Land in
replenishing its land bank, with nine new projects secured on the
Chinese mainland and three in Singapore.
DFI Retail Group
2021 was another challenging year for DFI Retail, as the
pandemic continued to constrain normal store operations, reduce
store traffic and impact the customer experience and customer
behaviours. These external factors, combined with a significant
loss incurred by its key associate Yonghui and a reduced level of
government support compared with the prior year, materially
affected the reported financial results of the group.
The underlying financial performance of the group's
subsidiaries, excluding government support, however, improved
year-on-year as the group continued to focus on its multi-year
transformation plan, driving improvements in its businesses. These
included enhancements to operating efficiency, improvements to
customer service standards and the delivery of greater value for
customers.
Underlying net profit for DFI Retail's subsidiaries in 2021 was
down 27% at US$145 million. Underlying net profit attributable to
shareholders fell to US$105 million in 2021 from US$276 million in
the prior year. Around 70% of this reduction was due to a US$119
million adverse swing in the group's share of Yonghui's profits
compared with 2020. The impact of the loss incurred by Yonghui was
partially offset by an encouraging recovery by Maxim's, where DFI
Retail's share of the profits increased by US$15 million.
F oo d - Gr oce r y R e ta il
Given the significant volatility in 2020 performance, a
comparison of performance in 2021 to 2019 provides a better
understanding of the progress made in the group's transformation
plan. Operating profit for the Grocery Retail division in 2021 was
US$143 million, significantly higher than the US$63 million
reported in 2019. This reflected a strong improvement in underlying
profitability achieved through the execution of business
improvement programmes, business portfolio management initiatives,
store revitalisation programmes leading to improved store-level
execution, enhanced own brand penetration and progress in driving
customer loyalty in Hong Kong.
The weaker performance in Grocery Retail in 2021 compared with
2020 was due to reduced sales as customer buying behaviours
normalised compared with last year, together with lower levels of
government support.
Food - Convenience
The performance of the group's Convenience business was broadly
flat compared with the prior year. It received lower levels of
government support than the prior year, but saw better performance
in Hong Kong and Macau, where 7-Eleven sales recovered in the third
quarter as market conditions stabilised. There was strong new store
growth and reinvigorated customer traffic into stores, particularly
in Hong Kong. Operating profit was 5% lower than the prior year,
however, primarily due to lower profits in Singapore and the
Chinese mainland, where COVID-19 restrictions impeded sales
momentum.
Health and Beauty
Total underlying sales (excluding the impact of divestments) for
the Health and Beauty Division were slightly lower than the prior
year. The absence of tourist traffic due to the ongoing closure of
the border with the Chinese mainland continued to significantly
impact Mannings' performance in Hong Kong, which was also impacted
by lower levels of government support than the prior year, while
Guardian performance in Singapore and rest of Southeast Asia was
impacted by fewer customer visits due to pandemic restrictions.
Operating profit for 2021 was lower than the prior year, but
profitability increased by over 50% in the second half as a result
of improved sales and strong cost control.
H o m e Furnishings
Home Furnishings reported solid performance despite the negative
impact of government-imposed trading restrictions and global supply
chain disruptions. Sales benefitted from ongoing store network
expansion and strong e-commerce growth, but profits were 36% lower.
This was principally due to ongoing pandemic-related restrictions
and compromised range availability caused by global supply chain
constraints, which impacted like-for-like sales performance, as
well as some additional pre-opening expenses.
Associates
The group's overall reported financial results in 2021 were
materially affected by its US$90 million share of the loss incurred
by Yonghui. Yonghui's performance was impacted by a combination of
the normalisation of sales performance; reduced margins resulting
from rising competition and investments in digital.
The contribution from 50%-owned Maxim's increased significantly
in 2021 to US$52 million, as restaurant patronage recovered,
particularly in Hong Kong and on the Chinese mainland.
Other developments
Following a detailed strategic review PT Hero, DFI Retail's
89.3%-owned subsidiary in Indonesia, was restructured in the year
and pivoted focus towards its strong brands of IKEA, Guardian and
Hero Supermarkets, and away from the Giant banner. The Giant banner
in Indonesia ceased operations in July, with six stores
subsequently converted to the upscale Hero banner, the conversion
of one store in Bali into an IKEA store in the fourth quarter and a
number of other sites also scheduled to be transformed into IKEA
stores.
'Own brand' has continued to be a key driver of value for
customers and Meadows is now the number one brand across the whole
group. Own brand development is also an ongoing focus within Health
and Beauty, with plans to launch over 1,000 products during
2022.
Digital innovation and e-commerce remain a key focus for DFI
Retail. The yuu rewards programme continues to exceed expectations
and now has almost 4 million members, representing over 60% of Hong
Kong's adult population. All brands have benefited from stronger
levels of customer engagement. The yuu ecosystem has been expanded
in 2021 to include Maxim's as a partner, the introduction of yuu
Insure and Shell as fuel partner, and the launch of yuu-to-me
e-commerce functionality.
Mandarin Oriental
Mandarin Oriental saw a significant improvement in its
performance in 2021, as restrictions on travel were gradually
relaxed in most countries. Performance varied by region, however,
as demand remained heavily influenced by the extent and pace with
which these restrictions were lessened.
The group delivered a total underlying loss of US$68 million,
US$138 million lower than 2020. Results remain materially behind
pre-COVID-19 levels.
Combined total revenue of hotels under management increased by
78% in 2021 compared with the prior year. In Europe and the United
States, a relaxation of travel restrictions in the second half of
the year allowed business levels to improve. In East Asia, by
contrast, restraints on international travel remained in place
throughout the year, limiting most hotels to domestic demand.
Results for most of the group's owned hotels improved, driven by
both better trading conditions and government support in some
countries. In Europe, results were notably better in Munich,
London, Geneva and Paris, while Boston and New York performed best
of the properties in the Americas. There was also a strong
performance by the Hong Kong hotel.
The earnings before interest, tax, depreciation and amortization
('EBITDA') from the group's property interests in 2021 were US$24
million, compared with a loss of US$62 million in 2020. Due to
associated depreciation costs, these same properties in aggregate
reported an underlying loss of US$71 million in 2021, compared with
a loss of US$174 million in the prior year.
Performance of the management business improved substantially,
producing EBITDA of US$17 million compared with a loss of US$12
million in 2020. Particularly strong management fees were earned in
resort destinations such as Bodrum and Dubai. There was an
underlying profit of US$5 million in 2021, compared with a loss of
US$30 million in the prior year.
Results were boosted by COVID-19-related receipts that included
government support, primarily in Europe, rent concessions in Tokyo,
and business interruption insurance proceeds for hotels in the
United States.
The group's total number of hotels under operation has increased
to 36, following the opening of its latest property in Shenzhen in
January 2022. In 2021, the group took over the management of the Al
Faisaliah Hotel in Riyadh and opened a new hotel on the Bosphorus
in Istanbul, both under management contracts. The group also
reopened the Mandarin Oriental Ritz, Madrid, in which it owns a 50%
interest, after an extensive programme of restoration and
refurbishment.
The group's development pipeline remains robust, with 24
projects expected to open in the next five years. Three new
management contracts were announced in 2021, and two new
developments have been announced since the start of 2022. Two
hotels and three standalone residences projects are scheduled for
opening in 2022, while the group also expects to rebrand two
properties in the Middle East.
