TIDMJAR
RNS Number : 9948F
Jardine Matheson Hldgs Ltd
10 November 2022
10th November 2022
For immediate release
Jardine Matheson Holdings Limited
Interim Management Statement
10th November 2022 - Jardine Matheson Holdings Limited today
publishes its Interim Management Statement for the third quarter of
2022.
The performance of most of the Group's businesses continued to
improve in the third quarter, compared with the same period last
year, particularly in Southeast Asia, led by Astra. The Group's
businesses in Hong Kong and on the Chinese mainland, however,
continue to be impacted by pandemic restrictions.
Although the Group saw strong profit growth in the first half of
the year, its full year results will be affected by fewer planned
sales completions and reduced construction activity in Hongkong
Land's Development Properties business on the Chinese mainland, as
well as moderating growth in Southeast Asia (as a result of strong
commodity prices in the second half of 2021). The Group, however,
remains resilient and well-positioned to achieve its long-term
growth objectives, with a strong balance sheet and liquidity
position.
Looking at the individual performances of the Group's
businesses, Jardine Pacific reported an improved overall
performance in the third quarter, with better underlying
performance from a number of businesses, as well as continuing
benefit from Hong Kong government subsidies and other support.
Several businesses, however, remain impacted by the pandemic
restrictions in Hong Kong.
Jardine Pacific's engineering and construction businesses
performed well, with strong contributions from Jardine Schindler,
Gammon and JEC. The Restaurants business delivered lower
profitability, with challenging trading conditions in Hong Kong and
Taiwan. Zung Fu Hong Kong and Macau reported a lower profit, caused
by rising operating costs.
Within Transport Services, Hactl's contribution decreased due to
lower cargo volumes and Jardine Aviation Services reported a higher
loss as flight volumes remained low. Greatview's sales grew, but it
saw lower margins.
The Group's United Kingdom Motors business saw its performance
impacted by new car supply shortages caused by ongoing supply chain
constraints. Zhongsheng's contribution, in respect of the period
from January to June 2022, was slightly lower than the equivalent
period last year, reflecting lower new car sales volumes and gross
margins due to the impact of the pandemic on the Chinese mainland
in the second quarter, although the aftersales and used car
businesses remained resilient.
Hongkong Land's Central office portfolio continued to benefit
from its unique positioning, despite an increase in vacancies
across the city in the period. Vacancy decreased from 5.4% at the
end of June 2022 to 5.1% at the end of September 2022 and was
materially lower than the overall Central Grade A office market
vacancy of 8.3%.
The group's retail portfolio in Hong Kong benefitted from
marginally better trading conditions in the third quarter of the
year, due to a relaxation of social distancing restrictions. The
improved trading conditions resulted in a decline in temporary rent
relief in the period, although the group continues to provide
support to its tenants on a case-by-case basis. The overall
performance of the portfolio, however, continued to be negatively
impacted by a lack of overseas visitors. Physical and committed
retail vacancy at 30th September 2022 remained low at 1.4%.
In the Development Properties business, market sentiment in
respect of residential properties on the Chinese mainland remained
weak, due to pandemic-related restrictions and an uncertain
economic outlook. In the nine months to 30th September 2022, the
group's attributable interest in contracted sales was US$765
million, compared to US$1,618 million in the same period last
year.
Hongkong Land's full-year underlying profits are expected to be
significantly lower than those of the prior year, primarily due to
fewer planned sales completions and the impact of pandemic-related
restrictions on construction activities on the Chinese mainland,
which will result in some completions being deferred from the
second half of 2022 into 2023.
DFI's Health and Beauty, Convenience and IKEA businesses all
benefitted from stronger like-for-like sales growth in the third
quarter compared to the first half and delivered higher profits
than in the equivalent period last year. Grocery Retail, however,
saw flat like-for-like sales in North Asia and weaker like-for-like
sales in Southeast Asia, and overall profitability was lower as the
business continued to be impacted by the higher cost of goods sold;
increasing operating costs (particularly in respect of
electricity); and e-commerce investment costs.
