Interim Results

RNS Number : 4393A

Jardine Matheson Hldgs Ld

01 August 2008

 



To: Business Editor	1st August 2008
	For immediate release

The following announcement was issued today to a Regulatory Information Service approved by the Financial Services Authority in the United Kingdom.

Jardine Matheson Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2008 

Highlights 

• Strong growth in underlying earnings per share*

• Outstanding contributions from Hongkong Land, Dairy Farm and Astra

• Hongkong Land property portfolio value up 11%

• Interim dividend per share up 20%

'After a good start to the year the current momentum should carry forward to a satisfactory result for 2008, despite some slowing in the second half. The uncertain economic environment makes 2009 difficult to forecast, but all the Group's major businesses have strong balance sheets, which should enable them to support expansion and take advantage of any opportunities that may arise.'

Henry Keswick, Chairman

1st August 2008

Results

(unaudited) Six months ended 30th June
	2008  US$m		2007 US$m	Change %
Underlying profit attributable to shareholders*	448		320	+40
Profit attributable to shareholders	1,018		793	+28
Shareholders' funds†	9,307		8,490	+10
	US$	US$		%
Underlying earnings per share*	1.27		0.90	+41
Earnings per share	2.89		2.24	+29
Interim dividend per share	0.24		0.20	+20
Net asset value per share†	26.33		24.09	+9
* The Group uses 'underlying business performance' in its internal financial reporting to distinguish between the underlying profits and non-trading items, as more fully described in note 8 to the condensed financial statements. Management considers this to be a key measure and has provided this analysis as additional information in order to provide greater understanding of the Group's underlying business performance. † At 30th June 2008 and 31st December 2007, respectively. Net asset value per share is based on the book value of shareholders' funds.

The interim dividend of US¢24.00 per share will be payable on 15th October 2008 to shareholders on the register of members at the close of business on 22nd August 2008 and will be available in cash with a scrip alternative. The ex-dividend date will be on 20th August 2008, and the share registers will be closed from 25th to 29th August 2008, inclusive.

Jardine Matheson Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2008 

Overview

There was strong progress throughout the Group in the first half of the year, with Hongkong Land, Dairy Farm and Astra in particular producing good profit growth.  Inflation is, however, making trading conditions more challenging and this, together with the present economic downturn and lack of liquidity in the United States and Europe, is beginning to have a dampening effect on certain sectors of Asian markets. 

Performance 

The Company's underlying profit for the first six months of 2008 was US$448 million, up 40% over the same period in 2007.  Underlying earnings per share were 41% higher at US$1.27.  The turnover of the Group, including 100% of the turnover of associates and joint ventures, was US$18.5 billion, compared to US$14.9 billion in the first half of 2007.

A further increase in investment property values during the period gave rise to a gain of US$551 million, compared with US$396 million in the first half of 2007, which has been taken through the profit and loss account. Non-trading items for the period also included the Company's share of gains on disposals within Jardine Pacific and Dairy Farm. After non-trading items, the Company's profit attributable to shareholders was US$1,018 million. 

The Board has declared an interim dividend of US¢24.00 per share, an increase of 20%.

Business Activity

Jardine Pacific's operations produced a satisfactory performance overall in the period with good results from its engineering and construction activities.  An additional franchise for an air cargo terminal at Hong Kong International Airport was awarded in March which will have a detrimental effect on the profitability of HACTL's air-cargo operation when the new facility completes in 2011.

Jardine Motors' earnings declined due to a lower contribution from its United Kingdom network resulting from a weaker market and the absence of one-off property gains. Zung Fu in Hong Kong and Macau, however, continued to perform well, as did its growing Mercedes-Benz dealership activities in Southern China.

In challenging markets Jardine Lloyd Thompson did well to report profit growth in the first half, due in no small part to the progress made over the past two years in repositioning the business and removing costs.

Dairy Farm achieved good increases in sales and profit with all its major retail formats enjoying favourable trading conditions. The group's expansion continued with the number of its outlets growing by 167 during the period to reach 4,359. There was an improved performance from its operations in Indonesia resulting from changes implemented over the past year, and Dairy Farm increased its direct interest in the business in April.

Hongkong Land's excellent result for the first half reflected a further strengthening of commercial property markets in Hong Kong and Singapore and a greater contribution from residential developments. While property markets are expected to slow and inflationary pressures are building, positive rental reversions will continue in its portfolios, and profits will also be recognized upon the completion of residential developments already sold. 

Mandarin Oriental's hotels benefited from improved room rates in the first half of the year, but there were signs of weakness in some markets, particularly in the United States. The group's growth continued with the announcement of a management contract for a new luxury hotel in Moscow upon its completion in 2011, which brings to 19 the number of hotels it has under development. 

Jardine Cycle & Carriage's excellent profit growth in the first half came from a fine contribution from Astra, which saw improved results from all its major operations. In particular, Astra's automotive and motorcycle businesses achieved increased sales as markets strengthened, while its palm oil plantations enjoyed record prices and improved production. Jardine Cycle & Carriage's own motor dealership interests also increased their profit contribution, and in July the group acquired a 20% stake in a leading Vietnamese automotive company. 