In Hong Kong, the Causeway Bay site under development remains on
track to complete in 2025.
Jardine Cycle & Carriage
JC&C 's underlying profit attributable to shareholders was
83% higher than last year at US$786 million. After accounting for
non-trading items, profit attributable to shareholders was US$661
million, 22% higher than the same period last year. Non-trading
items in 2021 comprised US$125 million of unrealised fair value
losses related to non-current investments.
Astra's contribution to the group's underlying profit increased
significantly to US$655 million from US$309 million last year,
reflecting improved performances from most of its businesses.
The underlying profit from Direct Motor Interests increased to
US$39 million from US$14 million last year, mainly due to improved
contributions from Cycle & Carriage Singapore and Tunas Ridean
in Indonesia. Other Strategic Interests contributed an underlying
profit of US$151 million, up 26% from the previous year.
Direct Motor Interests
Direct Motor Interests saw improved performance across its
businesses, with a 58% increase in the contribution from Cycle
& Carriage Singapore, supported by higher profits from its
premium and used car operations. In Indonesia, Tunas Ridean's
automotive business recovered well with a contribution of US$16
million, compared with US$1 million last year, mainly due to higher
profits from its automotive and financial services businesses.
Other Strategic Interests
Under Other Strategic Interests, Thaco's contribution was 60%
higher than last year. Its automotive business continued to do
well, as margins benefited from an improved sales mix which offset
a small decline in unit sales.
The contribution by Siam City Cement ('SCCC') was 18% higher
than the previous year, with results benefitting from a reduction
in corporate tax rates in respect of its Sri Lankan operations.
Excluding the tax impact, SCCC's contribution would have been flat,
with the benefit of continued cost-saving initiatives offset by
continued lower cement volumes as market demand was affected by the
pandemic and reduced margins as a result of an increase in coal
prices. There was an 8% higher contribution from Refrigeration
Electrical Engineering Corporation ('REE'), mainly due to a
stronger performance by its power and water investments as a result
of favourable hydrography.
The group's investment in Vinamilk delivered slightly higher
dividend income of US$39 million. Vinamilk's net profit declined by
5% as a result of higher input and transportation costs.
Astra
Astra delivered a strong performance, with net profit under
Indonesian accounting standards of Rp20.2 trillion, equivalent to
US$1.4 billion, 2 5% higher than 2020, when the group benefitted
from the gain on the sale of its investment in Permata Bank.
Excluding this one-off gain, the group's net income would have
increased by 96%.
Key contributors to this strong performance included an overall
improvement in the Indonesian economy as the impact of the pandemic
and related containment measures abated; higher commodity prices -
with historic high commodity prices; and effective government
fiscal measures, including the removal of luxury sales tax on small
engine cars for most of year.
These improved trading conditions drove stronger performances
from all of Astra's businesses, and in particular its automotive,
financial services , heavy equipment and mining and agribusiness
divisions.
Automotive
Net income from Astra's automotive division increased by 170 %
to US$509 million, reflecting the recovery from the significant
adverse impact of the pandemic last year and an increase in sales
volumes, especially in the car segment, which benefitted from
temporary luxury sales tax incentives.
The wholesale market for cars increased by 67% in 2021 and
Astra's car sales were 81% higher, with market share increasing to
55% from 51% last year. The wholesale market for motorcycles
increased by 38% and Astra Honda Motor's sales rose by 36%, with a
slightly reduced market share. Astra Otoparts saw an increase in
net income , mainly due to higher revenues from the original
equipment manufacturer, replacement market and export segments.
Financial Services
Net income from the group's financial services division
increased by 49% to US$345 million, primarily due to higher
contributions from the consumer finance and general insurance
businesses. C onsumer finance businesses saw a 2 5 % increase in
new amounts financed. There was a 70% rise in the contribution from
the group's car-focussed finance companies and an increase of 66 %
in the c ontribution from its motorcycle-focussed business. These
increases were mainly due to lower loan loss provisioning.
Astra's heavy equipment-focussed finance operations saw an 88%
increase in new amounts financed. The net income contribution from
this segment increased by 85%.
General insurance company Asuransi Astra Buana reported a 21%
increase in net income, mainly caused by higher investment and
underwriting income. The group's life insurance company, Astra
Life, recorded a 50% increase in gross written premiums.
Heavy Equipment, Mining and Construction
Net income from Astra's heavy equipment, mining and construction
division increased by 79% to US$427 million,
due to higher Komatsu heavy equipment sales and improved coal prices.
Komatsu heavy equipment sales rose by 9 7 %, while parts and
service revenues were also higher. Mining contractor Pamapersada
Nusantara recorded 3% higher overburden removal volume and 1 %
higher coal production. United Tractors' coal mining subsidiaries
achieved 3% lower coal sales, while Agincourt Resources reported a
3 %
increase in gold sales .
General contractor Acset Indonusa reported a net loss of US$49
million, mainly due to the slowdown of several ongoing projects and
reduced construction project opportunities during the pandemic.
Agribusiness
Net income from the group's agribusiness division was US$109
million, 137% higher than 2020, mainly due to higher crude palm oil
prices , which rose by 32%. Crude palm oil and derivatives sales
fell slightly .
Infras tru cture and Logistics
Astra's infrastructure and logistics division saw its net income
increase by 53% to US$5 million in 2021. The group's toll road
concessions saw 25% higher toll revenue. Serasi Autoraya's net
income increased by 26%, mainly due to improved operating margins
and more vehicles under contract, although used car sales were
lower.
During the year, the group acquired a 49% stake in PT Jasamarga
Pandaan Malang, the operator of the Pandaan-Malang toll road, one
of the important toll roads in East Java.
Information Technology
Net income from the group's information technology division was 86 % higher at US$5 million.
Property
Net income from the group's property division increased by 26%
to US$8 million. During the year, Astra Land Indonesia ('ALI'),
Astra's 50:50 joint venture with Hongkong Land, acquired the
remaining 33% stake in Astra Modern Land, the developer of the Asya
residential township in East Jakarta, which it did not already own.
In early 2022, ALI established a joint venture with LOGOS to
develop and manage modern logistics warehouses in Indonesia.
Outlook
The Group saw a recovery in a number of its businesses in 2021,
demonstrating their continuing resilience. In 2022, Astra is
expected to see ongoing benefits from positive commodity prices
across its portfolio, while the normal progression of projects in
the Group's development properties business in the Chinese mainland
is expected to result in a reduction in the number of completions.
The performance of the Group's Hong Kong operations will depend on
the impact of the ongoing pandemic on our businesses there.
We remain confident in our long-term strategy, rooted in the
growth markets of China and Southeast Asia, and we will continue to
focus on our core priorities of driving operational excellence,
evolving the Group's portfolio and finding new growth
opportunities, in order to deliver long-term value.
