Interim Results
Jardine Matheson Hldgs Ld
31 July 2002
Jardine Matheson Holdings Limited
Interim Report 2002
Highlights
> Underlying earnings per share increase 45% to
USc28.82*
> Hongkong Land property values decline
> Jardine Strategic bids to increase stake in Cycle &
Carriage to over 50%
> Dairy Farm recovers and sells New Zealand business
> Another good performance from Jardine Lloyd Thompson
'The quality of earnings from the Group's diverse
businesses provides some stability in these volatile
times, but the outcome for full year will depend on the
strength of Asian economies.'
Henry Keswick, Chairman
31st July 2002
* The Group's financial statements are prepared under
International Accounting Standards ('IAS'), which no
longer permit leasehold interests in land to be carried
at valuation. This treatment does not reflect the
generally accepted accounting practice in the territories
in which the Group has significant leasehold interests,
nor how management measures the performance of the Group.
Accordingly, the Group has presented supplementary
financial information prepared in accordance with IAS as
modified by the revaluation of leasehold properties in
addition to the IAS financial statements. The figures
included in the highlights above, the Chairman's
Statement and Operating Review are based on this
supplementary financial information unless otherwise
stated.
The interim dividend of USc7.80 per share will be payable
on 16th October 2002 to shareholders on the register of
members at the close of business on 23rd August 2002 and
will be available in cash with a scrip alternative. The
ex-dividend date will be on 21st August 2002, and the
share registers will be closed from 26th to 30th August
2002, inclusive.
Jardine Matheson Holdings Limited
Interim Report 2002
The year began with a prevailing sense of uncertainty in
many of the Group's markets and, despite a good first-
half performance, there has been little improvement in
sentiment. Progress has been made in a number of the
Group's businesses in refining their scope of activities
and creating opportunities for profitable growth.
Performance
The Company's strong earnings performance in the second
half of 2001 continued into the first six months of 2002
with underlying earnings per share of USc28.82 being
achieved, a 45% increase over the first half of 2001.
Underlying net profit rose 39% to US$109 million.
Among the Group's subsidiaries and affiliates the
majority produced good results. Following the disposal
of its Australian operations, Dairy Farm's contribution
increased, with a better performance from its Hong Kong
supermarkets. Jardine Lloyd Thompson again performed
well. Cycle & Carriage's Indonesian affiliate, Astra
International, responded positively to improved market
sentiment and its reported results also benefited from
the strengthening of the Rupiah. Mandarin Oriental saw
occupancy levels recover in many of its hotels, although
rates remained weak; its result includes the write-back
of development costs following the decision to proceed
with its Washington project. Jardine Pacific's overall
result improved, but several of its companies suffered
from poor consumer sentiment in Hong Kong, where the
weaker market also impacted Jardine Motors Group.
Hongkong Land maintained occupancy, but earnings suffered
from negative reversions in soft rental markets.
Hongkong Land's valuation of its property portfolio at
the end of the half-year recorded a 7% reduction. As
International Accounting Standards require the changes
arising on the revaluation of investment properties to be
taken through the profit & loss account, rather than
directly to reserves, a total non-cash deficit of US$190
million has been set against profit. A US$14 million non-
cash currency translation deficit arising on the sale of
Jardine Motors' French operations has also been
recognized. The result benefited, however, from the
Company's US$124 million share of the profit on disposal
by Dairy Farm of Woolworths New Zealand, and a net profit
of US$32 million was recorded for the half year.
An unchanged interim dividend of USc7.80 per share has
been declared.
Business Developments
The Group has been active in the first half of the year
with a number of initiatives designed to enhance
profitability and concentrate the Group on fewer, but
larger, businesses. Through such initiatives and a focus
on clear performance measures the Group continues to
build its businesses into market leaders, creating
significant growth in value for shareholders.
Hongkong Land's property development projects are
progressing well. Its latest flagship commercial property
in Hong Kong, Chater House, was completed on schedule in
June, and has been over 50% pre-let despite the poor
market. Construction will begin soon on the group's
Singapore joint-venture development, One Raffles Quay,
while the pre-sale of the first phase of its new
residential development in Beijing, Central Park, was
well received with nearly half of the apartments being
sold.
In June, Dairy Farm sold its supermarket business in New
Zealand for a significant premium, giving rise to a gain
of US$225 million. Following the disposal of its
Australasian businesses, the company's focus is now on
growing its Asian operations. Good operating
performance, coupled with the significant improvement in
the group's financial position, has enabled Dairy Farm to
reinstate its dividend.
Mandarin Oriental's underlying performance in the first
half was improved as occupancy levels at most of its
hotels recovered from the depressed conditions prevailing
in the second half of last year, although room rates have
continued to weaken. The group's development plans
remain on track with three key hotel projects in progress
in New York, Washington D.C. and Tokyo.
In July, Jardine Strategic announced a cash partial offer
to increase its holding in Cycle & Carriage to 50.2% and
a related cash offer for its partly-owned subsidiary, MCL
Land. While Cycle & Carriage is facing a number of
challenges in its business, Jardine Strategic remains
confident that the company's management can meet these
challenges over the next few years. An increased stake
of over 50% will place Jardine Strategic in a better
position to support Cycle & Carriage and enables the
company to maintain the advantages of its Singapore
listing with a high level of local ownership. The offer
is conditional upon the approval of the independent
shareholders of Edaran Otomobil Nasional Berhad ('EON'),
which owns a 21% stake in Cycle & Carriage, for EON to
accept it. This process is expected to take some three
months to complete.
