Final Results
Jardine Matheson Hldgs Ld
07 March 2008
To: Business Editor
7th March 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
2007 Preliminary Announcement of Results
Highlights
• Underlying earnings per share + up 34%
• Full-year dividend up 30%
• Excellent year for most Group businesses
• Hongkong Land property portfolio value increases 25%
'The benign markets prevailing during the Firm's 175th year helped us achieve
record results in almost all our operations. The Group may well face a more
difficult economic environment in 2008, but our businesses have strong balance
sheets and are well placed to respond to whatever conditions the year brings. We
therefore face the future with considerable optimism.'
Henry Keswick, Chairman
7th March 2008
Results
--------------------------------------------------------------------------------
Year ended 31st December
2007 2006 Change
US$m US$m %
--------------------------------------------------------------------------------
Revenue together with revenue of
associates and joint ventures* 31,616 27,136 +17
Underlying profit attributable to
shareholders + 719 530 +36
Profit attributable to shareholders 1,828 1,348 +36
Shareholders' funds 8,490 6,594 +29
--------------------------------------------------------------------------------
US$ US$ %
--------------------------------------------------------------------------------
Underlying earnings per share + 2.03 1.51 +34
Earnings per share 5.16 3.83 +35
Dividends per share 0.65 0.50 +30
--------------------------------------------------------------------------------
Net asset value per share 24.09 18.65 +29
--------------------------------------------------------------------------------
* Includes 100% of revenue from associates and joint ventures.
+ 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. 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.
--------------------------------------------------------------------------------
The final dividend of USc45.00 per share will be payable on 14th May 2008,
subject to approval at the Annual General Meeting to be held on 8th May 2008,
to shareholders on the register of members at the close of business on 20th
March 2008 and will be available in cash with a scrip alternative. The ex-
dividend date will be on 18th March 2008, and the share registers will be
closed from 24th to 28th March 2008, inclusive.
Jardine Matheson Holdings Limited
Preliminary Announcement of Results
For The Year Ended 31st December 2007
Performance
The Group's markets remained robust throughout 2007 leading to some excellent
business performances. Jardine Matheson achieved a record underlying profit of
US$719 million, an increase of 36%. The turnover of the Group in 2007, including
100% of associates and joint ventures, was US$31.6 billion, compared with
US$27.1 billion in the prior year.
The Group continued to strengthen its financial position in 2007 while
maintaining active development programmes. Consolidated net debt excluding
financial services companies was reduced by 55% to US$618 million, and this,
together with further significant rises in property values, led to the Group's
gearing falling from 12% to 5%. The property revaluations, coupled with other
non-trading items, contributed to producing a profit attributable to
shareholders of US$1,828 million. Shareholders' funds were 29% higher at US$8.5
billion.
The proportion of the dividend payable at the half year was rebalanced to
represent approximately one third of the total payable for the year, which led
to a doubling of the interim dividend. The Board is now recommending a final
dividend of USc45.00 per share, which represents an overall increase of 30% for
the full year.
Business Activity
Business confidence in Asia remained healthy during the year notwithstanding the
increasing uncertainties in the United States and European financial markets. In
particular, mainland China's economy continued its strong rate of growth, while
in Southeast Asia the recovery in Indonesia gathered pace. Overall, the
contributions to the Group's underlying profit from Greater China and Southeast
Asia were well matched in 2007, providing the Group with a good geographic mix
as well as complementing its broad spread of market leading businesses.
The Company's two wholly-owned subsidiaries, Jardine Pacific and Jardine Motors,
had good results, while maintaining strong cash flows. Jardine Lloyd Thompson's
recovery continued, with profit growth in both sterling and dollar terms.
Dairy Farm sustained the expansion of its successful banners in Asia, adding 618
outlets in 2007 to reach a total of 4,191. Mandarin Oriental is beginning to
benefit from its enlarged portfolio of 21 hotels, with a further 18 properties
under development in city and leisure destinations, including Beijing and Paris.
The commercial property cycle in Hong Kong attained a new peak in 2007,
producing rental renewals in Hongkong Land's portfolio that will provide good
levels of income over the next three years. In addition, the recognition of
profits from residential projects will enhance earnings as these developments
achieve completion.
An excellent performance from Astra reflected impressive growth across nearly
all its major operations. Strong demand in the automotive sector in Indonesia,
due to low interest rates and increased consumer confidence, benefited Astra's
motor vehicle sales and financial services activities, while record prices have
also led to an improved performance from its oil palm plantations. The current
year has started encouragingly, and the recently announced expansion of the
group's coal mining interests also bodes well for future profitability.
In August 2007, Jardine Matheson made tender offers to repurchase its own shares
and to purchase shares in Jardine Strategic. The tenders were in line with the
Group's policy of allocating capital to acquire shares in Group companies when
favourable market conditions arise, thereby consolidating the Group's business
interests and enhancing earnings and net asset value per share. In total, some
US$130 million was invested through these tenders.