John Witt
Group Managing Director
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2021
2021 2020
Underlying Non- Underlying Non-
business trading business trading
performance items Total performance items Total
US$m US$m US$m US$m US$m US$m
Revenue (note 2) 35,862 - 35,862 32,647 - 32,647
Net operating costs (note
3) (32,534) 1,114 (31,420) (30,310) 458 (29,852)
Change in fair value
of investment properties - (1,410) (1,410) - (3,477) (3,477)
-------- ------- -------- ----------- ------- --------
Operating profit/(loss) 3,328 (296) 3,032 2,337 (3,019) (682)
Net financing charges
-------- ------- -------- ----------- ------- --------
* financing charges (595) - (595) (637) - (637)
* financing income 206 - 206 242 - 242
(389) - (389) (395) - (395)
Share of results of associates
and joint ventures (note
4)
-------- ------- -------- ----------- ------- --------
* before change in fair value of investment properties 1,178 10 1,188 844 (268) 576
* change in fair value of investment properties - 81 81 - (177) (177)
1,178 91 1,269 844 (445) 399
Profit/(loss) before
tax 4,117 (205) 3,912 2,786 (3,464) (678)
Tax (note 5) (828) (123) (951) (483) (3) (486)
-------- ------- -------- ----------- ------- --------
Profit/(loss) after tax 3,289 (328) 2,961 2,303 (3,467) (1,164)
-------- ------- -------- ----------- ------- --------
Attributable to:
Shareholders of the Company
(notes 6 & 7) 1,513 368 1,881 1,085 (1,479) (394)
Non-controlling interests 1,776 (696) 1,080 1,218 (1,988) (770)
-------- ------- -------- ----------- ------- --------
3,289 (328) 2,961 2,303 (3,467) (1,164)
-------- ------- -------- ----------- ------- --------
US$ US$ US$ US$
Earnings/(loss) per share
(note 6)
- basic 4.83 6.01 2.95 (1.07)
- diluted 4.83 6.01 2.95 (1.07)
-------- -------- ----------- --------
Jardine Matheson Holdings Limited
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2021
2021 2020
US$m US$m
Profit/(loss) for the year 2,961 (1,164)
Other comprehensive (expense)/income
Items that will not be reclassified
to profit or loss:
-------
Remeasurements of defined benefit plans 86 6
Net revaluation surplus before transfer
to
investment properties
* tangible assets 75 -
* right-of-use assets 3 -
Tax on items that will not be reclassified (9) (1)
155 5
Share of other comprehensive income
of
associates and joint ventures 9 1
----- -------
164 6
Items that may be reclassified subsequently
to profit
or loss:
Net exchange translation differences
----- -------
- net (loss)/gain arising during the
year (227) 712
- transfer to profit and loss (21) (227)
(248) 485
Revaluation of other investments at
fair value through
other comprehensive income
----- -------
- net (loss)/gain arising during the
year (2) 19
- transfer to profit and loss (3) (4)
(5) 15
Cash flow hedges
----- -------
- net gain/(loss) arising during the
year 75 (70)
- transfer to profit and loss 12 5
87 (65)
Tax relating to items that may be reclassified (21) 12
Share of other comprehensive (expense)/income
of
associates and joint ventures (16) 268
----- -------
(203) 715
Other comprehensive (expense)/income
for the year,
net of tax (39) 721
----- -------
Total comprehensive income/(expense)
for the year 2,922 (443)
----- -------
Attributable to:
Shareholders of the Company 1,908 74
Non-controlling interests 1,014 (517)
----- -------
2,922 (443)
----- -------
Jardine Matheson Holdings Limited
Consolidated Balance Sheet
at 31st December 2021
At 31st December
2021 US$m 2020 US$m
Assets
Intangible assets 2,635 2,695
Tangible assets 6,184 6,862
Right-of-use assets 4,274 4,768
Investment properties 32,847 34,273
Bearer plants 499 497
Associates and joint ventures 17,980 16,545
Other investments 2,908 2,940
Non-current debtors 2,961 3,032
Deferred tax assets 518 485
Pension assets 32 11
--------- ---------
Non-current assets 70,838 72,108
--------- ---------
Properties for sale 3,345 2,339
Stocks and work in progress 2,793 2,849
Current debtors 6,928 6,753
Current investments 46 61
Current tax assets 172 158
Bank balances and other liquid
funds
--------- ---------
- non-financial services companies 6,904 8,801
- financial services companies 378 402
7,282 9,203
--------- ---------
20,566 21,363
Asset classified as held for sale 85 55
--------- ---------
Current assets 20,651 21,418
--------- ---------
Total assets 91,489 93,526
--------- ---------
Equity
Share capital 179 181
Share premium and capital reserves 25 31
Revenue and other reserves 35,800 34,457
Own shares held (6,223) (5,282)
--------- ---------
Shareholders' funds 29,781 29,387
Non-controlling interests 28,587 33,456
--------- ---------
Total equity 58,368 62,843
--------- ---------
Liabilities
Long-term borrowings
--------- ---------
- non-financial services companies 11,026 8,576
- financial services companies 1,273 1,246
12,299 9,822
Non-current lease liabilities 3,022 3,040
Deferred tax liabilities 743 699
Pension liabilities 451 507
Non-current creditors 250 366
Non-current provisions 309 322
--------- ---------
Non-current liabilities 17,074 14,756
--------- ---------
Current creditors 10,074 8,645
Current borrowings
--------- ---------
- non-financial services companies 2,513 3,945
- financial services companies 1,846 1,930
4,359 5,875
Current lease liabilities 812 850
Current tax liabilities 609 368
Current provisions 193 189
--------- ---------
Current liabilities 16,047 15,927
--------- ---------
Total liabilities 33,121 30,683
--------- ---------
Total equity and liabilities 91,489 93,526
--------- ---------
Jardine Matheson
Holdings Limited
Consolidated
Statement of
Changes
in Equity
for the year
ended 31st
December 2021
Attributable
to Attributable
Asset Own shareholders to
Share Share Capital Revenue revaluation Hedging Exchange shares of the non-controlling Total
capital premium reserves reserves 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
2021
At 1st January 181 - 31 33,497 2,167 (55) (1,152) (5,282) 29,387 33,456 62,843
Total
comprehensive
income - - - 1,966 76 37 (171) - 1,908 1,014 2,922
Dividends paid
by the Company
(note
8) - - - (505) - - - - (505) - (505)
Dividends paid
to
non-controlling
interests - - - - - - - - - (669) (669)
Unclaimed
dividends
forfeited - - - 1 - - - - 1 1 2
Issue of shares - 3 - - - - - - 3 - 3
Employee share
option schemes - - 1 - - - - - 1 - 1
Scrip issued in
lieu of
dividends 1 (1) - 152 - - - - 152 - 152
Repurchase of
shares (3) (8) - (569) - - - - (580) - (580)
Acquisition of
the remaining
interest
in Jardine
Strategic - - - - - - - (941) (941) (4,627) (5,568)
Subsidiaries
disposed of - - - - - - - - - (5) (5)
Change in
interests in
subsidiaries - - - 282 - - - - 282 (581) (299)
Change in
interests in
associates
and joint
ventures - - - 73 - - - - 73 (2) 71
Transfer - 6 (7) 29 (1) - (27) - - - -
------- ------- -------- -------- ----------- -------- -------- ------- ------------ --------------- -------
At 31st December 179 - 25 34,926 2,242 (18) (1,350) (6,223) 29,781 28,587 58,368
------- ------- -------- -------- ----------- -------- -------- ------- ------------ --------------- -------
2020
At 1st January 183 - 32 34,903 2,167 (22) (1,630) (5,282) 30,351 34,720 65,071
Total
comprehensive
expense - - - (371) - (33) 478 - 74 (517) (443)
Dividends paid
by the Company
(note
8) - - - (637) - - - - (637) 111 (526)
Dividends paid
to
non-controlling
interests - - - - - - - - - (840) (840)
Unclaimed
dividends
forfeited - - - 1 - - - - 1 - 1
Issue of shares - 2 - - - - - - 2 - 2
Employee share
option schemes - - 1 - - - - - 1 1 2
Scrip issued in
lieu of
dividends 1 (1) - 134 - - - - 134 - 134
Repurchase of
shares (3) (2) - (549) - - - - (554) - (554)
Subsidiaries
disposed of - - - - - - - - - (13) (13)
Capital
contribution
from
non-controlling
interests - - - - - - - - - 39 39
Change in
interests in
subsidiaries - - - 18 - - - - 18 (45) (27)
Change in
interests in
associates
and joint
ventures - - - (3) - - - - (3) - (3)
Transfer - 1 (2) 1 - - - - - - -
------- ------- -------- -------- ----------- -------- -------- ------- ------------ --------------- -------
At 31st December 181 - 31 33,497 2,167 (55) (1,152) (5,282) 29,387 33,456 62,843
------- ------- -------- -------- ----------- -------- -------- ------- ------------ --------------- -------
On 8th March 2021, the Company announced a plan to simplify the Group's parent company structure, including
the acquisition for cash of the 15% of Jardine Strategic Holdings Limited's ('Jardine Strategic') issued
share capital that the Company and its wholly-owned subsidiaries did not already own (the 'Acquisition').