Astra International, Cycle & Carriage's 31%-held
Indonesian affiliate, achieved a good trading
performance, but high levels of foreign currency debt
continue to hamper the company. Astra has appointed a
financial adviser to assist in reviewing the options
available so that a decision can be made on the most
appropriate balance sheet strategy.
Jardine Lloyd Thompson has continued to win business and
has been a beneficiary of the hardening insurance
markets. The company has responded well to the
increasing demands from its clients for the limited
capacity that is available.
Jardine Motors Group's new Mercedes-Benz franchise
arrangement in Hong Kong and the reorganization of its
Mercedes-Benz dealer network in the United Kingdom both
took effect in July 2002, and discussions are also
ongoing with Cycle & Carriage's affiliate with regard to
the Malaysian distribution arrangements for Mercedes-
Benz. While these changes will adversely affect future
earnings, the new structures provide a sound base for the
Group's long-term relationships with DaimlerChrysler.
Looking Ahead
In conclusion, the Chairman, Henry Keswick said, 'The
quality of earnings from the Group's diverse businesses
provides some stability in these volatile times, but the
outcome for full year will depend on the strength of
Asian economies.'
Operating Review
Jardine Pacific
Jardine Pacific produced a profit of US$36 million in the
first half, 9% ahead of last year. Trading conditions
were mixed during the early months of the year with weak
consumer sentiment impacting the performance of a number
of businesses. Seasonal factors that would normally
contribute to a stronger second half may be limited by the
uncertain economic outlook and continuing poor corporate
and consumer sentiment.
Jardine Schindler achieved an improved order intake during
the first half and continued to build its maintenance
portfolio. Gammon Skanska's existing projects have been
progressing well, but construction order books are
generally weaker than a year ago and this may impact its
earnings outlook. JEC experienced lower business volumes
in its Hong Kong engineering operations.
HACTL reported 17% growth in air cargo throughput for the
first six months, driven primarily by strong export demand
to the United States and Europe. Earnings fell slightly
at Jardine Aviation due to lower volumes and at Jardine
Shipping as a result of sharply reduced cargo rates.
Jardine OneSolution's markets remained difficult, but
substantial overhead reductions were achieved. Jardine
Restaurants experienced weaker sales in its Hong Kong
outlets, as did IKEA, but a strong performance elsewhere.
Pacific Finance recorded a weaker result following higher
doubtful debt provisioning, although actual delinquency
levels were well below market benchmarks. Jardine
Property Investment sold the Security Centre at the end of
2001 and saw a small drop in yields.
Among other interests, there was a good performance from
EastPoint, the recently rebranded Hong Kong property
management business acquired as part of the disposal of
Colliers Jardine. The results of Jardine Pacific's other
interests generally improved, with the exception of
Jardine Logistics which was held back by weak shipping
rates.
Central overheads increased due to lower tax and pension
write-backs, while finance costs benefited from favourable
interest rates.
Jardine Motors Group
Jardine Motors Group achieved an underlying net profit of
US$21 million for the six months, a reduction of 30% on
the previous year. In Hong Kong, Zung Fu's margins were
under pressure in a weak market, and sales declined in
anticipation of a model change. After-sales activities,
however, remained strong. There was a positive
contribution from Mainland China where the Mercedes-Benz
distribution joint venture, Southern Star, increased
passenger car deliveries and start-up losses incurred on
the expansion of Zung Fu's service centre network were
kept in line with plan.
The performance from the United Kingdom dealerships
continued to improve. There were, however, further
significant expenses incurred in rationalizing the
property portfolio and reorganizing the head office
support units; cost reduction in these areas is being
addressed as a priority. In February the disposal of the
group's French motor operation produced a positive cash
contribution, but charges for cumulative exchange
translation differences led to a net loss being recorded.
The United States operations have achieved improved
results in a resilient import market and are benefiting
from an increase in after-sales capacity.
The new Mercedes-Benz franchise arrangement in Hong Kong
and the reorganization of the Mercedes-Benz dealer network
in the United Kingdom both took effect in July 2002.
While these changes will have an adverse effect on
results, the new structures provide a sound base for
Jardine Motors' long-term relationship with
DaimlerChrysler.
Jardine Lloyd Thompson
Jardine Lloyd Thompson ('JLT') produced a good result for
the first six months achieving significant growth in both
revenue and profits. There was a very strong performance
from its Risk & Insurance Group and steady growth in its
Employee Benefits business. Brokerage and fees grew by
12% to £194 million, and profit before tax (excluding
exceptional items and goodwill amortisation) under UK
accounting standards rose 20% to £51 million. The insurance
market continued to see rising premium rates, tighter terms
and conditions for insurance cover and reduced capacity, and
JLT expects these conditions to continue beyond 2003.
The Risk & Insurance Group, which comprises JLT's
worldwide insurance and reinsurance broking and local
government activities, had a successful first half as it
continued to win new business, control costs and benefit
from the hard market in its commission income. Turnover
grew by 16% to £156 million, and the group enjoyed a very
strong client retention rate.