Outlook
In conclusion, the Chairman, Henry Keswick said, 'The benign markets prevailing
during the Firm's 175th year helped us achieve record results in almost all our
operations. The Group may well face a more difficult economic environment in
2008, but our businesses have strong balance sheets and are well placed to
respond to whatever conditions the year brings. We therefore face the future
with considerable optimism.'
Managing Director's Review
Jardine Matheson's underlying profit in 2007 was US$719 million, an increase of
36%. Underlying earnings per share rose 34% to US$2.03.
Of the Group's unlisted subsidiaries, Jardine Pacific produced an improved
contribution following good increases in earnings in a number of its businesses.
Jardine Motors just fell short of its 2006 profit, which had been enhanced by
greater one-off trading gains in the United Kingdom. Among the Group's listed
subsidiaries, Dairy Farm produced another fine result with all its major
operations performing well. At Mandarin Oriental, favourable markets, new hotels
and a full year's contribution from its major Hong Kong property after
renovation led to a significant increase in profit. Jardine Cycle & Carriage
benefited from a strong return to earnings growth by Astra. Of Jardine
Matheson's equity-accounted associates, Hongkong Land reported an impressive
increase in profit from both its commercial and its residential businesses.
Jardine Lloyd Thompson did well to achieve an improved performance in a
difficult trading environment, and its contribution to the Group rose further
on translation from sterling into US dollars. The Group's results also
benefited from lower financing charges.
The Company's share of a 25% upward revaluation of Hongkong Land's portfolio of
investment properties in 2007 amounted to US$944 million, compared with US$599
million in 2006, and a further US$71 million increase was recorded by Jardine
Pacific's portfolio. In accordance with International Financial Reporting
Standards, such revaluations are taken through the profit and loss account. The
profit attributable to shareholders of US$1,828 million incorporates these
revaluations together with other non-trading items, including gains on
disposals of shares in The Bank of N.T. Butterfield & Son and Edaran Otomobil
Nasional together with profits arising on the restructuring of Jardine Lloyd
Thompson's French associate. This figure compares with US$1,348 million in
2006.
During the year the Company increased its interest in Jardine Strategic to 81%
by a combination of a tender offer, market purchases and scrip dividends
involving the acquisition of some 20 million shares. The Company also
repurchased and cancelled some 515,000 of its own shares through a tender offer
and market purchases.
The Group's businesses have begun 2008 well and are continuing to pursue active
development programmes. There are, however, increasing cost pressures and the
risk of more challenging trading conditions if economic uncertainties in the
United States and Europe start to impact the markets in which the Group operates.
Jardine Pacific
Jardine Pacific produced an underlying profit from continuing businesses of
US$115 million in 2007, up 15%, with good performances from most of its
operations. The revaluation of the group's residential property investment
portfolio produced a non-trading gain of US$70 million which together with
gains on disposals led to a profit attributable to shareholders of US$213
million, an increase of 12%. Shareholders' funds were US$475 million at the end
of 2007, giving an underlying return of 28% on average shareholders' funds.
Financial information for Jardine Pacific's individual businesses is summarized
below:
Underlying profit Shareholders' funds
2007 2006 2007 2006
US$m US$m US$m US$m
------ ------ ------ ------
Gammon 16 14 64 49
HACTL 33 33 99 100
Jardine Aviation Services 8 9 18 22
JEC 12 12 35 26
JOS 14 11 30 19
Jardine Property Investment 3 3 260 187
Jardine Restaurants 17 14 12 8
Jardine Schindler 18 12 40 29
Jardine Shipping Services 5 4 16 15
Corporate and other interests (11) (12) (98) (101)
-------------------------------------------------------------------------
Continuing businesses 115 100 476 354
Discontinued businesses - 3 (1) 9
-------------------------------------------------------------------------
115 103 475 363
-----------------------------------------
HONG KONG AIR CARGO TERMINALS enjoyed record cargo volumes with a 3% growth in
cargo throughput, but its underlying profit contribution remained at US$33
million due to increased operating costs. Despite higher flight frequencies,
JARDINE AVIATION SERVICES was affected by lower fees which led to a reduced
contribution of US$8 million. Jardine Shipping Services benefited from better
freight rates and increased volume producing an improved underlying profit of
US$5 million.
GAMMON continued to perform well and its contribution rose to US$16 million on
completion of a number of major contracts, including the 3,000 room Venetian
Hotel in Macau. In January 2008, a Gammon joint venture was awarded the design-
and-build contract for the Tamar Development Project by the Hong Kong SAR
Government, which is expected to be completed in 2011. JARDINE SCHINDLER
performed strongly on new installations and produced further growth from its
existing maintenance portfolio, which led to an improved contribution of US$18
million. JEC recorded an underlying profit of US$12 million with good
performances in Thailand and the Philippines.