The Acquisition was implemented by way of an amalgamation of Jardine Strategic and a wholly-owned subsidiary
of the Company, under the Companies Act 1981 of Bermuda. The total Acquisition value was approximately US$5.6
billion, of which US$5.5 billion had been settled and reflected in the consolidated cash flow statement
for the year ended 31st December 2021. The Acquisition was financed by the issuance of a total of US$1.2
billion bonds on 9th April 2021, new revolving credit facilities and existing cash resources.
The Acquisition was completed on 14th April 2021, following shareholders' approval at Jardine Strategic's
special general meeting on 12th April 2021. The Acquisition value and the related transaction costs resulted
in a reduction of the Group's total equity.
Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2021
2021 2020
US$m US$m
Operating activities
-------- -------
Cash generated from operations 5,383 5,930
Interest received 194 209
Interest and other financing charges paid (573) (692)
Tax paid (728) (804)
-------- -------
4,276 4,643
Dividends from associates and joint ventures 800 632
Cash flows from operating activities 5,076 5,275
Investing activities
-------- -------
Purchase of subsidiaries (note 9(a)) (24) (87)
Purchase of associates and joint ventures
(note 9(b)) (194) (206)
Purchase of other investments (note 9(c)) (467) (494)
Purchase of intangible assets (158) (131)
Purchase of tangible assets (620) (659)
Additions to right-of-use assets (25) (37)
Additions to investment properties (note
9(d)) (118) (4,660)
Additions to bearer plants (32) (35)
Advances to and repayments to associates
and joint ventures (note 9(e)) (1,100) (725)
Advances from and repayments from associates
and joint ventures (note 9(f)) 850 1,437
Sale of subsidiaries (note 9(g)) 1,510 2,821
Sale of associates and joint ventures (note
9(h)) 60 1,138
Sale of other investments (note 9(i)) 398 445
Sale of intangible assets - 1
Sale of tangible assets 135 47
Sale of right-of-use assets 13 -
Sale of investment properties 3 11
Cash flows from investing activities 231 (1,134)
Financing activities
-------- -------
Issue of shares 3 2
Capital contribution from non-controlling
interests - 39
Acquisition of the remaining interest in
Jardine Strategic (5,490) -
Change in interests in subsidiaries (note
9(j)) (299) (27)
Purchase of own shares (584) (549)
Drawdown of borrowings 12,572 7,967
Repayment of borrowings (11,467) (7,557)
Principal elements of lease payments (894) (962)
Dividends paid by the Company (353) (392)
Dividends paid to non-controlling interests (669) (840)
Cash flows from financing activities (7,181) (2,319)
-------- -------
Net (decrease)/increase in cash and cash
equivalents (1,874) 1,822
Cash and cash equivalents at 1st January 9,153 7,157
Effect of exchange rate changes (1) 174
-------- -------
Cash and cash equivalents at 31st December 7,278 9,153
-------- -------
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
for the year ended 31st December 2021
2021 2020
US$m US$m
Reportable segments
Jardine Pacific 175 182
Jardine Motors 318 214
Hongkong Land 474 412
DFI Retail 82 181
Mandarin Oriental (48) (138)
Jardine Cycle & Carriage 119 64
Astra 474 197
----- --------
1,594 1,112
Corporate and other interests (81) (27)
----- --------
Underlying profit attributable to shareholders* 1,513 1,085
Decrease in fair value of investment properties (681) (1,424)
Sale of Zung Fu China(#) 791 -
Sale of Zung Fu properties in Hong Kong 337 -
Other non-trading items (79) (55)
----- --------
Profit/(loss) attributable to shareholders 1,881 (394)
----- --------
Analysis of Jardine Pacific's contribution
Jardine Schindler 32 32
JEC 49 51
Gammon 39 38
Jardine Restaurants 27 32
Transport Services 31 24
Zung Fu Hong Kong(#) 4 -
Corporate and other interests (7) 5
175 182
----- --------
Analysis of Jardine Motors' contribution
Hong Kong(#) and Chinese mainland 285 226
United Kingdom 38 (12)
Corporate (5) -
----- --------
318 214
----- --------
* Underlying profit attributable to shareholders is the measure
of profit adopted by the Group in accordance with IFRS 8 'Operating
Segments'.
# During 2021, the operations under Jardine Motors had been
restructured. The motor trading business in the Chinese mainland
('Zung Fu China') was sold to the Group's associate, Zhongsheng,
in October 2021 (note 9(g)). Subsequent to the sale, the motor
trading business in Hong Kong and Macau are managed by Jardine
Pacific. Accordingly, the results of these operations are presented
under Jardine Pacific from October 2021. Operations in the United
Kingdom and Zhongsheng remain unchanged with results presented
under Jardine Motors.
Jardine Matheson Holdings Limited
Notes
1. Accounting Policies and Basis of Preparation
The financial information contained in this announcement has
been based on the audited results for the year ended 31st December
2021 which have been prepared in conformity with International
Financial Reporting Standards, including International Accounting
Standards and Interpretations adopted by the International
Accounting Standards Board.
The Group has adopted the following amendments for the annual
reporting period commencing 1st January 2021.
Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16 (effective 1st January 2021)
The amendments provide practical expedient from certain
requirements under the IFRSs as a result of the reform which affect
the measurement of financial assets, financial liabilities and
lease liabilities, and a number of reliefs for hedging
relationships. The Group applied the amendments from 1st January
2021 and there is no significant impact on the Group's consolidated
financial statements.
COVID-19 Related Rent Concessions beyond 30th June 2021:
Amendment to IFRS 16 Leases (effective 1st April 2021)
The Group adopted and applied the practical expedient of the
COVID-19 Related Rent Concessions: Amendment to IFRS 16 Leases,
published in June 2020 ('2020 amendment'), in the 2020 annual
financial statements. The 2021 amendment extends the practical
expedient in the 2020 amendment to eligible lease payments due on
or before 30th June 2022. By using the 2021 amendment, the Group
continues to apply the practical expedient consistently to all
lease contracts with similar characteristics and in similar
circumstances, and does not assess these concessions as lease
modifications.