The Employee Benefits Group, which comprises JLT's pension
administration, outsourcing, employee benefits,
consultancy and US group marketing activities, made an
encouraging start to the year. Revenue in the period grew
by 6% to £38 million. In the United Kingdom, Corporate
Healthcare and Pension Consulting performed strongly.
Administration Services also did well, winning a number of
significant new contracts, which will benefit future
revenues.
Jardine Strategic
Jardine Strategic's underlying earnings per share showed a
significant 82% increase to USc14.96 for the first half,
benefiting from a 77% increase in underlying net profit to
US$97 million and the effect of share repurchases. Dairy
Farm, Mandarin Oriental and Cycle & Carriage all
contributed to the improved profit, while the results from
Jardine Matheson (excluding Jardine Strategic's
contribution) and Hongkong Land were lower. Net asset
value per share at 30th June 2002, based on the market
price of the company's holdings, was US$5.00 compared with
US$4.88 at the prior year end.
Jardine Strategic, which has a 29.1% interest in Cycle &
Carriage, announced a cash partial offer for a further
21.1% at a price of S$4.76 per share. If successful, the
offer will result in Jardine Strategic holding a 50.2%
interest in Cycle & Carriage. Edaran Otomobil Nasional
Berhad ('EON'), which has a 21.1% interest in the company,
has given its acceptance of the partial offer, subject to
the approval of its independent shareholders. In order to
meet regulatory requirements, Jardine Strategic also
announced a cash offer to acquire the 40.29% of MCL Land
that Cycle & Carriage does not own. The offer price of
S$1.09 per share represents a 51% discount to the net
asset value per share of MCL Land as at 31st December
2001.
While Cycle & Carriage is facing a number of challenges in
its business and in relation to its shareholding in Astra
International, it is believed that its management can meet
those challenges over the next few years. It is Jardine
Strategic's intention that Cycle & Carriage should remain
a major Singapore listed company with a high level of
local ownership, able to operate effectively and with
sound financing in its principal markets in Southeast
Asia.
EON's sale of its stake in Cycle & Carriage is part of its
own broader strategy of focusing on its core automotive
distribution and automotive related businesses in Malaysia
where it commands controlling interests. EON, in which
Jardine Strategic has a 19.3% interest, has also announced
its intention to improve its capital structure and return
value to its shareholders by the payment of a special
dividend out of existing resources and from the proceeds
of the sale of its Cycle & Carriage stake.
Hongkong Land
Hongkong Land reported an underlying profit for the first
half of US$96 million, down 16%. Net income from property
was 6% lower as rental reversions remained negative in
Hong Kong's soft property market. Net financing charges
rose as higher gearing following share repurchases offset
the benefit of lower interest rates. Underlying earnings
per share fell 10%, the reduced number of shares in issue
mitigating the effect of lower aggregate earnings. At
30th June 2002, a revaluation of Hongkong Land's property
portfolio recorded a deficit of US$601 million, a decline
of 7% since the prior year end, leading to a reported loss
of US$506 million for the half year. The key driver for
Hongkong Land's earnings is a revival of demand in the
Hong Kong office market, which is dependent upon recovery
in global business confidence, and no material change in
the current trend is expected for the remainder of the
year.
Market rental levels in Hong Kong's Central District fell
some 13% in the first half, although the impact on the
group was smoothed by the reversionary pattern of its
leases. In spite of this challenging market, occupancy in
the group's existing portfolio was maintained. In June,
Hongkong Land obtained an occupation permit for its new
development, Chater House. The property had been over 50%
pre-let, and its major office and retail tenants are now
fitting out space. In Singapore, the group's joint-
venture development with Cheung Kong and Keppel Land is
making progress and will be completed in 2005. In
Beijing, the Central Park residential development joint-
venture received permission to pre-sell in April and,
following an effective marketing campaign in Beijing and
Hong Kong, almost half of the first phase of 600
apartments were sold.
Dairy Farm
Dairy Farm's continuing operations showed substantial
improvement in the first half of 2002, producing an
underlying profit of US$30 million, compared with US$6
million in the same period in 2001. Sales from continuing
operations were US$1,435 million, an increase of 7% over
the prior year. In April, the company repurchased some
ten per cent. of its issued share capital for a total cost
of US$130 million. Dairy Farm sold its New Zealand
supermarket business in June, recording a gain of US$225
million, and is now in a good position to develop its
exclusively Asian-based businesses. The group's improved
trading position has enabled it to reinstate an interim
dividend.
An exceptional performance from Singapore and good
progress from Giant in Malaysia enabled its Southeast Asia
operations to increase sales by 11% and operating profit
by 42% for the period. In North Asia, Mannings and 7-
Eleven in Hong Kong continued to build on their leading
market positions to produce good results. Wellcome Hong
Kong showed some improvement, with a modest increase in
sales and further expense reductions. 7-Eleven in
Southern China continued its new store roll-out programme,
opening 21 outlets in the first half to bring its total to
93 stores. Dairy Farm's restaurant joint-venture,
Maxim's, increased its profit by 24%, and continued to
expand its Starbucks business in Hong Kong and will open
its first Starbucks in Macau and Guangdong Province during
the second half of the year.