JARDINE RESTAURANTS achieved excellent earnings growth, up 20% at US$17 million,
although experienced significant cost increases towards the end of the year. JOS
produced a higher underlying profit of US$14 million following a 12% increase in
sales. RoomPlus, a self-storage business in Hong Kong, recorded a small
operating loss, although occupancy at its facility continued to improve. In
June 2007, Jardine Pacific sold its 50% interest in Colliers Halifax in Japan
to Hongkong Land.
Jardine Motors
Jardine Motors did well to achieve an underlying profit from continuing
businesses in 2007 of US$63 million, equaling that of 2006 which had benefited
from one-off gains. The profit attributable to shareholders was US$79 million,
and included a VAT recovery of US$10 million in the United Kingdom.
Zung Fu produced a good performance in Hong Kong with increased deliveries of
Mercedes-Benz cars and maintained its leading position in the luxury car market.
The contribution from its service centres was higher, but its commercial vehicle
business suffered from lower fleet sales and its Hyundai passenger car franchise
recorded a small loss. In Macau, its Mercedes-Benz operation had another good
year with strong new car deliveries.
Zung Fu's Mercedes-Benz dealerships in Southern China continued their profitable
growth with new car deliveries increasing significantly in 2007 to over 4,000
units. The aftersales business also achieved higher volumes. Further planned
expansion of this dealership network will bring the number of outlets to 17 in
2008.
In the United Kingdom, Jardine Motors' operations achieved good growth in new
and used car sales, helped in part by the acquisition of an Audi dealership
group. The underlying profit contribution, however, was lower than in 2006 due
to the absence of a one-off pension credit and lower property disposal gains.
Jardine Lloyd Thompson
Jardine Lloyd Thompson achieved an overall improvement in its underlying
performance in 2007 as the business repositioning and cost streamlining
undertaken over the past two years began to bring benefits. This progress was
set against challenging insurance markets and a weak US dollar.
Turnover rose by 3% to US$949 million with the benefit of modest organic growth
and acquisitions. The underlying trading margin improved to 13.1% from 12.8% in
2006. The underlying trading profit hich excludes exceptional items and
impairments rose 6% to US$125 million reflecting the higher turnover and
improved operational efficiencies. The group's profit attributable to
shareholders of US$145 million included a gain of US$58 million arising on the
merger of its French associate, SIACI, with Assurances et Conseils Saint-
Honore, partly offset by US$33 million in exceptional losses and impairments.
The Risk & Insurance group, which comprises worldwide retail operations and
specialist risk and insurance businesses largely based in London, did well to
record a modest increase in turnover and trading profit. The Employee Benefits
business in the United Kingdom achieved a modest increase in trading profit and
maintained its trading margin following an active year in 2006 that had been
driven by legal, regulatory and tax changes.
Hongkong Land
Hongkong Land's underlying profit rose 41% to US$345 million in 2007 as it
benefited from a strong market in Hong Kong and a higher contribution from
residential developments. The valuation of the group's commercial investment
properties, including the share of investment properties in joint ventures and
associates, rose to US$15.1 billion at the year end, an increase of 25%. The
profit attributable to shareholders, which incorporates the revaluation, was 49%
higher at US$2,840 million.
There was demand for prime commercial office space in Hong Kong's Central
district across all business sectors in 2007, and rents rose for the fourth
consecutive year. The luxury retail market also remained strong, underpinning the
contribution from Hongkong Land's premium retail space in Central. The group's
results include the first full-year contribution from One Raffles Quay in
Singapore, where the office market also performed well. Strong demand in the
city-state led to a number of pre-commitments for space in the Marina Bay
Financial Centre, the group's joint-venture development which is due to complete
in two phases in 2010 and 2011.
Residential development projects were completed in Beijing and Singapore in 2007
leading to the recognition of US$73 million in profit, an increase of 90% over
the prior year. There were also successful sales launches of a number of new
developments, including the first phase of Bamboo Grove in Chongqing and four
MCL Land projects in Singapore.
Dairy Farm
Dairy Farm achieved an excellent result in 2007 as favourable trading conditions
persisted in its major markets. Sales, including 100% of associated companies,
were 13% higher at US$6.8 billion, and the profit attributable to shareholders
for the year rose 22% to US$258 million. Following the payment of a special
dividend of US$215 million in October 2007, the group ended the year with net
debt of just US$83 million.
Dairy Farm continued to expand its retail formats within selected territories in
Asia, ending the year with 4,191 outlets. The group, however, decided to
withdraw from its small health and beauty ventures in Korea and Thailand that
had not met expectations.
The group's operations in both Hong Kong and Macau performed well in 2007. In
Southern China, an acquisition helped increase the number of 7-Eleven outlets to
440, while the repositioning of 30 Mannings health and beauty stores produced
promising results. In Taiwan, its supermarkets remained stable in a competitive
market, but the results from IKEA were below expectations despite two large
store openings in 2006. Hong Kong restaurant associate, Maxim's, made further
progress in sales and profit with the introduction of innovative products in
its fast food operations and good performances from its restaurants and cakes
activities.