Apart from the above, there are no other amendments which are
effective in 2021 and relevant to the Group's operations, that have
a significant impact on the Group's results, financial position and
accounting policies.
The Group has not early adopted any standard, interpretation or
amendments that have been issued but not yet effective.
2. Revenue
Gross revenue Revenue
2021 2020 2021 2020
US$m US$m US$m US$m
By business:
Jardine Pacific 5,665 6,178 1,533 1,906
Jardine Motors 31,568 22,931 4,988 5,031
Hongkong Land 6,845 4,948 2,384 2,094
DFI Retail 27,684 28,159 9,015 10,269
Mandarin Oriental 510 298 317 184
Jardine Cycle & Carriage 6,434 6,189 1,403 1,269
Astra 30,909 22,388 16,285 11,965
Intersegment transactions (245) (185) (63) (71)
-------------- ----------- ------------ ------------
109,370 90,906 35,862 32,647
-------------- ----------- ------------ ------------
Gross revenue comprises revenue together with 100% of revenue
from associates and joint ventures.
3. Net Operating Costs
2021 2020
US$m US$m
Cost of sales (26,755) (24,349)
Other operating income 1,940 1,422
Selling and distribution costs (4,024) (4,367)
Administration expenses (2,283) (2,213)
Other operating expenses (298) (345)
--------- --------
(31,420) (29,852)
--------- --------
In relation to the COVID-19 pandemic, the Group had received
government grants and rent concessions of US$58 million
(2020: US$255 million) and US$49 million (2020: US$76 million),
respectively, for the year ended 31st December 2021. These
subsidies were accounted for as other operating income.
Net operating costs included the following
gains/(losses) from non-trading items:
Change in fair value of other investments (103) 142
Asset impairment (5) (65)
Sale of Zung Fu China (note 9(g)) 899 -
Sale and closure of other businesses - 422
Sale of Zung Fu properties in Hong Kong 336 -
Sale of other property interests 25 9
Restructuring of businesses (31) (62)
Reclassification of joint ventures as
subsidiaries - 10
Other (7) 2
1,114 458
--------- --------
4. Share of Results of Associates and Joint Ventures
2021 2020
US$m US$m
By business:
Jardine Pacific 118 49
Jardine Motors 206 135
Hongkong Land 434 92
DFI Retail (41) 85
Mandarin Oriental (22) (27)
Jardine Cycle & Carriage 139 (99)
Astra 452 199
Corporate and other interests (17) (35)
1,269 399
----- -----
Share of results of associates and joint
ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties 81 (177)
Change in fair value of other investments 12 9
Asset impairment (14) (275)
Sale and closure of businesses 3 -
Bargain purchase on acquisition 8 (2)
Other 1 -
91 (445)
----- -----
Results are shown after tax and non-controlling interests in the
associates and joint ventures.
In relation to the COVID-19 pandemic, included in share of
results of associates and joint ventures were the Group's share of
the government grants and rent concessions of US$18 million (2020:
US$125 million) and US$19 million (2020: US$30 million),
respectively, for the year ended 31st December 2021.
5. Tax
2021 2020
US$m US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (974) (603)
Deferred tax 23 117
----- -----
(951) (486)
----- -----
China (355) (209)
Southeast Asia (560) (277)
United Kingdom (12) 4
Rest of the world (24) (4)
----- -----
(951) (486)
----- -----
Tax relating to components of other comprehensive
income is analysed as follows:
Remeasurements of defined benefit plans (9) (1)
Cash flow hedges (21) 12
(30) 11
----- -----
Tax on profits has been calculated at rates of taxation
prevailing in the territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$456
million (2020: US$301 million) is included in share of results of
associates and joint ventures. Share of tax charge of US$11 million
(2020: tax credit of US$9 million) is included in other
comprehensive income of associates and joint ventures.
6. Earnings/(Loss) per Share
Basic earnings per share are calculated on profit attributable
to shareholders of US$1,881 million (2020: loss of US$394 million)
and on the weighted average number of 313 million (2020: 368
million) shares in issue during the year.
Diluted earnings per share are calculated on profit attributable
to shareholders of US$1,881 million (2020: loss of US$394 million),
which is after adjusting for the effects of the conversion of
dilutive potential ordinary shares of subsidiaries, associates or
joint ventures, and on the weighted average number of 313 million
(2020: 368 million) shares in issue during the year.
The weighted average number of shares is arrived at as
follows:
Ordinary shares
in millions
2021 2020
Weighted average number of shares in issue 721 731
Company's share of shares held by subsidiaries (408) (363)
---------------- ---------------
Weighted average number of shares for
basic earnings per share calculation 313 368
Adjustment for shares deemed to be issued
for no consideration under the Senior
Executive Share Incentive Schemes - -
---------------- ---------------
Weighted average number of shares for
diluted earnings per share calculation 313 368
---------------- ---------------
Additional basic and diluted earnings/(loss) per share are also
calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
2021 2020
Basic Diluted
Basic Diluted (loss)/ (loss)/
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
Profit/(loss) attributable
to shareholders 1,881 6.01 6.01 (394) (1.07) (1.07)
Non-trading items (note
7) (368) 1,479
----- -----
Underlying profit
attributable
to shareholders 1,513 4.83 4.83 1,085 2.95 2.95
----- -----
7. 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 equity investments
which are measured at fair value through profit and loss; gains and
losses arising from the sale of businesses, investments and
properties; impairment of non-depreciable intangible assets,
associates and joint ventures 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.
2021 2020
US$m US$m
By business:
Jardine Pacific 382 332
Jardine Motors 789 (23)
Hongkong Land (663) (1,545)
DFI Retail (4) (3)
Mandarin Oriental (58) (316)
Jardine Cycle & Carriage (85) (49)
Astra (1) 120
Corporate and other interests 8 5
368 (1,479)
----- -------
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 (664) (1,546)
- other (17) 122
(681) (1,424)
Change in fair value of other investments (62) 100
Asset impairment (12) (223)
Sale of Zung Fu China (note 9(g)) 791 -
Sale and closure of other businesses 2 93
Sale of Zung Fu properties in Hong Kong 337 -
Sale of other property interests 18 9
Restructuring of businesses (23) (37)
Reclassification of joint ventures as
subsidiaries - 3
Bargain purchase on acquisition 6 -
Other (8) -
368 (1,479)
----- -------
Asset impairment in 2020 included a partial impairment of
Jardine Cycle & Carriage's investment in Siam City Cement of
US$116 million.
Profit on sale and closure of other businesses in 2020 included
profit of US$120 million from sale of Astra's 44.6% interest in
Permata Bank with net proceeds of US$1,136 million.