Mandarin Oriental
Mandarin Oriental's first half performance was encouraging
as occupancy at most of its hotels recovered from the
depressed levels in the second half of 2001. Total
revenues declined, however, compared with the first half
of 2001 due to the continued weakness in average room
rates. But prudent cost containment, a favourable
interest rate environment and a US$5 million write-back of
development costs for Mandarin Oriental, Washington D.C.
enabled the group to achieve a net profit of US$12 million
for the period, up from US$6 million in the prior year.
No interim dividend was declared given the current uncertain
environment and the group's ongoing development commitments.
Mandarin Oriental's two Hong Kong hotels showed some
improvement in occupancy, but average room rates declined.
Its London hotel has been firmly established as one of
that city's leading properties, achieving an 11% increase
in total revenue against the market trend. In New York,
occupancy levels were up over the prior year, although
rates were soft. There were mixed performances among the
group's associate and managed hotels.
Mandarin Oriental's long-term strategy of being one of the
world's leading luxury hotel groups remains firmly on
course with three significant projects currently under
way. Its new hotel in New York in the AOL/Time Warner
Center is scheduled to open in late 2003. The development
of a luxury hotel in Washington D.C. has commenced, with
completion expected in 2004, and the detailed planning for
its Tokyo hotel has begun.
Cycle & Carriage
Most of the major markets in which Cycle & Carriage
operates experienced steady or improving economies in
the first half of the year, with the exception of
Singapore. Cycle & Carriage's profit excluding exceptional
items was S$124 million for the first six months of 2002,
96% above the comparable period in 2001. Earnings from
the motor vehicle operations, at S$26 million, were down
47% due to a weak performance from its Singapore
operations. Mercedes-Benz sales in Singapore declined
in intense market competition, and margins were also
impacted ahead of the introduction of the new model and
the loss of distributor margin earned in the previous
year on Mercedes-Benz stocks carried over. The contribution
from property for the first six months increased to S$10
million.
Astra International experienced buoyant trading conditions
in Indonesia, with good demand for both motor vehicles and
motorcycles. The operating contribution from Cycle &
Carriage's 31% shareholding in Astra increased materially
to S$98 million. In addition, Cycle & Carriage's share of
the gain arising from the strengthening of the Rupiah was
S$44 million, compared to a significant loss in the
previous year. This was, however, partly offset by the
write-off of deferred tax assets of S$35 million which are
expected to expire prior to utilization.
Astra's high level of foreign currency debt and its
onerous repayment schedule remain a challenge, and Astra
has indicated that it may not be in a position to meet
all its capital repayments as they fall due. A financial
adviser has been appointed by Astra to assist in
reviewing the options available so that a decision can be
made on the most appropriate balance sheet strategy.
------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
------------------------------------------------------------------------------
Prepared in accordance
with IAS as modified by
Prepared in revaluation of
accordance with IAS leasehold properties*
Year Year
ended ended
31st Six months ended 31st Six months ended
December 30th June December 30th June
2001 2001 2002 2002 2001 2001
US$m US$m US$m Note US$m US$m US$m
--------------------------- ---------------------------
9,413 4,958 3,735 2 Revenue 3,735 4,958 9,413
(7,079) (3,752) (2,777) Cost of sales (2,777) (3,751) (7,077)
--------------------------- ---------------------------
2,334 1,206 958 Gross profit 958 1,207 2,336
172 91 29 Other operating income 29 91 172
Selling and distribution
(1,654) (872) (641) costs (641) (872) (1,654)
(557) (282) (229) Administration expenses (229) (282) (557)
(91) (11) (29) Other operating expenses (28) (11) (92)
Net profit on disposal of
- - 225 Woolworths in Dairy Farm 225 - -
Net gain/(loss) on disposal
of Franklins' assets in
38 (12) - Dairy Farm - (12) 38
--------------------------- ---------------------------
242 120 313 3 Operating profit 314 121 243
(161) (79) (60) Net financing charges (60) (79) (161)
Share of operating profit
less net financing charges
of associates and joint
224 119 147 ventures 179 126 261
Impairment of assets
(88) (88) - in Cycle & Carriage - (88) (88)
Decrease in fair value of
investment properties in
- - - Hongkong Land (248) - (246)
Share of results of
associates and joint
136 31 147 4 ventures (69) 38 (73)
--------------------------- ---------------------------
217 72 400 Profit before tax 185 80 9
(101) (47) (67) 5 Tax (67) (46) (103)
--------------------------- ---------------------------
116 25 333 Profit/(loss) after tax 118 34 (94)
(1) 14 (138) Outside interests (86) 12 52
--------------------------- ---------------------------
115 39 195 Net profit/(loss) 32 46 (42)
--------------------------- ---------------------------
--------------------------- ---------------------------
USc USc USc USc USc USc
--------------------------- ---------------------------
6 Earnings/(loss) per share
29.79 10.05 51.66 - basic 8.48 11.69 (10.72)
29.56 10.02 51.48 - diluted 8.45 11.64 (10.72)
6 Underlying earnings per
share
42.81 18.27 26.83 - basic 28.82 19.90 46.32
42.49 18.20 26.74 - diluted 28.72 19.83 45.97
--------------------------- ---------------------------
* The basis of preparation of this supplementary financial
information is set out in note 1.