A good result was achieved in Malaysia where the business is growing well, and
in Singapore improved performances led to a recovery in earnings. The results
from Indonesia remained unsatisfactory, although progress is being made and the
market's medium-term prospects continue to be attractive. The group's first
three supermarkets in Vietnam are now operational, while the expansion of its
supermarket and health and beauty joint venture operations in India continued
despite regulatory challenges.
Mandarin Oriental
Favourable conditions in most markets and a limited new supply of hotel rooms in
key city centre locations enabled Mandarin Oriental to achieve higher average
rates and record earnings in 2007. In particular, the group's two wholly-owned
Hong Kong hotels performed well. Earnings before interest, tax, depreciation and
amortization for 2007 were US$190 million, compared with US$116 million in 2006
when Mandarin Oriental, Hong Kong was closed for renovation for nine months. The
group's profit attributable to shareholders, which increased to US$108 million,
also benefited from a US$16 million gain on the sale of half of its 50% equity
interest in its New York hotel.
Mandarin Oriental's development programme gathered pace in 2007 with the
announcement of eight new projects, comprising hotels in Beijing, Guangzhou,
Taipei, Milan and Paris and three in resort destinations. Mandarin Oriental now
has 10,000 rooms in operation or under development in 39 hotels. Of its 18
hotels under development, all will be managed on behalf of third-party owners
with the exception of Paris, which is on a long-term lease. Ten of the projects
also incorporate a 'Residences at Mandarin Oriental' component, in addition to
the residences being built next to the group's existing hotel in London.
Jardine Cycle & Carriage
Jardine Cycle & Carriage performed well in 2007 as underlying profit rose 82% to
US$374 million and underlying earnings per share were up 79% at USc108. Profit
attributable to shareholders rose 52% to US$340 million. A low interest rate
environment, strong recovery in the motor car market in Indonesia and high palm
oil prices led to an excellent increase in the group's earnings.
Astra's contribution to Jardine Cycle & Carriage's underlying profit was 76%
higher at US$356 million. Its non-automotive activities performed particularly
well with their share of the profits exceeding that of the automotive
businesses. The contribution to underlying profit from Jardine Cycle &
Carriage's other motor activities increased by 34% to US$43 million as its
operations in Singapore and Indonesia enjoyed a good year, although Cycle &
Carriage Bintang in Malaysia continued to face a difficult market.
Jardine Cycle & Carriage took further steps to focus its investments with the
sale of its 40% interest in the Concorde Hotel in Malaysia to Hongkong Land, and
a reduction to 15% of its shareholding in a Singapore consumer finance company.
These disposals raised US$36 million and helped to strengthen its parent company
balance sheet, which at the end of the year showed net debt of just US$31
million.
Astra
Astra benefited from the strong growth in the Indonesian economy in 2007 and
reported a net profit for the year, under Indonesian accounting standards,
equivalent to US$711 million, an increase of 76%.
Earnings in Astra's automotive operations improved as the Indonesian wholesale
motor vehicle market grew by 36% in 2007. Astra's motor sales increased by 28%
to 223,000 units, leading to a slightly lower market share of 52% which is more
in line with past levels. The wholesale motorcycle market in Indonesia grew by
6% in the same period, but in the face of intense competition sales at Astra
Honda Motor were 9% lower at 2.1 million units representing a reduced market
share of 46%. New model launches and a repositioned strategy helped to underpin
the market position, while improvements in margins and a more stable retail
share enabled Astra to achieve overall earnings growth from the sector. The
contribution from Astra Otoparts was well ahead of 2006 as its automotive
component activities benefited from the market recovery.
The performance of Astra's consumer finance operations also reflected the growth
in vehicle sales. The volume financed was 11% higher at US$2.3 billion, although
the loan book ended the year 12% lower at US$1.7 billion as a greater proportion
was joint-funded without recourse. The earnings at 44.5%-held Bank Permata also
improved.
An excellent result was reported by Astra Agro Lestari, Astra's 80%-owned palm
oil producer. While production was relatively flat due to poor weather
conditions at the start of the year, a 69% increase achieved in crude palm oil
prices boosted revenues and profits. United Tractors, which is 58%-held,
benefited from strong demand for Komatsu equipment and recorded a 54%
improvement in sales. The company's contract coal mining interests overcame
adverse weather and operational interruptions to achieve a 28% increase in coal
extracted and a 4% increase in overburden removed. A coal mining concession in
South Kalimantan was acquired in January 2007, and an effective 70% stake in a
further mine in Central Kalimantan was purchased in February 2008.
Astra's information technology activities and infrastructure investments
performed satisfactorily in 2007, and the group is continuing to review further
infrastructure investments.
Further Interests
Rothschilds Continuation
The French and English branches of the Rothschild family took steps to unify
their shareholdings through the listed French company Paris Orleans. In the
reorganization, Rothschilds Continuation Holdings, in which Jardine Strategic
holds a 20% interest, increased its stake in the French bank, Rothchild et Cie
Banque.