A somewhat lower contribution from Rothschilds Continuation Holdings reflected the present unsettled state of global financial markets.

Outlook

After a good start to the year the current momentum should carry forward to a satisfactory result for 2008, despite some slowing in the second half. The uncertain economic environment makes 2009 difficult to forecast, but all the Group's major businesses have strong balance sheets, which should enable them to support expansion and take advantage of any opportunities that may arise.

Henry Keswick

Chairman 

1st August 2008

  Operating Review

Jardine Pacific

Jardine Pacific's underlying profit increased by 6% to US$55 million. The revaluation of the group's residential property investment portfolio also gave rise to a non-trading gain net of deferred tax of US$10 million. The business outlook for the second half of the year is for a more challenging environment. 

Hong Kong Air Cargo Terminals performed slightly better than in the first half of 2007 as a 6% increase in cargo throughput helped offset the impact of increased costs.  Jardine Aviation Services' profit declined due to higher operating costs in a more difficult aviation market.  Jardine Shipping Services enjoyed a good first half as volumes rose, although freight rates are softening.

Gammon's contribution improved further, and its prospects remain promising with a good level of work having been secured.  Jardine Schindler benefited from stronger results in Hong Kong and Malaysia, and also has a healthy order book.  JEC experienced pressure on margins in Hong Kong, but was helped by good performances in Thailand and the Philippines.

Jardine Restaurants recorded lower earnings following a significant increase in food costs in Hong Kong. JOS achieved an increase in sales, but its profit contribution was little changed due to higher operating costs.  

Jardine Motors

Jardine Motors' underlying profit for the period was down 7% at US$32 million, which reflected more difficult market conditions in the United Kingdom and the absence of property gains recorded in the first half of 2007. 

In Hong Kong, Zung Fu performed well as it increased deliveries of Mercedes-Benz passenger cars and maintained its leading position in the luxury car market. The contribution from its service centres was higher. Good growth in deliveries of Mercedes-Benz in Macau also led to improved profits.

Zung Fu's Mercedes-Benz dealerships in Southern China continued their profitable growth with further increases in new car deliveries, although there has been some slowing in recent months. The aftersales business benefited from the higher volumes. The dealership network is expected to reach 17 outlets by the year end.

In the United Kingdom, there has been a weakening new vehicle demand and a reduction in used car margins. This, together with the absence of property disposal gains, has led to lower earnings for the group compared to the same period last year. 

Market conditions are not expected to improve in the second half of the year, particularly in the United Kingdom, and the full-year result is unlikely to match that of 2007.

Jardine Lloyd Thompson

Against a background of ongoing challenging trading conditions, Jardine Lloyd Thompson achieved a good overall performance in the first six months of 2008 that reflected the work undertaken to reposition the business and improve operational efficiency.

Turnover benefited from both organic growth and the impact of bolt-on acquisitions, rising by 9% to US$528 million for the six months. The underlying trading margin was unchanged at 17%, while underlying trading profit from continuing operations was 9% higher at US$87 million. The Risk & Insurance group, comprising the company's worldwide retail operations and its specialist risk and insurance businesses, achieved a good improvement in both revenue and trading profit despite difficult markets. The Employee Benefits business in the United Kingdom also continued to make progress.

Jardine Lloyd Thompson remains well placed to achieve further profitable growth for the year as a whole.

Hongkong Land

Hongkong Land's underlying profit grew 56% to US$242 million in the first half of 2008.   The group's commercial investment property interests at the end of June were valued at US$16.7 billion, an increase of 11% over the six months. The profit attributable to shareholders, which incorporates the revaluation surplus net of deferred tax of US$1,381 million, was US$1,629 million.

Strong demand in the group's Hong Kong Central office portfolio led to a vacancy rate of just 1.7% at the end of June, while the retail element was fully leased. In Singapore, the group's wholly-owned and joint venture properties were also fully let, and construction at Marina Bay Financial Centre, in which it holds a one-third interest, is attracting good pre-leasing commitments prior to a two-phased completion in 2010 and 2012.

In the residential sector, MCL Land's first-half result benefited from completions in Singapore and Malaysia, and two further completions are expected by the year end.  Construction of Hongkong Land's two projects in Hong Kong is progressing well, as is the mixed use joint venture development in Macau. In mainland China the first phase of its 50%-owned joint venture residential development in Chongqing has been substantially pre-sold, and pre-selling of units in the second phase has begun. Its 30%-owned joint venture in Shenyang has increased its land holdings to some one million square metres.

There are signs of more difficult conditions ahead with property markets slowing and inflationary pressures building in key sectors.  The earnings outlook, however, remains encouraging as the group will continue to benefit from positive rental reversions and residential completions.

Dairy Farm

Dairy Farm enjoyed generally favourable trading conditions in its major markets during the first half of the year. Sales, including 100% of associates, rose by 18% to US$3.8 billion, and underlying net profit increased by 40% to US$141 million. The profit attributable to shareholders of US$154 million benefited from non-trading gains of US$13 million, principally from the sale of a 50% interest in CJ Olive Young in Korea. 