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Jardine Matheson Holdings Limited
Consolidated Balance Sheet
------------------------------------------------------------------------------
Prepared in accordance
with IAS as modified by
Prepared in revaluation of
accordance with IAS leasehold properties*
At 31st At 31st
December At 30th June December At 30th June
2001 2001 2002 2002 2001 2001
US$m US$m US$m US$m US$m US$m
--------------------------- ---------------------------
Net operating assets
13 33 21 Goodwill 21 33 13
1,392 1,533 1,288 Tangible assets 2,038 2,347 2,141
13 18 14 Investment properties 164 176 163
440 441 458 Leasehold land payments - - -
1,955 2,027 2,018 Associates and joint ventures 2,940 3,368 3,117
868 1,017 959 Other investments 959 1,017 868
26 33 18 Deferred tax assets 18 33 26
90 87 91 Pension assets 91 87 90
2 - - Other non-current assets - - 2
--------------------------- ---------------------------
4,799 5,189 4,867 Non-current assets 6,231 7,061 6,420
768 875 589 Stocks and work in progress 589 875 768
640 657 571 Debtors and prepayments 571 657 640
Bank balances and other
959 927 1,101 liquid funds 1,101 927 959
--------------------------- ---------------------------
2,367 2,459 2,261 Current assets 2,261 2,459 2,367
--------------------------- ---------------------------
(1,625) (1,675) (1,441)Creditors and accruals (1,441)(1,675)(1,625)
(434) (691) (255)Borrowings (255) (691) (434)
(31) (36) (34)Current tax liabilities (34) (36) (31)
(35) (39) (36)Provisions (36) (39) (35)
--------------------------- ---------------------------
(2,125) (2,441) (1,766)Current liabilities (1,766)(2,441)(2,125)
--------------------------- ---------------------------
242 18 495 Net current assets 495 18 242
(2,136) (2,082) (2,187)Long-term borrowings (2,187)(2,082)(2,136)
(59) (69) (55)Deferred tax liabilities (62) (75) (66)
(14) (13) (15)Pension liabilities (15) (13) (14)
(45) (80) (36)Other non-current liabilities (36) (80) (45)
--------------------------- ---------------------------
2,787 2,963 3,069 4,426 4,829 4,401
--------------------------- ---------------------------
Capital employed
153 155 154 Share capital 154 155 153
- - - Share premium - - -
2,515 2,595 2,744 Revenue and other reserves 3,568 3,784 3,501
(641) (638) (650)Own shares held (650) (638) (641)
--------------------------- ---------------------------
2,027 2,112 2,248 Shareholders' funds 3,072 3,301 3,013
760 851 821 Outside interests 1,354 1,528 1,388
--------------------------- ---------------------------
2,787 2,963 3,069 4,426 4,829 4,401
--------------------------- ---------------------------
The basis of preparation of this supplementary financial
information is set out in note 1.
------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Statement of Changes in Shareholders' Funds
------------------------------------------------------------------------------
Prepared in accordance
with IAS as modified by
Prepared in revaluation of
accordance with IAS leasehold properties*
Year Year
ended ended
31st Six months ended Six months ended 31st
December 30th June 30th June December
2001 2001 2002 2002 2001 2001
US$m US$m US$m Note US$m US$m US$m
--------------------------- ---------------------------
At beginning of
2,286 2,286 2,027 period 3,013 3,469 3,469
Revaluation of properties
- net revaluation surplus/
(4) - 1 (deficit) 1 - (44)
1 - - - deferred tax - - 1
Revaluation of other
investments
- fair value gains/
(159) (48) 29 (losses) 29 (48) (159)
- transfer to
consolidated profit
(9) (9) - and loss - (9) (9)
Net exchange translation
differences
(43) (55) 59 - amount arising in period 60 (56) (43)
- transfer to consolidated
15 - 14 profit and loss 14 - 15
Cash flow hedges
(14) (12) (6) - fair value losses (6) (12) (14)
- transfer to consolidated
9 1 3 profit and loss 3 1 9
- recognized in stocks
(1) - - and work in progress - - (1)
1 1 - - deferred tax - 1 1
Net gains/(losses) not
recognized in consolidated
(204) (122) 100 profit and loss accoun 101 (123) (244)
115 39 195 Net profit/(loss) 32 46 (42)
(103) (73) (71) 7 Dividends (71) (73) (103)
2 1 2 Exercise of share options 2 1 2
Scrip issued in lieu of
28 20 15 dividends 15 20 28
(88) (31) (14) Repurchase of shares (14) (31) (88)
Change in attributable
2 - 3 interests 3 - 2
(11) (8) (9) Increase in own shares held(9) (8) (11)
--------------------------- ---------------------------
2,027 2,112 2,248 At end of period 3,07 3,301 3,013
--------------------------- ---------------------------
The basis of preparation of this supplementary
financial information is set out in note 1.