Tata Industries
Tata Industries is an unlisted Indian investment company in which Jardine
Strategic holds a 20% shareholding. Following the sale of a strategic stake in
a cellular telephone operator in 2006, part of the proceeds was used to reduce
debt and pay a dividend. In 2007, Tata Industries made commitments to new
projects in a number of existing investee companies and identified further new
investment opportunities. Tata Industries continues to review a range of new
projects across a broad band of industry sectors.
Others
Edaran Otomobil Nasional, in which the Group held a 20% interest, continued to
struggle in 2007 as the Malaysian motor vehicle sector remained difficult for
the third consecutive year. It faced weak demand for Proton cars and, while
some progress was made in reducing overheads, the National Automotive Policy
introduced in 2006 made it hard to reposition the business. In August 2007,
Jardine Strategic accepted an offer for its entire shareholding made by another
major investor, DRB-HICOM, which gave rise to a gain of US$19 million on
completion of the sale in November 2007.
Asia Commercial Bank in Vietnam continued to trade well in 2007 with excellent
balance sheet and profit growth as the local economy strengthened. Jardine
Strategic maintained its 7% shareholding through the conversion of convertible
bonds and its full participation in a rights issue as the bank raised additional
funds to grow its business.
Advantage was taken of the strong share price of The Bank of N.T. Butterfield &
Son in Bermuda to sell part of the Group's interest. Some 3% was sold by Jardine
Strategic during the year, producing a gain of US$46 million, and leaving a
remaining shareholding of 3.8%.
Anthony Nightingale
Managing Director
7th March 2008
----------------------------------------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2007
----------------------------------------------------------------------------------------------------------------
2007 2006
--------------------------------------- ---------------------------------------
Underlying Non- Underlying Non-
business trading business trading
performance items Total performance items Total
US$m US$m US$m US$m US$m US$m
--------------------------------------- ---------------------------------------
--------- ---------
Revenue (note 2) 19,445 - 19,445 16,281 - 16,281
Net operating costs (note 3) (17,916) 252 (17,664) (15,290) 324 (14,966)
--------- --------- --------- --------- --------- ---------
Operating profit (note 4) 1,529 252 1,781 991 324 1,315
--------- --------- --------- --------- --------- ---------
Financing charges (219) - (219) (234) - (234)
Financing income 121 - 121 104 - 104
--------- --------- --------- --------- --------- ---------
Net financing charges (98) - (98) (130) - (130)
Share of results of associates
and joint ventures (note 5) 542 1,114 1,656 439 748 1,187
--------- --------- --------- --------- --------- ---------
Profit before tax 1,973 1,366 3,339 1,300 1,072 2,372
Tax (note 6) (415) (40) (455) (254) (64) (318)
--------- --------- --------- --------- --------- ---------
Profit after tax 1,558 1,326 2,884 1,046 1,008 2,054
------------------------------------- -------------------------------------
Attributable to:
Shareholders of the Company 719 1,109 1,828 530 818 1,348
Minority interests 839 217 1,056 516 190 706
--------- --------- --------- --------- --------- ---------
1,558 1,326 2,884 1,046 1,008 2,054
------------------------------------- -------------------------------------
US$ US$ US$ US$
--------- --------- --------- ---------
Earnings per share (note 7)
- basic 2.03 5.16 1.51 3.83
- diluted 2.02 5.03 1.50 3.75
--------- --------- --------- ---------
--------- ---------
--------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Balance Sheet
at 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
-------- ---------
Assets
Intangible assets 1,883 1,825
Tangible assets 3,149 2,931
Investment properties 355 271
Plantations 515 460
Associates and joint ventures 7,964 6,476
Other investments 728 592
Non-current debtors 1,002 1,150
Deferred tax assets 114 119
Pension assets 215 174
-------- ---------
Non-current assets 15,925 13,998
-------- ---------
Stocks and work in progress 1,610 1,478
Current debtors 2,322 2,170
Current investments 21 2
Current tax assets 154 142
Bank balances and other liquid funds
-------- ---------
- non-financial services companies 1,966 2,355
- financial services companies 167 173
-------- ---------
2,133 2,528
-------- ---------
6,240 6,320
Non-current assets classified as held for sale (note 9) 48 60
-------- ---------
Current assets 6,288 6,380
-------- ---------
-------- ---------
Total assets 22,213 20,378
-------- ---------
2007 2006
US$m US$m
-------- ---------
Equity
Share capital 155 154
Share premium and capital reserves 25 29
Revenue and other reserves 9,266 7,303
Own shares held (956) (892)
-------- ---------
Shareholders' funds (note 10) 8,490 6,594
Minority interests 5,208 4,509
-------- ---------
Total equity 13,698 11,103
-------- ---------
Liabilities
Long-term borrowings
-------- ---------
- non-financial services companies 2,037 2,159
- financial services companies 616 723
-------- ---------
2,653 2,882
Deferred tax liabilities 599 557
Pension liabilities 126 151
Non-current creditors 67 103
Non-current provisions 42 34
-------- ---------
Non-current liabilities 3,487 3,727
-------- ---------
Current creditors 3,375 2,850
Current borrowings
-------- ---------