The group's operations in Hong Kong and Macau continued to perform well. In Taiwan, new format stores achieved satisfactory results, but IKEA remained below expectations despite making some progress. In Southern China, the group has increased its number of 7-Eleven outlets to 464, and there were improved results from its 39 Mannings health and beauty stores. The group's associate, Maxim's, faced significant rises in ingredient costs, although it was able to achieve growth in sales and profit.  

Increases in both sales and profit were achieved in Malaysia as the group expanded its activities in both peninsular and East Malaysia. Enhancements to Dairy Farm's Indonesian operations have started to deliver results, and an additional 25% direct interest was acquired in PT Hero pursuant to an option agreement. Results improved in Singapore, including the contribution from 7-Eleven which benefited from the re-branding of 62 former Shell stores. The group now has three Wellcome supermarkets operating in Vietnam, and its supermarket joint venture in India maintained a moderate rate of store expansion in a highly competitive sector. 

Despite the more challenging economic outlook, Dairy Farm is trading well and the prospects for the full year are positive.  

Mandarin Oriental

Mandarin Oriental had a satisfactory start to the year against a background of weakening economic conditions. Its profit attributable to shareholders was US$36 million, compared with US$34 million in the same period in 2007 after excluding a property gain. 

Trading conditions in several of the group's key markets remained stable, and while softening demand in some hotels did lead to lower occupancy the effect was offset by increases in room rates. Its two wholly-owned Hong Kong hotels continued to perform well, and the group benefited from resilient demand from leisure travellers in London. Its Tokyo property suffered from reduced activity in the financial services sector, and its 80%-owned hotel in Washington D.C. also saw lower occupancy. The contribution from associate and joint venture hotels rose due to revenue growth in some properties, particularly Singapore and Bangkok.  

Mandarin Oriental now operates, or has under development, 40 hotels representing over 10,000 rooms in 24 countries.  It recently announced that it will manage a new 237-room luxury hotel in Moscow when completed in 2011. This brings the number of hotels it has under development to 19, all but one of which will be managed on behalf of third-party owners. The group's next hotel to open will be in Boston in October of this year, however, some of its development projects are experiencing delays.

The group's performance for the remainder of the year will depend on overall economic conditions, which are likely to become more challenging.  

Jardine Cycle & Carriage

Jardine Cycle & Carriage enjoyed an exceptional first half as improvements across all the group's major business segments enabled revenues to grow by 38% to US$5,719 million. Underlying profit increased 73% to US$264 million, reflecting an excellent contribution from Astra that rose 73% to US$254 million. Profit attributable to shareholders was also 73% higher at US$265 million.

The underlying profit contribution from Jardine Cycle & Carriage's other motor interests rose by 33% to US$25 million, with the Singapore motor operations and 38%-owned Indonesian associate, Tunas Ridean, contributing most of the increase.  In Malaysia, 59%-owned Cycle & Carriage Bintang, which produced a modest profit contribution in a difficult market, has completed a restructuring and declared a special dividend that will benefit Jardine Cycle & Carriage by some US$21 million.  In July, Jardine Cycle & Carriage acquired a 20% interest in Truong Hai Auto Corporation, the second largest automobile group in Vietnam, for approximately US$77 million. Truong Hai Auto has a full range of automotive operations including manufacturing, distribution and retail.

The rate of profit growth for Jardine Cycle & Carriage for the full year is expected to be lower with some concern in Indonesia over inflation and higher interest rates. 

Astra 

Astra benefited from favourable trading conditions and continuing high palm oil prices in the first half of 2008 and reported a net profit, under Indonesian accounting standards, equivalent to US$515 million, an increase of 81%.  

The Indonesian wholesale motor vehicle market grew by 48% to 293,000 units in the first six months of 2008. Astra's sales grew by 41% to 148,000 units, leading to a decline in its market share from 53% to 51%. The wholesale motorcycle market in Indonesia grew by 44% to 3.1 million units during the same period. The Astra Honda Motor manufacturing and distribution joint venture increased its sales by 52% to 1.4 million units, resulting in its market share rising from 44% to 46%. Astra Otoparts produced improved results following increases in sales, higher margins and lower operating expenses.  Astra's consumer finance operations also benefited from the strong automotive market, while Bank Permata's results were ahead of the same period last year due to improved net interest income and lower operating expenses.

Astra Agro Lestari reported net profit up 134% after a 59% rise in crude palm oil prices achieved and a 20% growth in palm oil production due to an enlarged planted area and better weather conditions. Astra's heavy equipment operations continued their good performance, with United Tractors reporting a profit for the six months equivalent to US$131 million, up 118%.  Sales of Komatsu equipment rose by 44% to 2,500 units, and the company's coal mining subsidiary produced a 23% increase in the volume of coal extracted and a 31% increase in overburden removed. United Tractors completed the acquisition in February of a controlling interest in a coal mining concession in Central Kalimantan. It has recently announced a rights issue to raise some US$390 million to refinance this acquisition and to provide funding for its working capital requirements and further investments, particularly in the mining sector.

Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
	(unaudited) Six months ended 30th June						Year ended 31st December
	2008			2007			2007
	Underlying			Underlying			Underlying
	business	Non-trading		business	Non-trading		business	Non-trading
	performance	items	Total	performance	items	Total	performance	items		Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m		US$m
Revenue (note 2)	11,467	-	11,467	9,189	-	9,189	19,445	-		19,445
Net operating costs (note 3)	(10,432)	32	(10,400)	(8,543)	94	(8,449)	(17,916)	252		(17,664)
Operating profit (note 4)	1,035	32	1,067	646	94	740	1,529	252		1,781
Financing charges	(76)	-	(76)	(127)	-	(127)	(219)	-		(219)
Financing income	48	-	48	68	-	68	121	-		121
								-
Net financing charges	(28)	-	(28)	(59)	-	(59)	(98)	-		(98)
Share of results of associates and joint ventures (note 5)	345	677	1,022	257	510	767	542	1,114		1,656
Profit before tax	1,352	709	2,061	844	604	1,448	1,973	1,366		3,339
Tax (note 6)	(319)	(6)	(325)	(174)	(11)	(185)	(415)	(40)		(455)
Profit after tax	1,033	703	1,736	670	593	1,263	1,558	1,326		2,884
Attributable to:
Shareholders of the Company	448	570	1,018	320	473	793	719	1,109		1,828
Minority interests	585	133	718	350	120	470	839	217		1,056
	1,033	703	1,736	670	593	1,263	1,558	1,326		2,884
			US$			US$				US$
Earnings per share (note 7)
- basic			2.89			2.24				5.16
- diluted			2.81			2.19				5.03

Jardine Matheson Holdings Limited Consolidated Balance Sheet
								(unaudited)			At 31st
						At 30th June					December
					2008			2007			2007
					US$m			US$m			US$m
Assets
Intangible assets					2,008			1,831			1,883
Tangible assets					3,518			3,021			3,149
Investment properties					361			267			355
Plantations					560			474			515
Associates and joint ventures					8,795			7,168			7,964
Other investments					623			659			728
Non-current debtors					1,146			983			1,002
Deferred tax assets					121			118			114
Pension assets					215			173			215
Non-current assets					17,347			14,694			15,925
Stocks and work in progress					1,805			1,478			1,610
Current debtors					2,665			2,408			2,322
Current investments					37			12			21
Current tax assets					90			140			154
Bank balances and other liquid funds
- non-financial services companies					2,191			2,292			1,966
- financial services companies					158			233			167
					2,349			2,525			2,133
					6,946			6,563			6,240
Non-current assets classified as held for sale (note 9)					48			10			48
Current assets					6,994			6,573			6,288
Total assets					24,341			21,267			22,213
Equity
Share capital					155			154			155
Share premium and capital reserves					32			33			25
Revenue and other reserves					10,118			8,102			9,266
Own shares held					(998)			(927)			(956)
Shareholders' funds (note 10)					9,307			7,362			8,490
Minority interests					5,707			4,846			5,208
Total equity					15,014			12,208			13,698
Liabilities
Long-term borrowings
- non-financial services companies					1,970			1,988			2,037
- financial services companies					648			680			616
					2,618			2,668			2,653
Deferred tax liabilities					675			572			599
Pension liabilities					114			152			126
Non-current creditors					84			61			67
Non-current provisions					46			36			42
Non-current liabilities					3,537			3,489			3,487
Current creditors					3,874			3,267			3,375
Current borrowings
- non-financial services companies					720			1,205			547
- financial services companies					849			854			806
					1,569			2,059			1,353
Current tax liabilities					270			179			230
Current provisions					71			65			68
					5,784			5,570			5,026
Liabilities directly associated with non-current assets classified as held for sale (note 9)
					6			-			2
Current liabilities					5,790			5,570			5,028
Total liabilities					9,327			9,059			8,515
Total equity and liabilities					24,341			21,267			22,213

Jardine Matheson Holdings Limited
Consolidated Statement of Recognized Income and Expense
														Year
										(unaudited)				ended
							Six months ended							31st
										30th June				December
						2008				2007				2007
						US$m				US$m				US$m
Surpluses on revaluation of properties						-				1				114
(Losses)/gains on revaluation of other investments						(194)				124				176
Actuarial gains on defined benefit pension plans						2				16				86
Net exchange translation differences						143				(2)				(87)
Gains/(losses) on cash flow hedges						18				3				(8)
Tax on items taken directly to equity						1				(24)				(26)
Net (expense)/income recognized directly in equity						(30)				118				255
Transfer to profit and loss on disposal of other investments
						(4)				(44)				(59)
Transfer to profit and loss on realization of exchange reserves
						(2)				(7)				(7)
Transfer to profit and loss in respect of cashflow hedges
						1				1				2
Profit after tax						1,736				1,263				2,884
Total recognized income and expense for the period						1,701				1,331				3,075
Attributable to:
Shareholders of the Company						931				861				2,063
Minority interests						770				470				1,012
						1,701				1,331				3,075

Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
														Year
										(unaudited)				ended
							Six months ended							31st
										30th June				December
						2008				2007				2007
						US$m				US$m				US$m
Operating activities
Operating profit						1,067				740				1,781
Depreciation and amortization						267				232				479
Other non-cash items						60				(17)				(51)
(Increase)/decrease in working capital						(318)				150				77
Interest received						47				60				116
Interest and other financing charges paid						(81)				(113)				(214)
Tax paid						(235)				(115)				(295)
						807				937				1,893
Dividends from associates and joint ventures						332				166				305
Cash flows from operating activities						1,139				1,103				2,198
Investing activities
Purchase of subsidiary undertakings (note 12(a))						(286)				(18)				(184)
Purchase of associates and joint ventures (note 12(b))						(98)				(105)				(113)
Purchase of other investments (note 12(c))						(74)				(27)				(74)
Purchase of land use rights						(51)				(3)				(36)
Purchase of other intangible assets						(14)				(50)				(27)
Purchase of tangible assets						(365)				(263)				(615)
Purchase of investment properties						(2)				(3)				(6)
Purchase of plantations						(34)				(16)				(41)
Advance of mezzanine loans						(2)				(3)				(3)
Repayment of mezzanine loans						-				12				12
Capital distribution from associates						22				12				14
Sale of subsidiary undertakings (note 12(d))						(38)				7				6
Sale of associates and joint ventures (note 12(e))						27				102				127
Sale of other investments (note 12(f))						19				72				127
Sale of land use rights						7				12				14
Sale of tangible assets						19				38				56
Sale of investment properties						9				-				7
Cash flows from investing activities						(861)				(233)				(736)
Financing activities
Issue of shares						2				1				1
Repurchase of shares						-				-				(13)
Capital contribution from minority shareholders						6				1				5
Drawdown of borrowings						7,200				2,700				8,075
Repayment of borrowings						(7,060)				(3,396)				(9,512)
Dividends paid by the Company						(101)				(81)				(126)
Dividends paid to minority shareholders						(117)				(97)				(290)
Cash flows from financing activities						(70)				(872)				(1,860)
Effect of exchange rate changes						19				1				(11)
Net increase/(decrease) in cash and cash equivalents						227				(1)				(409)
Cash and cash equivalents at beginning of period						2,082				2,491				2,491
Cash and cash equivalents at end of period						2,309				2,490				2,082

Jardine Matheson Holdings Limited
Analysis of Profit Contribution
														Year
										(unaudited)				ended
						Six months ended								31st
										30th June				December
						2008				2007				2007
						US$m				US$m				US$m
Group contribution
Jardine Pacific						55				52				115
Jardine Motors Group						32				34				63
Jardine Lloyd Thompson						23				20				33
Hongkong Land						93				58				131
Dairy Farm						89				63				161
Mandarin Oriental						23				21				47
Jardine Cycle & Carriage						13				10				22
Astra						127				71				178
Corporate and other interests						(7)				(9)				(31)
Underlying net profit						448				320				719
Increase in fair value of investment properties						551				396				1,015
Other non-trading items						19				77				94
Profit attributable to shareholders						1,018				793				1,828
Analysis of Jardine Pacific's contribution
Gammon						10				9				16
HACTL						15				14				33
Jardine Aviation Services						2				3				8
JEC						4				4				12
JOS						6				6				14
Jardine Property Investment						1				1				3
Jardine Restaurants						9				10				17
Jardine Schindler						10				9				18
Jardine Shipping Services						3				2				5
Corporate and other interests						(5)				(5)				(11)
Continuing businesses						55				53				115
Discontinued businesses						-				(1)				-
						55				52				115
Analysis of Jardine Motors Group's contribution
Hong Kong and Mainland China						23				20				41
United Kingdom						9				15				23
Corporate						-				(1)				(1)
						32				34				63

Jardine Matheson Holdings Limited
Notes to Condensed Financial Statements
1.		Accounting Policies and Basis of Preparation
		The condensed financial statements have not been audited or reviewed by the Group's auditor pursuant to the UK Auditing Practices Board guidance on the review of interim financial information. The condensed financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting.
		In 2008, the Group adopted the following interpretations to existing standards which are relevant to its operations:
		IFRIC 11	IFRS 2 - Group and Treasury Share Transactions
		IFRIC 12	Service Concession Arrangements
		IFRIC 14	IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
		There have been no changes to the accounting policies described in the 2007 annual financial statements as a result of adoption of the above interpretations.
		Certain comparative figures have been reclassified to conform with the current period presentation.
		The Group's reportable segments are set out in note 2 and are described above.
2.		Revenue
											Six months ended 30th June
											2008							2007
											US$m							US$m
		By business:
		Jardine Pacific									598							535
		Jardine Motors Group									1,567							1,479
		Dairy Farm									3,315							2,796
		Mandarin Oriental									266							250
		Jardine Cycle & Carriage									691							642
		Astra									5,028							3,486
		Other activities									2							1
											11,467							9,189

3.		Net Operating Costs
										Six months ended 30th June
										2008				2007
										US$m				US$m
		Cost of sales								(8,745)				(7,081)
		Other operating income								108				179
		Selling and distribution costs								(1,228)				(1,072)
		Administration expenses								(522)				(465)
		Other operating expenses								(13)				(10)
										(10,400)				(8,449)
4.		Operating Profit
								Six months ended 30th June
										2008				2007
										US$m				US$m
		By business:
		Jardine Pacific								30				37
		Jardine Motors Group								54				59
		Dairy Farm								186				113
		Mandarin Oriental								42				70
		Jardine Cycle & Carriage								30				21
		Astra								745				415
										1,087				715
		Corporate and other interests								(20)				25
										1,067				740
		Operating profit included the following gains/(losses) from non-trading items:
		Increase in fair value of investment properties								10				-
		Sale and closure of businesses								19				30
		Sale of investments								1				47
		Sale of property interests								3				-
		Restructuring of businesses								(2)				-
		Realization of exchange gains*								1				7
		Discount on acquisitions								-				9
		Dilution of interest in a subsidiary undertaking								(2)				-
		Value added tax recovery in Jardine Motors Group								2				-
		Other								-				1
										32				94
	* Arising on repatriation of capital from foreign subsidiary undertakings.