8. Dividends
2021 2020
US$m US$m
Final dividend in respect of 2020 of USc128.00
(2019: USc128.00) per share 921 938
Interim dividend in respect of 2021 of
USc44.00
(2020: USc 44 .00) per share 318 322
----- -----
1,239 1,260
Company's share of dividends paid on the
shares held by subsidiaries (734) (623)
----- -----
505 637
----- -----
A final dividend in respect of 2021 of USc156.00 (2020: USc1 28
.00) per share amounting to a total of US$1,118 million (2020:
US$921 million) is proposed by the Board. The dividend proposed
will not be accounted for until it has been approved at the 2022
Annual General Meeting. The net amount after deducting the
dividends payable on the shares held by the Company's subsidiaries
of US$666 million (2020: US$5 46 million) will be accounted for as
an appropriation of revenue reserves in the year ending 31st
December 2022.
9. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
Net cash outflow for purchase of subsidiaries in 2021
principally related to Jardine Pacific's acquisition of a
healthcare engineering solution provider in Hong Kong and
Macau.
Net cash outflow in 2020 included US$14 million for Jardine
Motors' acquisition of a dealership business in the Chinese
mainland; US$21 million for DFI Retail's payment for deferred
consideration on acquisition of a 100% interest in San Miu
Supermarket Limited in Macau in 2015; and US$44 million for Astra's
acquisition of a 100% interest in PT Jakarta Marga Jaya, a toll
road business company, and US$7 million for Astra's increased
interest in PT Asuransi Jiwa Astra, a life insurance company, from
50% to 100%.
Goodwill in 2020 mainly arose from the acquisition of PT
Asuransi Jiwa Astra of US$56 million, attributable to synergy with
Astra's existing insurance business. None of the goodwill is
expected to be deductible for tax purposes.
(b) Purchase of associates and joint ventures in 2021 mainly
included US$115 million for Hongkong Land's investments in the
Chinese mainland, US$9 million for Jardine Cycle & Carriage's
additional interest in Refrigeration Electrical Engineering
Corporation, and US$66 million for Astra's investments in toll road
concession business.
Purchase in 2020 mainly included US$153 million for Hongkong
Land's investments primarily in the Chinese mainland; US$15 million
for DFI Retail's capital injection into an associate for the
development of e-commerce platform to support the group's digital
business; and US$24 million for Astra's settlement of deferred
consideration on acquisition of toll road concessions in 2019.
(c) Purchase of other investments in 2021 included US$375
million for acquisition of securities in Astra and US$69 million
for investment in limited partnership investment funds in
Corporate. Purchase in 2020 included US$478 million for Astra's
acquisition of securities.
(d) Additions to investment properties in 2020 mainly included
US$4,485 million for Hongkong Land's acquisition of a mixed-use
site in the Xuhui District in Shanghai, Chinese mainland.
(e) Advances to and repayments to associates and joint ventures
in 2021 mainly included Hongkong Land's advances to its property
joint ventures. Advances to and repayments to associates and joint
ventures in 2020 comprised US$684 million for Hongkong Land's
advances to its property joint ventures and US$41 million for
Mandarin Oriental's advances to its associate and joint venture
hotels.
(f) Advances from and repayments from associates and joint
ventures in 2021 and 2020 mainly included advances from and
repayments from Hongkong Land's property joint ventures.
(g) Sale of subsidiaries
2021 2020
US$m US$m
Non-current assets 605 5,192
Current assets 423 398
Non-current liabilities (86) (101)
Current liabilities (250) (268)
Non-controlling interests (5) (13)
----- -------
Net assets 687 5,208
Cumulative exchange translation difference (25) (248)
Profit on disposal 1,266 46
Deferred gain on sale and leaseback of
properties 126 -
----- -------
Sales proceeds 2,054 5,006
Adjustment for carrying value of an associate (428) -
Adjustment for carrying value of a joint
venture - (2,119)
Adjustment for deferred payments - 14
Cash and cash equivalents of subsidiaries
disposed of (116) (80)
----- -------
Net cash inflow 1,510 2,821
----- -------
Analysis of net cash inflow from sale
of subsidiaries:
Proceeds received 1,510 4,827
Deposits refunded - (2,006)
1,510 2,821
----- -------
Net cash inflow for sale of subsidiaries in 2021 included US$738
million from Jardine Pacific's sale of property holding
subsidiaries which hold the Zung Fu Hong Kong properties in Hung
Hom and Chai Wan with sale and leaseback arrangements, and US$754
million (net of tax of US$115 million) from Jardine Motors' sale of
Zung Fu China to the Group's associate, Zhongsheng, for a total
consideration of US$1.3 billion, comprised US$886 million in cash
and US$428 million worth of new shares in Zhongsheng, increasing
the Group's shareholding in Zhongsheng to 20.9%.
Net cash inflow in 2020 included US$2,566 million, being
proceeds received of US$4,572 million net of deposits refunded of
US$2,006 million, for Hongkong Land's sale of a 57% interest in a
wholly-owned company which became a 43%-owned joint venture. The
company owns a mixed-use site in Xuhui District in Shanghai,
Chinese mainland.
The remaining net cash inflow in 2020 of US$255 million included
US$47 million for Hongkong Land's sale of its entire 80% interest
in a development properties subsidiary in Vietnam; and US$109
million for DFI Retail's sale of its entire 100% interest in
Wellcome Taiwan and US$84 million for DFI Retail's sale of its
entire 100% interest in Rose Pharmacy to its 20%-owned associate,
Robinsons Retail Holdings, Inc.
The revenue and profit after tax in respect of subsidiaries
disposed of during the year amounted to US$2,399 million and US$53
million, respectively.
(h) Sale of associates and joint ventures in 2021 mainly
comprised Hongkong Land's sale of its interest in a property joint
venture in Chinese mainland. Sale in 2020 mainly included US$1,136
million for Astra's sale of its entire 44.6% interest in Permata
Bank.
(i) Sale of other investments in 2021 comprised sale of
securities of US$246 million and US$152 million in Astra and
Corporate, respectively. Sale in 2020 comprised Astra's sale of
securities.
(j) Change in interests in subsidiaries
2021 2020
US$m US$m
Increase in attributable interests
- Hongkong Land (192) -
- Mandarin Oriental - (25)
- other (107) (2)
----- -----
(299) (27)
----- -----
Increase in attributable interests in other subsidiaries in 2021
included US$18 million and US$19 million for Jardine Cycle &
Carriage's additional 30% and 25% interests in Cycle & Carriage
Bintang and Republic Auto, respectively, and US$70 million for
Astra's acquisition of the remaining 33% interest in PT Astra
Modern Land.
10. Capital Commitments and Contingent Liabilities
Total capital commitments at 31st December 2021 amounted to
US$2,864 million
(2020: US$2,698 million).
Following the acquisition of the 15 per cent of Jardine
Strategic not previously owned by the Company and its wholly-owned
subsidiaries, which was effected on 14th April 2021, a number of
former Jardine Strategic shareholders are seeking an appraisal of
the fair value of their shares in Jardine Strategic by the Bermuda
court, relying upon the process referred to in the shareholder
circular issued in connection with the acquisition. These
shareholders claim the consideration of US$33 per share that
Jardine Strategic considered to be fair value for its shares, and
that all shareholders have already received, did not represent fair
value. Although the proceedings were commenced in April 2021, they
are still at an early stage and it is anticipated that the court
appraisal process will not be concluded for at least a further 12
months. The Board believes that the US$33 per share that was paid
represented fair value to Jardine Strategic minority shareholders
and is of the opinion that no provision is required in relation to
these claims.