------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
------------------------------------------------------------------------------
Prepared in accordance
with IAS as modified by
Prepared in revaluation of
accordance with IAS leasehold properties*
Year Year
ended ended
31st Six months ended Six months ended 31st
December 30th June 30th June December
2001 2001 2002 2002 2001 2001
US$m US$m US$m Note US$m US$m US$m
--------------------------- ---------------------------
Operating activities
242 120 313 Operating profit 314 121 243
Depreciation and
202 102 84 amortisation 83 101 200
(86) (52) (204) Other non-cash items (204) (52) (85)
Decrease/(increase) in
(2) (119) 23 working capital 23 (119) (2)
37 34 11 Interest received 11 34 37
Interest and other
(187) (105) (68) financing charges paid (68) (105) (187)
(49) (22) (19) Tax paid (19) (22) (49)
--------------------------- ---------------------------
157 (42) 140 140 (42) 157
Dividends from associates
200 104 119 and joint ventures 119 104 200
Cash flows from
357 62 259 operating activities 259 62 357
Investing activities
8a Purchase of subsidiary
(67) (67) (194) undertakings (194) (67) (67)
8b Purchase of associates
(91) (66) (19) and joint ventures (19) (66) (91)
Purchase of other
(21) (14) (8) investments (8) (14) (21)
Purchase of tangible
(208) (86) (100) assets (100) (86) (209)
(1) - - Leasehold land payments - - -
8c Sale of subsidiary
(232) (168) 353 undertakings 353 (168) (232)
Sale of associates and
30 1 2 joint ventures 2 1 30
198 198 1 8d Sale of other investments 1 198 198
Sale of tangible assets
Disposal of Franklins'
51 32 9 assets in Dairy Farm 9 32 51
217 (12) - - (12) 217
Cash flows from
(124) (182) 44 investing activities 44 (182) (124)
Financing activities
2 1 2 Issue of shares 2 1 2
Repurchase of shares
Capital contribution
(88) (15) (14) from outside (14) (15) (88)
6 4 5 5 4 6
6,238 2,039 3,340 Drawdown of borrowings 3,340 2,039 6,238
(6,687) (2,275) (3,426) Repayment of borrowings (3,426) (2,275)(6,687)
Dividends paid by the
(53) (38) (41) Company (41) (38) (53)
Dividends paid to
(44) (30) (26) outside shareholders (26) (30) (44)
Cash flows from
(626) (314) (160) financing activities (160) (314) (626)
Effect of exchange rate
(16) (14) 4 changes 4 (14) (16)
--------------------------- ---------------------------
Net increase/(decrease)in
(409) (448) 147 cash and cash equivalents 147 (448) (409)
Cash and cash equivalents
1,318 1,318 909 at beginning of period 909 1,318 1,318
--------------------------- ---------------------------
Cash and cash equivalents
909 870 1,056 at end of period 1,056 870 909
--------------------------- ---------------------------
The basis of preparation of this supplementary
financial information is set out in note 1.
------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
------------------------------------------------------------------------------
Prepared in accordance
with IAS as modified by
Prepared in revaluation of
accordance with IAS leasehold properties*
Year Year
ended ended
31st Six months ended Six months ended 31st
December 30th June 30th June December
2001 2001 2002 2002 2001 2001
US$m US$m US$m Note US$m US$m US$m
--------------------------- ---------------------------
Group Contribution
75 32 35 Jardine Pacific 36 33 77
54 30 22 Jardine Motors Group 22 30 54
23 12 14 Jardine Lloyd Thompson 14 12 23
15 2 13 Dairy Farm 14 3 15
57 30 29 Hongkong Land 35 35 68
4 4 8 Mandarin Oriental 8 4 4
15 1 16 Cycle & Carriage 16 1 15
243 111 137 Profit from core businesses 145 118 256
(77) (40) (36) Corporate and other interests (36) (40) (77)
--------------------------- ---------------------------
166 71 101 Underlying net profit 109 78 179
Decrease in fair value of
(4) - (1) investment properties (190) - (189)
(47) (32) 95 Other non-recurring items 113 (32) (32)
--------------------------- ---------------------------
115 39 195 Net profit/(loss) 32 46 (42)
--------------------------- ---------------------------
Further analysis of Jardine Pacific
13 4 5 Gammon Skanska 5 4 13
17 6 9 HACTL 9 6 17
5 2 1 IKEA 1 2 5
6 3 3 Jardine Aviation Services 3 3 6
14 4 3 Jardine Engineering Corporation 3 4 14
4 3 2 Jardine OneSolution 2 3 4
5 2 2 Jardine Property Investment 3 3 6
8 4 3 Jardine Restaurants 3 4 8
11 6 7 Jardine Schindler 7 6 11
5 2 2 Jardine Shipping Services 2 2 5
2 2 1 Pacific Finance 1 2 2
(3) - 3 Other businesses 3 - (2)
87 38 41 42 39 89
(12) (6) (6) Corporate (6) (6) (12)
--------------------------- ---------------------------
75 32 35 36 33 77
--------------------------- ---------------------------
Further analysis of Jardine
Motors Group
44 25 15 Hong Kong and Mainland China 15 25 44
5 4 4 United Kingdom 4 4 5
1 1 (1) France (1) 1 1
1 - 2 United States 2 - 1
51 30 20 20 30 51
- (1) 1 Corporate and other interests 1 (1) -
--------------------------- ---------------------------
51 29 21 21 29 51
3 1 1 Amortisation of goodwill 1 1 3
--------------------------- ---------------------------
54 30 22 22 30 54
--------------------------- ---------------------------
The basis of preparation of this supplementary financial
information is set out in note 1.
------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Notes
------------------------------------------------------------------------------
1. Accounting Policies and Basis of Preparation
The unaudited interim condensed financial statements have
been prepared in accordance with IAS 34 - Interim
Financial Reporting.