- non-financial services companies 547 1,573
- financial services companies 806 954
-------- ---------
1,353 2,527
Current tax liabilities 230 101
Current provisions 68 70
-------- ---------
5,026 5,548
Liabilities directly associated with non-current
assets classified as held for sale (note 9) 2 -
-------- ---------
Current liabilities 5,028 5,548
-------- ---------
Total liabilities 8,515 9,275
-------- ---------
-------- ---------
Total equity and liabilities 22,213 20,378
-------- ---------
--------------------
--------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Statement of Recognized Income and Expense
for the year ended 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------
Surpluses on revaluation of properties 114 120
Gains on revaluation of other investments 176 294
Actuarial gains on defined benefit pension plans 86 40
Net exchange translation differences (87) 393
Losses on cash flow hedges (8) (13)
Tax on items taken directly to equity (26) (71)
-------- ---------
Net income recognized directly in equity 255 763
Transfer to profit and loss on disposal of
other investments (59) (79)
Transfer to profit and loss on realization of
exchange reserves (7) (3)
Transfer to profit and loss in respect of cash
flow hedges 2 4
Profit after tax 2,884 2,054
-------- ---------
Total recognized income and expense for the year 3,075 2,739
-------- ---------
Attributable to:
Shareholders of the Company 2,063 1,681
Minority interests 1,012 1,058
-------- ---------
3,075 2,739
-------- ---------
--------------------
--------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------
Operating activities
-------- --------
Operating profit 1,781 1,315
Depreciation and amortization 479 403
Other non-cash items (51) (140)
Decrease in working capital 77 472
Interest received 116 97
Interest and other financing charges paid (214) (212)
Tax paid (295) (370)
-------- --------
1,893 1,565
Dividends from associates and joint ventures 305 377
-------- --------
Cash flows from operating activities 2,198 1,942
Investing activities
-------- --------
Purchase of subsidiary undertakings (note 12(a)) (184) (55)
Purchase of associates and joint ventures
(note 12(b)) (113) (465)
Purchase of other investments (note 12(c)) (74) (94)
Purchase of land use rights (36) (17)
Purchase of other intangible assets (27) (6)
Purchase of tangible assets (615) (642)
Purchase of investment properties (6) (2)
Purchase of plantations (41) (22)
Advance of mezzanine loans (3) -
Repayment of mezzanine loans 12 -
Capital distribution from associates 14 1
Sale of subsidiary undertakings (note 12(d)) 6 231
Sale of associates and joint ventures (note 12(e)) 127 100
Sale of other investments (note 12(f)) 127 480
Sale of land use rights 14 26
Sale of tangible assets 56 75
Sale of investment properties 7 -
-------- --------
Cash flows from investing activities (736) (390)
Financing activities
-------- --------
Issue of shares 1 3
Repurchase of shares (13) -
Capital contribution from minority shareholders 5 13
Drawdown of borrowings 8,075 7,599
Repayment of borrowings (9,512) (8,071)
Dividends paid by the Company (126) (91)
Dividends paid to minority shareholders (290) (243)
-------- --------
Cash flows from financing activities (1,860) (790)
Effect of exchange rate changes (11) 45
-------- --------
Net (decrease)/increase in cash and cash equivalents (409) 807
Cash and cash equivalents at 1st January 2,491 1,684
-------- --------
Cash and cash equivalents at 31st December 2,082 2,491
-------- --------
--------------------
--------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Analysis of Profit Contribution
for the year ended 31st December 2007
--------------------------------------------------------------------------------
2007 2006
US$m US$m
--------------------
Group contribution
Jardine Pacific 115 103
Jardine Motors Group 63 67
Jardine Lloyd Thompson 33 28
Hongkong Land 131 85
Dairy Farm 161 131
Mandarin Oriental 47 27
Jardine Cycle & Carriage 22 16
Astra 178 98
Corporate and other interests (31) (25)
-------- --------
Underlying profit 719 530
Increase in fair value of investment properties 1,015 671
Other non-trading items 94 147
-------- --------
Profit attributable to shareholders 1,828 1,348
-------- --------
Analysis of Jardine Pacific's contribution
Gammon 16 14
HACTL 33 33
Jardine Aviation Services 8 9
JEC 12 12
JOS 14 11
Jardine Property Investment 3 3
Jardine Restaurants 17 14
Jardine Schindler 18 12
Jardine Shipping Services 5 4
Corporate and other interests (11) (12)
-------- --------
Continuing businesses 115 100
Discontinued businesses - 3
-------- --------
115 103
-------- --------
Analysis of Jardine Motors Group's contribution
Hong Kong and Mainland China 41 36
United Kingdom 23 29
Corporate (1) (2)
-------- --------
Continuing businesses 63 63
Discontinued businesses - 4
-------- --------
63 67
-------- --------
--------------------
--------------------------------------------------------------------------------
Jardine Matheson Holdings Limited
Notes
--------------------------------------------------------------------------------
1. Accounting Policies and Basis of Preparation
The financial information contained in this announcement has been based on the
audited results for the year ended 31st December 2007 which have been prepared
in conformity with International Financial Reporting Standards, including
International Accounting Standards and Interpretations adopted by the
International Accounting Standards Board.