Various Group companies are involved in litigation arising in
the ordinary course of their respective businesses. Having reviewed
outstanding claims and taking into account legal advice received,
the Directors are of the opinion that adequate provisions have been
made in the financial statements.
11. Related Party Transactions
In the normal course of business the Group undertakes a variety
of transactions 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 its 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 in 2021 amounted to US$4,970
million (2020: US$3,104 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 sale of motor vehicles and
spare parts in 2021 amounted to US$604 million (2020: US$387
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 year.
Amounts of outstanding balances with associates and joint
ventures are included in debtors and creditors, as appropriate.
Jardine Matheson Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The process by which the Group identifies and
manages risk will be set out in more detail in the Corporate
Governance section of the Company's 2021 Annual Report (the
'Report'). Set out below are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the
DTRs, as well as a summary of the steps taken to mitigate those
risks.
These risks are in addition to matters referred to in the
Chairman's Statement, Group Managing Director's Review and other
parts of the Report.
Economic Risk
Most of the Group's businesses are exposed to the risk of
adverse developments in global and regional economies and financial
markets, either directly, or through the impact such developments
might have on the Group's joint venture partners, associates,
franchisors, bankers, suppliers or customers. These developments
could include recession, inflation, deflation, currency
fluctuations, restrictions in the availability of credit, business
failures, or increases in financing costs, oil prices or the cost
of raw materials. Such developments might increase operating costs,
reduce revenues, lower asset values or result in some or all of the
Group's businesses being unable to meet their strategic
objectives.
Mitigation Measures
-- Monitor the volatile macroeconomic environment and consider
economic factors in strategic and financial planning processes.
-- Make agile adjustments to existing business plans and explore
new business streams and new markets.
-- Review pricing strategies and keep conservative assumptions
on global commodity prices.
-- Insurance programme covering property damage and business
interruption.
Commercial Risk
Risks are an integral part of standard commercial activities,
and where practicable steps are taken to mitigate them. Risks can
be more pronounced when businesses are operating in volatile
markets.
A number of the Group's businesses make significant investment
decisions regarding developments or projects, which are subject to
market risks. This is especially the case where projects are
longer-term and take more time to deliver returns.
The Group's businesses operate in sectors and regions which are
highly competitive and evolving rapidly. Failure to compete
effectively, whether in terms of price, tender terms, product
specification, application of new technologies or levels of
service, and failure to manage change in a timely manner, can hurt
earnings or market share. Significant competitive pressure may also
lead to reduced margins.
It is essential for the products and services provided by the
Group's businesses to meet the appropriate quality and safety
standards, and there is an associated risk if they do not,
including the risk of damage to brand equity or reputation, which
might adversely impact the ability to achieve sufficient revenues
and profit margins.
In addition, growing sustainability consciousness in customers'
purchasing preferences has resulted in customers being more willing
to switch to other companies, brands or providers that provide
sustainable products or services.
Mitigation Measures
-- Utilise market intelligence and deploy digital strategies
for business-to-consumer businesses.
-- Establish customer relationship management programme and
digital commerce capabilities.
-- Engage in longer-term contracts and proactively approach
suppliers for contract renewals.
-- Re-engineer existing business processes.
Financial and Treasury Risk
The Group's activities expose it to a variety of financial
risks, including market risk, credit risk and liquidity risk.
The market risk the Group faces includes i) foreign exchange
risk from future commercial transactions, net investments in
foreign operations and net monetary assets and liabilities that are
denominated in a currency that is not the entity's functional
currency; ii) interest rate risk through the impact of rate changes
on interest bearing liabilities and assets; and iii) securities
price risk as a result of its equity investments and limited
partnership investment funds which are measured at fair value
through profit and loss, and debt investments which are measured at
fair value through other comprehensive income.
The Group's credit risk is primarily attributable to deposits
with banks, contractual cash flows of debt investments carried at
amortised cost and those measured at fair value through other
comprehensive income, credit exposures to customers and derivative
financial instruments with a positive fair value.
The Group may face liquidity risk if its credit rating
deteriorates or if it is unable to meet its financing
commitments.
Mitigation Measures
-- Limiting foreign exchange and interest rate risks to provide
a degree of certainty about costs.
-- Management of the investment of the Group's cash resources so
as to minimise risk, while seeking to enhance yield.
-- Adopting appropriate credit guidelines to manage counterparty risk.
-- When economically sensible to do so, taking borrowings in
local currency to hedge foreign exchange exposures on
investments.
-- A portion of borrowings is denominated in fixed rates.
Adequate headroom in committed facilities is maintained to
facilitate the Group's capacity to pursue new investment
opportunities and to provide some protection against market
uncertainties.
-- The Group's funding arrangements are designed to keep an
appropriate balance between equity and debt from banks and capital
markets, both short and long term in tenor, to give flexibility to
develop the business. The Company also maintains sufficient cash
and marketable securities, and ensures the availability of funding
from an adequate amount of committed credit facilities and the
ability to close out market positions.
-- The Group's Treasury operations are managed as cost centres
and are not permitted to undertake speculative transactions
unrelated to underlying financial exposures.
The detailed steps taken by the Group to manage its exposure to
financial risk are set out in the Financial Review and in a note to
the Financial Statements in the Report.
Concessions, Franchises and Key Contracts Risk
Many of the Group's businesses and projects rely on concessions,
franchises, management, outsourcing or other vital contracts.
Accordingly, cancellation, expiry or termination, or the
renegotiation of any such concession, franchise, management,
outsourcing or other third-party key contracts could adversely
affect the financial condition and results of operations of certain
subsidiaries, associates and joint ventures of the Group.
Mitigation Measures
-- Strengthen existing relationships with the principals through
sustaining substantial market shares and complying with dealer
standards and principals' policies.
-- Monitor sales performance and manufacturer scorecards.
-- Regular communication with franchisees and strengthen quality
assurance programmes to maintain requirements by franchise
principals.
Regulatory and Political Risk
The Group's businesses are subject to several regulatory regimes
in the territories they operate. Changes in such regimes in
relation to foreign ownership of assets and businesses, exchange
controls, planning controls, emission regulations, tax rules, and
employment legislation could potentially impact the operations and
profitability of the Group's businesses.
Changes in the political environment, including political or
social unrest, in the Group's territories, could adversely affect
the Group's businesses.
Mitigation Measures
-- Stay connected and informed of relevant new and draft regulations.
-- Engage external consultants and legal experts where necessary.
-- Raise awareness via principals' brand conference with an
annual update on new regulations that may have been implemented in
other markets.
Pandemic and Natural Disasters Risk
The Group businesses could be impacted by a global or regional
pandemic which seriously affects economic activity or the ability
of businesses to operate smoothly. The pandemic has also created
heightened demand and competition across industries for various
skillsets. In addition, many of the territories in which the Group
operates can experience natural disasters such as earthquakes and
typhoons from time to time.
Mitigation Measures
-- Flexible work arrangements and compliance with hygiene protocols.
-- Supply chain stabilisation includes sourcing backup suppliers
and better coordination with logistics partners.
-- Engage external consultants for climate risk analysis.
-- Business Continuity Plans are tested and audited periodically.
-- Insurance programmes that provide robust cover for natural disasters.