5.					Share of Results of Associates and Joint Ventures
																				Six months ended 30th June
																					2008															2007
																					US$m															US$m
					By business:
					Jardine Pacific																48															39
					Jardine Lloyd Thompson																23															38
					Hongkong Land																782															569
					Dairy Farm																12															11
					Mandarin Oriental																9															8
					Jardine Cycle & Carriage																5															4
					Astra																127															86
					Corporate and other interests																16															12
																					1,022															767
					Share of results of associates and joint ventures included the following gains/(losses) from non-trading items:
					Increase in fair value of investment properties																668															496
					Sale and closure of businesses																4															(3)
					Sale of investments																3															-
					Sale of property interests																2															-
					Restructuring of businesses																-															17
																					677															510
					Results are shown after tax and minority interests in the associates and joint ventures.
6.					Tax
																				Six months ended 30th June
																					2008													2007
																					US$m													US$m
					Current tax																338													193
					Deferred tax																(13)													(8)
																					325													185
					Greater China																30													26
					Southeast Asia																286													137
					United Kingdom																7													8
					Rest of the world																2													14
																					325													185
					Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
					Share of tax of associates and joint ventures of US$150 million (2007: US$166 million) are included in share of results of associates and joint ventures.
7.			Earnings per Share
			Basic earnings per share are calculated on profit attributable to shareholders of US$1,018 million (2007: US$793 million) and on the weighted average number of 353 million (2007: 354 million) shares in issue during the period.
			Diluted earnings per share are calculated on profit attributable to shareholders of US$994 million (2007: US$777 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiary undertakings, associates or joint ventures, and on the weighted average number of 354 million (2007: 355 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.
			The weighted average number of shares is arrived at as follows:
																			Ordinary shares
																			in millions
																			2008								2007
			Weighted average number of shares in issue																621								617
			Shares held by the Trustee under the Senior Executive Share Incentive Schemes																(1)								(2)
			Company's share of shares held by subsidiary undertakings																(267)								(261)
			Weighted average number of shares for basic earnings per share calculation																353								354
			Adjustment for shares deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes																1								1
			Weighted average number of shares for diluted earnings per share calculation																354								355

		Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below:
						Six months ended 30th June
						2008						2007
								Basic		Diluted				Basic		Diluted
								earnings		earnings				earnings		earnings
								per share		per share				per share		per share
						US$m		US$		US$		US$m		US$		US$
		Profit attributable to shareholders				1,018		2.89		2.81		793		2.24		2.19
		Non-trading items (note 8)				(570)						(473)
		Underlying profit attributable to shareholders				448		1.27		1.27		320		0.90		0.90

8.		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 plantations; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.
		An analysis of non-trading items after interest, tax and minority interests is set out below:
													Six months ended 30th June
													2008							2007
													US$m							US$m
		Increase in fair value of investment properties
		-	Hongkong Land										541							396
		-	other										10							-
													551							396
		Sale and closure of businesses
		-	50% interest in Olive Young										8							-
		-	25% interest in Mandarin Oriental, New York										-							9
		-	other										4							4
													12							13
		Sale of investments											3							37
		Sale of property interests											3							-
		Restructuring of businesses											-							17
		Realization of exchange gains*											-							7
		Discount on acquisitions											-							2
		Dilution of interest in a subsidiary undertaking											(1)							-
		Value added tax recovery in Jardine Motors Group											2							-
		Other											-							1
													570							473
	* Arising on repatriation of capital from foreign subsidiary undertakings.

9.		Non-current Assets Classified as Held for Sale
		The major classes of assets and liabilities classified as held for sale are set out below:
																		At 31st
											At 30th June							December
									2008					2007				2007
									US$m					US$m				US$m
		Tangible assets							41					3				39
		Investment properties							-					7				2
		Associates and joint ventures							-					-				7
		Current assets							7					-				-
		Total assets							48					10				48
		Deferred tax liabilities							1					-				2
		Current liabilities							5					-				-
		Total liabilities							6					-				2
		Non-current assets classified as held for sale at 31st December 2007 included Dairy Farm's 50% interest in Olive Young with a carrying value of US$7 million and its interest in a retail property in Malaysia with a carrying value of US$33 million. The sale of Olive Young was completed in February 2008 and resulted in a profit before tax of US$14 million, which was included in other operating income. The retail property remained unsold at 30th June 2008.