The group's Convenience business saw performance in Hong Kong,
Macau and Singapore improve as pandemic-related movement
restrictions were relaxed or removed. In South China, however,
sales and profits continued to be impacted by pandemic restrictions
and lockdowns.
DFI's Health and Beauty businesses reported a strong sales
performance, which led to a significant increase in underlying
profitability in the third quarter compared to the same period last
year.
The Home Furnishing business saw increasing sales momentum, as
government restrictions eased and stock availability improved, and
profitability also benefitted from strong cost control.
Although DFI's financial performance improved in the third
quarter compared to the first half, pandemic restrictions and
inflationary pressures continue to have a significant adverse
effect. In addition, planned investments in digital capacity will
continue to impact short-term profitability. The group expects
profits in the second half to significantly improve relative to the
first half but, nevertheless, to be below those in the comparable
period last year. Accordingly, full year profits are expected to be
materially lower than in 2021.
The return of normal travel conditions in most of the world in
early 2022 saw Mandarin Oriental record net underlying profits in
the second quarter, and this progress continued in the third
quarter.
In the group's Owned Hotels, improvements in occupancy and high
rates resulted in increased profitability in the third quarter
compared to the second quarter, particularly in Paris and Munich.
Two of the group's key profit-generating hotels, in Hong Kong and
Tokyo, however, remained subject to stringent travel restrictions
throughout the third quarter, which impacted operating performance.
The hotels in Bangkok and Singapore continued their recovery
following the removal of travel barriers.
The Management Business recorded a significant improvement in
profitability in the third quarter compared to the second quarter,
with particularly strong contributions from a number of the group's
Mediterranean and Middle Eastern properties.
The group opened a hotel in Lucerne and a standalone residences
project in Barcelona during the quarter and announced a new hotel
in Tianfu, Chengdu. The sale of the Washington D.C., hotel was
completed in the period.
Jardine Cycle & Carriage ('JC&C') performed well overall
in the third quarter, reflecting improvements across the portfolio.
Astra reported a 49% increase in underlying earnings, excluding
fair value gains from its equity investments, with improvements
across its major divisions, supported by the domestic economic
recovery and higher commodity prices. Astra's automotive division
benefitted from higher car sales, which offset a decline in
motorcycle sales caused by temporary supply chain disruption due to
a shortage of semiconductor chips. Its financial services division
saw higher lending volumes and lower loan loss provisions, while
the heavy equipment and mining division benefitted from higher coal
prices, with increased equipment sales. The agribusiness division
saw higher crude palm oil prices, although these were offset by
lower production.
THACO's automotive performance for the year-to-date improved.
JC&C's Direct Motor Interests saw higher contributions from
Tunas Ridean in Indonesia and Cycle & Carriage Bintang in
Malaysia, partly offset by slightly lower results from Cycle &
Carriage in Singapore.
JC&C's Other Strategic Interests performed well in the first
nine months of the year, mainly due to REE's improved profits from
its hydropower investments. Increased energy costs, however,
adversely impacted Siam City Cement's results.
Jardine Matheson is a diversified Asian-based business group
with unsurpassed experience in the region. Its interests include
Jardine Pacific, Jardine Motors, Hongkong Land, DFI Retail Group,
Mandarin Oriental, Jardine Cycle & Carriage and Astra. These
companies are active in the fields of motor vehicles and related
operations, property investment and development, food retailing,
health & beauty, home furnishings, engineering and
construction, transport services, restaurants, luxury hotels,
financial services, heavy equipment, mining and agribusiness.
Jardine Matheson Holdings Limited is incorporated in Bermuda and
has a primary listing in the standard segment of 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
Jonathan Lloyd (852) 2843 8223
Brunswick Group Limited
William Brocklehurst (852) 5685 9881
This and other Group announcements can be accessed through the
internet at www.jardines.com.
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