In 2007, the Group adopted the following standards and interpretations to
existing standards which are relevant to its operations:
--------------------------------------------------------------------------------
IFRS 7 Financial Instruments: Disclosures
Amendment to IAS 1 Capital Disclosures
IFRIC 8 Scope of IFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
--------------------------------------------------------------------------------
There have been no changes to the accounting policies as a result of adoption of
the above standards and interpretations.
The Group's reportable segments are set out in note 2.
Certain comparative figures have been reclassified to conform with the current
year presentation.
2. Revenue
2007 2006
US$m US$m
--------------------------
By business:
Jardine Pacific 1,204 1,082
Jardine Motors Group 2,911 2,352
Dairy Farm 5,887 5,175
Mandarin Oriental 529 405
Jardine Cycle & Carriage 1,239 1,119
Astra 7,673 6,143
Other activities 2 5
------- -------
19,445 16,281
------- -------
3. Net Operating Costs
2007 2006
US$m US$m
--------------------------
Cost of sales (14,845) (12,507)
Other operating income 432 543
Selling and distribution costs (2,227) (2,099)
Administration expenses (981) (854)
Other operating expenses (43) (49)
------- -------
(17,664) (14,966)
------- -------
4. Operating Profit
2007 2006
US$m US$m
--------------------------
By business:
Jardine Pacific 163 142
Jardine Motors Group 124 133
Dairy Farm 276 233
Mandarin Oriental 133 122
Jardine Cycle & Carriage 38 55
Astra 1,034 570
------- -------
1,768 1,255
Corporate and other interests 28 60
Intersegment transactions (15) -
------- -------
1,781 1,315
------- -------
Operating profit included the following gains/
(losses)from non-trading items:
Increase in fair value of investment properties 88 91
Increase in fair value of plantations 35 22
Sale and closure of businesses 28 127
Sale of investments 70 80
Sale of property interests - 10
Restructuring of businesses (7) (5)
Realization of exchange gains* 15 -
Discount on acquisition of businesses 5 -
Value added tax recovery in Jardine Motors Group 14 -
Other 4 (1)
------- -------
252 324
------- -------
* Arising on repatriation of capital from foreign subsidiary undertakings.
5. Share of Results of Associates and Joint Ventures
2007 2006
US$m US$m
--------------------------
By business:
Jardine Pacific 86 80
Jardine Motors Group - 3
Jardine Lloyd Thompson 45 27
Hongkong Land 1,342 856
Dairy Farm 30 28
Mandarin Oriental 23 13
Jardine Cycle & Carriage 9 3
Astra 116 151
Corporate and other interests 5 26
------- -------
1,656 1,187
------- -------
Share of results of associates and joint ventures included
the following gains/(losses) from non-trading items:
Increase in fair value of investment properties 1,174 752
Asset impairment (72) -
Sale and closure of businesses (9) (13)
Sale of investments 1 4
Sale of property interests 6 -
Pension curtailment - 13
Restructuring of businesses 14 (5)
Other - (3)
------- -------
1,114 748
------- -------
Results are shown after tax and minority interests in the associates and joint
ventures.
6. Tax
2007 2006
US$m US$m
--------------------------
Current tax (417) (303)
Deferred tax (38) (15)
------- -------
(455) (318)
------- -------
Greater China (70) (59)
Southeast Asia (345) (206)
United Kingdom (21) (15)
Rest of the world (19) (38)
------- -------
(455) (318)
------- -------
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$339 million (2006: US$280
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$1,828 million (2006: US$1,348 million) and on the weighted average number
of 354 million (2006: 352 million) shares in issue during the year.