10.		Shareholders' Funds
											Six months ended 30th June
											2008					2007
											US$m					US$m
		At 1st January									8,490					6,594
		Recognized income and expense attributable to shareholders									931					861
		Dividends (note 11)									(159)					(141)
		Employee share option schemes
		-	value of employee services								5					3
		-	exercise of share options								3					1
		Scrip issued in lieu of dividends									79					78
		Change in attributable interests									-					1
		Increase in own shares held									(42)					(35)
		At 30th June									9,307					7,362
11.		Dividends
									Six months ended 30th June
											2008					2007
											US$m					US$m
		Final dividend in respect of 2007 of US¢45.00 (2006: US¢40.00) per share									279					246
		Company's share of dividends paid on the shares held by subsidiary undertakings									(120)					(105)
											159					141
		An interim dividend in respect of 2008 of US¢24.00 (2007: US¢20.00) per share amounting to a total of US$149 million (2007: US$123 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$64 million (2007: US$53 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2008.

12.		Notes to Consolidated Cash Flow Statement
											Six months ended 30th June
													2008															2007
											Book		Fair value								Fair							Fair
											value		adjustments								value							value
		(a)			Purchase of subsidiary undertakings						US$m		US$m								US$m							US$m
						Intangible assets					4		-								4							2
						Tangible assets					1		231								232							3
						Current assets					3		-								3							31
						Deferred tax liabilities					-		(70)								(70)							-
						Pension liabilities					-		-								-							(1)
						Non-current creditors					-		-								-							(1)
						Current liabilities					(2)		-								(2)							(20)
						Net assets					6		161								167							14
						Adjustment for minority interests															(50)							-
						Net assets acquired															117							14
						Goodwill															4							6
						Total consideration														121							20
						Adjustment for carrying value of associates and joint ventures														(1)							-
						Cash and cash equivalents of subsidiary undertakings
							acquired													-							(2)
						Net cash outflow														120							18
						Increase in interest in Jardine Strategic														19							-
						Increase in interest in Mandarin Oriental														1							-
						Increase in interest in Jardine Cycle & Carriage														86							-
						Increase in interests in other subsidiary undertakings														60							-
																				286							18
						Net cash outflow in 2008 of US$120 million included US$116 million for United Tractors' acquisition in February of a 70% interest in a company which holds coal mining rights in Central Kalimantan. Net cash outflow in 2007 of US$18 million principally related to Jardine Motors Group's acquisition of a dealership in the United Kingdom.
						Increase in interests in other subsidiary undertakings included US$42 million for Dairy Farm's acquisition of an additional 25% interest in PT Hero Supermarket under a put option and US$14 million for Astra's increased interest in PT Astra Otoparts.
		(b)				Purchase of associates and joint ventures for the six months ended 30th June 2008 included Jardine Strategic's increased interest in Hongkong Land of US$90 million (2007: US$96 million).

		(c)			Purchase of other investments for the six months ended 30th June 2008 included US$45 million for Astra's purchase of securities, and US$22 million and US$6 million for Jardine Strategic's purchase of shares in Paris Orléans and subscription for Asia Commercial Bank convertible bonds respectively.
											Six months ended 30th June
											2008							2007
		(d)			Sale of subsidiary undertakings						US$m							US$m
					Intangible assets						1							1
					Tangible assets						4							1
					Associates and joint ventures						2							-
					Non-current debtors						2							-
					Deferred tax assets						4							-
					Current assets						99							4
					Current liabilities						(30)							-
					Net assets						82							6
					Adjustment for minority interests						(25)							-
					Net assets disposed of						57							6
					Cumulative exchange translation differences						-							1
					Profit on disposal						4							-
					Sale proceeds						61							7
					Adjustment for carrying value of associates and joint ventures						(37)							-
					Cash and cash equivalents of subsidiary undertakings disposed of						(62)							-
					Net cash (outflow)/inflow						(38)							7
					Sale proceeds in 2008 of US$61 million included US$51 million from Astra's sale of a 15% interest in PT Pantja Motor, reducing its effective interest from 65% to 50%.
		(e)			Sale of associates and joint ventures for the six months ended 30th June 2008 included US$21 million from Dairy Farm's sale of its 50% interest in Olive Young. Sale of associates and joint ventures for the six months ended 30th June 2007 included US$22 million from Jardine Pacific's sale of its 50% interest in Colliers Halifax and US$75 million from Mandarin Oriental's sale of its 25% interest in Mandarin Oriental, New York.
		(f)			Sale of other investments for the six months ended 30th June 2008 mainly comprised Astra's sale of securities. Sale of other investments for the six months ended 30th June 2007 included US$50 million and US$12 million from Jardine Strategic's sale of part of its holding in The Bank of N.T. Butterfield & Son and its interest in CNAC respectively.

13.

Capital Commitments and Contingent Liabilities

Total capital commitments at 30th June 2008 and 31st December 2007 amounted to US$368 million and US$263 million respectively.

Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.

14.

Related Party Transactions

In 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 purchase of motor vehicles and spare parts from the Group's associates and joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of motor vehicles and spare parts purchased from associates and joint ventures for the six months ended 30th June 2008 amounted to US$1,975 million (2007: US$1,336 million).