There have been no changes to the accounting policies
described in the 2001 annual financial statements. As in
2001, the Group is required to account for leasehold land
in respect of investment and other properties at
amortised cost in order to comply with IAS. This
treatment does not reflect the generally accepted
accounting practice in the territories in which the Group
has significant leasehold interests, nor how management
measures the performance of the Group. Accordingly, the
Group has presented supplementary financial information
on pages 10 to 14 and pages 17 to 18 prepared in
accordance with IAS as modified by the revaluation of
leasehold properties.
The Group's reportable segments are set out in note 2 and
are described on pages 5 to 9.
2.Revenue
Prepared in accordance
with IAS
Six months ended 30th
June
2002 2001
US$m US$m
----------------------------
By business:
Jardine Pacific 774 879
Jardine Motors Group 1,047 1,295
Dairy Farm 1,802 2,664
Mandarin Oriental 112 118
Other activities - 2
----------------------------
3,735 4,958
----------------------------
3.Operating Profit
Prepared in accordance
with IAS
Six months ended 30th
June
2002 2001
US$m US$m
----------------------------
By business:
Jardine Pacific 15 21
Jardine Motors Group 13 43
Dairy Farm 24 21
Mandarin Oriental 23 20
----------------------------
75 105
Discontinuing operations
- Woolworths in Dairy Farm 16 10
- Franklins in Dairy Farm - (25)
Net profit on disposal of Woolworths in
Dairy Farm 225 -
Net loss on disposal of Franklins'
assets in Dairy Farm - (12)
Corporate and other interests (3) 42
----------------------------
313 120
----------------------------
4. Share of Results of Associates and Joint Ventures
Prepared in accordance
with IAS
Six months ended 30th
June
2002 2001
US$m US$m
By business:
Jardine Pacific 38 30
Jardine Motors Group 6 3
Jardine Lloyd Thompson 24 17
Dairy Farm 15 12
Hongkong Land 21 46
Mandarin Oriental 7 5
Cycle & Carriage 36 6
----------------------------
147 119
Impairment of assets in Cycle & Carriage - (88)
----------------------------
147 31
----------------------------
5.Tax
Prepared in accordance
with IAS
Six months ended 30th
June
2002 2001
US$m US$m
----------------------------
Company and subsidiary undertakings 24 23
Associates and joint ventures 43 24
----------------------------
67 47
----------------------------
Tax on profits has been calculated at rates of taxation
prevailing in the territories in which the Group operates
and includes United Kingdom tax of US$6 million (2001:
US$6
6. Earnings Per Share
Basic earnings per share are calculated on net profit of
US$195 million (2001: US$39 million) and on the weighted
average number of 378 million (2001: 392 million) shares
in issue during the period. The weighted average number
excludes the Company's share of the shares held by
subsidiary undertakings and the shares held by the
Trustee under the Senior Executive Share Incentive
Schemes.
Diluted earnings per share are calculated on the weighted
average number of 379 million (2001: 393 million) shares
after adjusting for the number of shares which are deemed
to be issued for no consideration under the Senior
Executive Share Incentive Schemes based on the average
share price during the period.
Additional basic and diluted earnings per share
reflecting the revaluation of leasehold properties are
calculated on a net profit of US$32 million (2001: US$46
million) as shown in the supplementary financial
information.
Additional basic and diluted earnings per share are also
calculated based on underlying earnings. The difference
between underlying net profit and net profit is
reconciled as follows:
Prepared in accordance with
IAS as modified by revaluation
Prepared in accordance with IAS of leasehold properties
Six months ended 30th June Six months ended 30th June
2001 2002 2002 2001
US$m US$m US$m US$m
--------------------------- ------------------------
71 101 Underlying net profit 109 78
Decrease in fair value of
investment properties
- - - Hongkong Land (189) -
- (1) - other (1) -
- (1) (190) -
Discontinuing operations
- net profit of Woolworths
3 5 in Dairy Farm 5 3
- net profit on disposal of
- 119 Woolworths in Dairy Farm 119 -
- net loss of Franklins
(15) - in Dairy Farm - (15)
- net loss on disposal of
Franklins' assets in Dairy
(5) - Farm - (5)
Sale and closure of
(17) 124 businesses 124 (17)
- (14) - Cica (14) -
9 3 - other 3 9
9 (11) (11) 9
Asset impairment
(65) - - Astra International - (65)
- (20) - other (2) -
(65) (20) (2) (65)
Fair value gain on conversion
option component of 4.75%
Guaranteed
19 3 Bonds due 2007 3 19
22 - Sale of investments - 22
- (1) Other (1) -
--------------------------- ------------------------
39 195 Net profit 32 46
--------------------------- ------------------------
7. Dividends
Prepared in
accordance with IAS
Six months ended
30th June
2002 2001
US$m US$m
------------------------
Final dividend in respect of 2001 of USc18.70
(2000: USc18.70) per share 115 116
Less Company's share of dividends paid on the shares
held by subsidiary undertakings (44) (43)
------------------------
71 73
------------------------
An interim dividend in respect of 2002 of USc7.80 (2001:
USc7.80) per share amounting to a total of US$48 million
(2001: US$48 million) is declared by the Board. The net
amount after deducting the Company's share of the
dividends payable on the shares held by subsidiary
undertakings of US$19 million (2001: US$18 million) will
be accounted for as an appropriation of revenue reserves
in the year ending 31st December 2002.