Cybersecurity Risk
The Group's businesses are ever more reliant on technology in
their operations and face increasing cyberattacks from groups
targeting both individuals and businesses. As a result, the privacy
and security of customer and corporate information are at risk of
being compromised through a breach of our or our suppliers' IT
systems or the unauthorised or inadvertent release of information,
resulting in brand damage, impaired competitiveness or regulatory
action. Cyberattacks may also adversely affect our ability to
manage our business operations or operate information technology
and business systems, resulting in business interruption, lost
revenues, repair or other costs.
The potential impact on many of our businesses of disruption to
IT systems or infrastructure, whether due to cyber-crime or other
factors, could be significant. There is also an increasing risk to
our businesses from negative social media commentary, which could
influence customer and other stakeholder behaviours, impact
operations or profitability, or lead to reputational damage.
Mitigation Measures
-- Engage external consultants to perform assessments on the
business units with industry benchmarks.
-- Define cybersecurity programme and centralised function
to provide oversight, manage cybersecurity matters, and
strengthen cyber defences and security measures.
-- Perform regular vulnerability assessment and/or penetration
testing to identify weaknesses.
-- Maintain disaster recovery plans and backup for data restoration.
-- Arrange regular security awareness training at least annually
and phishing testing to raise users' cybersecurity awareness.
Investment, Strategic Transactions and Partnerships Risk
Competition for attractive investment opportunities has
increased with the rise of global investment funds and deep pools
of low-cost capital, supporting a greater appetite by investors
across sectors for strategic transactions and partnerships to
optimise the business portfolio and enhance growth. As the Group's
businesses pursue projects and investments against keen
competitors, they face pressure on the terms they are willing to
secure and accept prized assets and relationships.
In addition, conflicts with strategic partners may arise due to
various reasons such as different corporate cultures and management
styles.
Mitigation Measures
-- Establish Group Investment and Business Development Committee.
-- Conduct sufficient research, due diligence and evaluation of
investment opportunities and potential business partners.
-- Develop clear frameworks and levels of authority for investment or partnership decisions.
-- Regular performance monitoring and strategic reviews of new businesses and projects.
People Risk
The competitiveness of the Group's businesses depends on the
quality of the people that it attracts and retains. Unavailability
of needed human resources may impact the ability of the Group's
businesses to operate at capacity, implement initiatives and pursue
opportunities.
The pandemic has accelerated corporate investments in digital
projects and stimulated global consumer demand for e-commerce. This
has created heightened demand and competition across industries for
various skillsets, particularly in IT and logistics.
Pandemic-related travel restrictions and a more stringent approach
to issuing work visas to non-locals in some of the key markets have
also disrupted the availability of labour across borders,
exacerbating labour shortages as economies rebound.
Mitigation Measures
-- Ensure proactive manpower planning and succession planning are in place.
-- Enhance modern employer branding, training for staff members,
compensation and benefits, talent development plan.
-- Implement strategy to promote diversity and inclusion across the Group.
-- Provide employee retention programmes.
-- Establish employee assistance programmes.
Environmental and climate risk
Global climate change has led to a trend of increased frequency
and intensity of potentially damaging natural events for the
Group's assets and operations. With interest in sustainability
surging in recent years from investors, governments and other
interested parties, expectations by regulators and other
stakeholders for accurate corporate sustainability reporting and
commitments towards carbon neutrality and other sustainability
related goals are also growing. This brings increasing challenges
to the Group and its businesses to meet key stakeholders'
expectations.
Mitigation Measures
-- Sustainability Leadership Council established to mobilise
and coordinate sustainability efforts across the Group.
-- A sustainability strategy framework, including a Climate
Action pillar, drives the Group's sustainability agenda.
-- A Climate Action Working Group, with representatives from
all business units, drives Group-wide initiatives which
strengthen collaboration and share knowledge.
-- A Group-wide climate change policy is being developed to
build climate resilience across Jardines.
-- Developing a plan to make net zero commitments across Group
businesses.
-- Assessing emerging ESG reporting standards and requirements,
to align Group disclosures to best market practice.
-- Conducting climate risk assessments and adaptation action
plans based on recommendations of Task Force on Climate-related
Financial Disclosure (TCFD), including implementing measures
to address physical risks posed by climate change and identifying
opportunities in global transition to a low carbon economy.
Monitoring of Risk Management and Internal Control Systems
The effectiveness of the Company's risk management and internal
control systems is monitored by the internal audit function, which
reports functionally to the Audit Committee of the Company, and by
a series of audit committees or risk management and compliance
committees that operate in each significant business unit across
the Group. The internal audit function also monitors the approach
taken by the business units to managing risk. The findings of the
internal audit function and recommendations for any corrective
action required are reported to the relevant audit committee and,
if appropriate, to the Company's Audit Committee.
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
(a) the consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations
adopted by the International Accounting Standards Board; and
(b) the sections of the Company's 2021 Annual Report, including
the Chairman's Statement and Managing Director's Review and the
Principal Risks and Uncertainties, which constitute the management
report, include a fair review of all information required to be
disclosed by the Disclosure Guidance and Transparency Rules 4.1.8
to 4.1.11 issued by the Financial Conduct Authority of the United
Kingdom.
For and on behalf of the Board
John Witt
Graham Baker
Directors
Dividend Information for Shareholders
The final dividend of US$1.56 per share will be payable on 11th
May 2022, subject to approval at the Annual General Meeting to be
held on 5th May 2022, to shareholders on the register of members at
the close of business on 18th March 2022. The shares will be quoted
ex-dividend on 17th March 2022 and the share registers will be
closed from 21st to 25th March 2022, 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 2021
final dividend by notifying the United Kingdom transfer agent in
writing by 22nd April 2022. The Sterling equivalent of dividends
declared in United States Dollars will be calculated by reference
to a rate prevailing on 27th April 2022.
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 The 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 18th March 2022, 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 17th March 2022.
The Jardine Matheson Group
Jardine Matheson is a diversified Asian-based group with
unsurpassed experience in the region, having been founded in China
in 1832. It has a broad portfolio of market-leading businesses,
which represent a combination of cash generating activities and
long-term property assets and are closely aligned to the
increasingly prosperous consumers of the region. The Group's
businesses aim to produce sustainable returns by providing their
customers with high quality products and services.
Jardine Matheson operates principally in China and Southeast
Asia, where its subsidiaries and affiliates benefit from the
support of the Group's extensive knowledge of the region and its
long-standing relationships. These companies are active 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 and agribusiness.
Jardine Matheson holds interests in Jardine Pacific (100%),
Jardine Motors (100%), Hongkong Land (52%), Dairy Farm (78%),
Mandarin Oriental (79%) and Jardine Cycle & Carriage (75%)
('JC&C'). JC&C in turn has a 50% shareholding in Astra.
Jardine Matheson Holdings Limited is incorporated in Bermuda and
has a primary listing on the London Stock Exchange, with secondary
listings in Bermuda and Singapore. Jardine Matheson Limited
operates from Hong Kong and provides management services to Group
companies.
- end -
For further information, please contact:
Jardine Matheson Limited
Graham Baker / Max Sunarcia (852) 2843 8218 / 8266
Brunswick Group Limited
Sunitha Chalam (65) 6426 8188
Full text of the Preliminary Announcement of Results and the
Preliminary Financial Statements for the year ended 31st December
2021 can be accessed through the internet at www.jardines.com.
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END
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(END) Dow Jones Newswires
March 03, 2022 05:27 ET (10:27 GMT)
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