Other transactions with associates and joint ventures described in note 37 to the 2007 annual financial statements do not have a material effect on the financial position or performance of the Group.

15.

Post Balance Sheet Event

In July 2008, Jardine Cycle & Carriage announced that it had acquired a 20% interest in Truong Hai Auto Corporation, a Vietnamese automotive company, at a total cost of approximately US$77 million.

Jardine Matheson Holdings Limited

Principal Risks and Uncertainties

The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the Disclosure and Transparency Rules issued by the Financial Services Authority of the United Kingdom and are in addition to the matters referred to in the Chairman's Statement:

1.

Economic Risk, Market Risk and Competition

Most of the Group's businesses are exposed to the risk of negative developments in global and regional economies and financial markets. These developments can result in recession, inflation, currency fluctuations, or increases in financing costs, oil prices and in the cost of raw materials. Such developments might increase operating costs or reduce revenues.

A number of our businesses make significant investment decisions in respect of developments or projects that take time to come to fruition and achieve the desired returns and are, therefore, subject to market risks. These risks are further pronounced when operating in volatile markets.

The Group's businesses operate in areas that are highly competitive, and failure to compete effectively in terms of price, quality of product or levels of service can have an adverse effect on earnings. Significant pressure from such competition may lead to reduced margins.

The steps taken by the Group to manage its exposure to financial risk are set out in the Financial Review on page 24 and note 2 to the Financial Statements on page 40, and in the description of the systems of internal control set out in the Corporate Governance section on page 96 of the Company's 2007 Annual Report, which is available from the Company's website www.jardines.com.

2.

Concessions, Franchises and Key Contracts

A number of the Group's businesses and projects are reliant on concessions, franchises, management or other key contracts. Cancellation, expiry or termination, or the renegotiation of any such concession, franchise or key contract, could have an adverse effect on the financial condition and results of operations of certain subsidiaries, associates and joint ventures of the Group.

3.

Regulatory and Political Risk

The Group's businesses are subject to a number of regulatory environments in the territories in which they operate. Changes in the regulatory approach to such matters as foreign ownership of assets and businesses, exchange controls, planning controls, emission regulations, tax rules and employment legislation have the potential to impact the operations and profitability of the Group's businesses. Changes in the political environment in such territories can also affect the Group's businesses.

4.		Terrorism, Pandemic and Natural Disasters
		A number of the Group's operations are vulnerable to the effects of terrorism, either directly through the impact of an act of terrorism or indirectly through the impact of generally reduced economic activity in response to the threat of or an actual act of terrorism. All Group businesses would be impacted by a global or regional pandemic which could be expected to seriously affect economic activity and the ability of our businesses to operate smoothly. In addition, many of the territories in which we operate can experience from time to time natural disasters such as earthquakes and typhoons.
Jardine Matheson Holdings Limited  Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a)		the condensed financial statements have been prepared in accordance with IAS 34; and
(b)		the interim management report includes a fair review of all information required to be disclosed by the Disclosure and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Services Authority of the United Kingdom.
For and on behalf of the Board
A.J.L. Nightingale
James Riley
Directors
1st August 2008

The interim dividend of US¢24.00 per share will be payable on 15th October 2008 to shareholders on the register of members at the close of business on 22nd August 2008, and will be available in cash with a scrip alternative. The ex-dividend date will be on 20th August 2008, and the share registers will be closed from 25th to 29th August 2008, 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 for the 2008 interim dividend by notifying the United Kingdom transfer agent in writing by 26th September 2008. The sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 2nd October 2008. 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.

The Jardine Matheson Group

Founded as a trading company in China in 1832, Jardine Matheson is today a diversified business group focused principally on Asia. Its businesses comprise a combination of cash generating activities and long-term property assets.  

Jardine Matheson holds interests directly in Jardine Pacific (100%), Jardine Motors (100%) and Jardine Lloyd Thompson (31%), while its 81%-held Group holding company, Jardine Strategic, is interested in Hongkong Land (48%), Dairy Farm (78%), Mandarin Oriental (73%) and Jardine Cycle & Carriage (67%), which in turn has a 50% shareholding in Astra. Jardine Strategic also has a 53% shareholding in Jardine Matheson and a 21% stake in Rothschilds Continuation, the merchant banking house.

These companies are leaders in the fields of engineering and construction, transport services, insurance broking, property investment and development, retailing, restaurants, luxury hotels, motor vehicles and related activities, financial services, heavy equipment, mining and agribusiness.  

Incorporated in Bermuda, Jardine Matheson Holdings Limited has its primary share listing in London, with secondary listings in Bermuda and Singapore. Jardine Matheson Limited operates from Hong Kong and provides management services to Group companies

For further information, please contact:

Jardine Matheson Limited

James Riley

(852) 2843 8229

Matheson & Co., Limited

Philip Hawkins

[phone]

GolinHarris

Kennes Young

(852) 2501 7987

Weber Shandwick Financial

Richard Hews/ Hannah Marwood

[phone]

As permitted by the Disclosure and Transparency Rules of the Financial Services Authority of the United Kingdom, the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results announcement will remain available on the Company's website, www.jardines.com, together with other Group announcements.

- end -

 

END

 

 

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