8. Notes to Consolidated Cash Flow Statement
Prepared in
accordance with IAS
Six months ended 30th June
2002 2001
(a) Purchase of subsidiary undertakings US$m US$m
------------------------
Tangible assets 5 4
Current assets 2 17
Current liabilities - (20)
------------------------
Fair value at acquisition 7 1
Goodwill attributable to subsidiary undertakings 1 -
------------------------
Total consideration 8 1
Adjustment for deferred consideration - (1)
------------------------
Net cash outflow 8 -
Payment of deferred consideration 2 10
Purchase of shares in Jardine Strategic 37 30
Purchase of shares in Dairy Farm 130 14
Purchase of shares in Mandarin Oriental 17 13
------------------------
194 67
------------------------
8.Notes to Consolidated Cash Flow Statement (continued)
(b) Purchase of associates and joint ventures in the six
months ended 30th June 2001 included Jardine Strategic's
increased interest in Hongkong Land of US$50 million.
Prepared in
accordance with IAS
Six months ended
30th June
2002 2001
(c) Sale of subsidiary undertakings US$m US$m
--------------------------
Goodwill 2 -
Tangible assets 143 4
Associates and joint ventures 2 -
Other investments 1 -
Deferred tax assets 8 -
Current assets 192 381
Current liabilities (151) (317)
Long-term borrowings (65) -
Deferred tax liabilities (4) -
Other non-current liabilities (7) -
Outside interests (1) (1)
--------------------------
Net assets disposed of 120 67
Profit on disposal 226 20
--------------------------
Sale proceeds 346 87
Adjustment for accrual of disposal
costs and deferred consideration 4 (1)
Cash and eqivalents of subsidiary undertakings
disposed of 3 (254)
--------------------------
Net cash inflow/(outflow) 353 (168)
--------------------------
Net cash inflow in 2002 of US$353 million included Jardine
Motors Group's sale of Cica of US$72 million and Dairy
Farm's sale of Woolworths New Zealand of US$274 million.
Net cash outflow in 2001 of US$168 million included a cash
outflow of US$218 million relating to the disposal of
Matheson Bank in the United Kingdom and a cash inflow of
US$50 million relating to Dairy Farm's sale of Sims
Trading.
(d) Sale of other investments in the six months ended
30th June 2001 included Jardine Strategic's interests in
Housing Development Finance Corporation of US$70 million
and J.P. Morgan Chase of US$119 million.
9. Capital Commitments and Contingent Liabilities
At 31st
At 30th June December
2002 2001 2001
US$m US$m US$m
-------------------------------------
(a) Capital commitments 200 144 127
-------------------------------------
(b) Contingent liabilities
- guarantees in respect of facilities made
available to associates and joint
ventures 124 103 102
- other guarantees 5 5 5
-------------------------------------
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
The interim dividend of USc 7.80 per share will be
payable on 16th October 2002 to shareholders on the
register of members at the close of business on 23rd
August 2002, and will be available in cash with a scrip
alternative. The ex-dividend date will be on 21st August
2002, and the share registers will be closed from 26th to
30th August 2002, inclusive. Shareholders will receive
their cash dividends in United States Dollars, unless they
are registered on the Jersey branch register where they
will have the option to elect for Sterling. These
shareholders may make new currency elections by notifying
the United Kingdom transfer agent in writing by 26th
September 2002. The Sterling equivalent of dividends
declared in United States Dollars will be calculated by
reference to a rate prevailing ten business days prior to
the payment date. Shareholders holding their shares
through The Central Depository (Pte) Limited ('CDP') in
Singapore will receive United States Dollars unless they
elect, through CDP, to receive Singapore Dollars or the
scrip alternative.
For further information,
please contact:
Jardine Matheson Limited
Norman Lyle (852) 2843 8216
Matheson & Co. Limited
Martin Henderson (44) 20 7816 8135
Golin/Harris Forrest
Megan Ross (852) 2501 7986
Weber Shandwick Square Mile
Richard Hews/ Trish Featherstone (44) 20 7950 2800
This and other Group announcements can be accessed
through the Internet at 'www.jardines.com'.
Note to Editors
The Jardine Matheson Group
With its portfolio of leading businesses, the Jardine
Matheson Group is a unique Asian-based conglomerate with
unsurpassed experience in the region. These business
interests include Jardine Pacific, Jardine Motors Group,
Hongkong Land, Mandarin Oriental, Dairy Farm, Cycle &
Carriage and Jardine Lloyd Thompson. These operations,
which employ some 130,000 people, are leaders in the
fields of engineering and construction, transportation,
consumer marketing, motor trading, property, hotels,
supermarkets and insurance broking.
The Group's strategy is to build its operations into
market leaders across Asia Pacific, each with the support
of Jardine Matheson's extensive knowledge of the region
and its long-standing relationships. Through a balance
of cash producing activities and investment in new
businesses, the Group aims to produce sustained growth in
shareholder value.
Incorporated in Bermuda, Jardine Matheson has its primary
share listing in London, with secondary listings in
Singapore and in Bermuda. It has a sponsored American
Depositary Receipt programme. Jardine Matheson Limited
operates from Hong Kong and provides management services
to Group companies, making available senior management
and providing financial, legal, human resources and
treasury support services throughout the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
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