Diluted earnings per share are calculated on profit attributable to shareholders
of US$1,787 million (2006: US$1,324 million), which is after adjusting for the
effects of the conversion of dilutive potential ordinary shares of subsidiary
undertakings, associates or joint ventures, and on the weighted average number
of 355 million (2006: 353 million) shares in issue during the year.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2007 2006
----------------------
Weighted average number of shares in issue 619 611
Shares held by the Trustee under the Senior
Executive Share Incentive Schemes (2) (2)
Company's share of shares held by
subsidiary undertakings (263) (257)
------- -------
Weighted average number of shares for basic
earnings per share calculation 354 352
Adjustment for shares deemed to be issued for
no consideration under the Senior Executive
Share Incentive Schemes 1 1
------- -------
Weighted average number of shares for diluted
earnings per share calculation 355 353
------- -------
Additional basic and diluted earnings per share are also calculated based on
underlying profit attributable to shareholders. A reconciliation of earnings is
set out below:
2007 2006
Basic Diluted Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
--------------------------------------------------------------------------
Profit attributable to shareholders 1,828 5.16 5.03 1,348 3.83 3.75
Non-trading items (note 8) (1,109) (818)
------- ------
Underlying profit attributable
to shareholders 719 2.03 2.02 530 1.51 1.50
------- ------
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:
2007 2006
US$m US$m
--------------------
Increase in fair value of investment properties
------- -------
- Hongkong Land 944 599
- other 71 72
------- -------
1,015 671
Increase in fair value of plantations 5 3
Asset impairment
------- -------
- Mandarin Oriental, Kuala Lumpur 3 -
- motorcycle franchise rights (19) -
- other (2) -
------- -------
(18) -
Sale and closure of businesses
------- -------
- Appleyard Vehicle Contracts - 38
- 25% interest in Mandarin Oriental, New York 10 -
- The Mark - 21
- motor operations - 2
- insurance broking - (8)
- other 2 6
------- -------
12 59
Sale of investments 55 83
Sale of property interests 5 2
Pension curtailment - 13
Restructuring of businesses
------- -------
- SIACI in Jardine Lloyd Thompson 18 -
- other (6) (10)
------- -------
12 (10)
Realization of exchange gains* 11 -
Discount on acquisition of businesses 1 -
Value added tax recovery in Jardine Motors Group 10 -
Other 1 (3)
------- -------
1,109 818
------- -------
* 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:
2007 2006
US$m US$m
-------------------
Tangible assets 39 4
Investment properties 2 2
Associates and joint ventures 7 14
Non-current debtors - 31
Current assets - 9
------- -------
Total assets 48 60
------- -------
Deferred tax liabilities 2 -
------- -------
Total liabilities 2 -
------- -------
At 31st December 2007, the non-current assets classified as held for sale
include Dairy Farm's interest in a retail property in Malaysia with a
carrying value of US$33 million and its 50% interest in a joint venture in
Korea with a carrying value of US$7 million. The sale of the property is
expected to be completed in 2008 at an amount not materially different from
the carrying value. The sale of the joint venture interest was completed in
February 2008 and resulted in a profit before tax of approximately US$14 million.
At 31st December 2006, the non-current assets classified as held for sale
principally related to Mandarin Oriental's 25% interest in Mandarin Oriental,
New York of US$14 million and its mezzanine loan to the hotel of US$40 million.
The sale was completed in March 2007 resulting in a profit before tax of US$25
million, which was included in other operating income.
10. Shareholders' Funds
2007 2006
US$m US$m
-------------------
At 1st January 6,594 4,998
Recognized income and expense attributable
to shareholders 2,063 1,681
Dividends (note 11) (212) (160)
Employee share option schemes
- value of employee services 9 8
- exercise of share options 1 3
Scrip issued in lieu of dividends 112 175
Repurchase of shares (13) -
Increase in own shares held (64) (111)
------- -------
At 31st December 8,490 6,594
------- -------
11. Dividends
2007 2006
US$m US$m
-------------------
Final dividend in respect of 2006 of USc40.00 246 216
(2005: USc35.65) per share
Interim dividend in respect of 2007 of USc20.00 123 61
(2006: USc10.00) per share
------- -------
369 277
Company's share of dividends paid on the shares held
by subsidiary undertakings (157) (117)
------- -------
212 160
------- -------
A final dividend in respect of 2007 of USc45.00 (2006: USc40.00) per share
amounting to a total of US$279 million (2006: US$246 million) is proposed by
the Board. The dividend proposed will not be accounted for until it has been
approved at the Annual General Meeting. The net amount after deducting the
Company's share of the dividends payable on the shares held by subsidiary
undertakings of US$120 million (2006: US$104 million) will be accounted for as
an appropriation of revenue reserves in the year ending 31st December 2008.
12. Notes to Consolidated Cash Flow Statement
2007 2006
(a) Purchase of subsidiary undertakings US$m US$m
-------------------
Intangible assets 2 6
Tangible assets 3 15
Non-current debtors 1 -
Current assets 31 18
Deferred tax liabilities - (1)
Pension liabilities (1) (1)
Other non-current liabilities (1) -
Current liabilities (21) (9)
Minority interests 1 -
------- -------
Net assets acquired 15 28
Goodwill 13 12
------- -------
Total consideration 28 40
Adjustment for deferred consideration and carrying
value of associates and joint ventures (4) (7)
Cash and cash equivalents of subsidiary
undertakings acquired (2) -
------- -------
Net cash outflow 22 33
Purchase of shares in Jardine Strategic 138 -
Purchase of shares in Jardine Cycle & Carriage 24 22
------- -------
184 55
------- -------
Net cash outflow in 2007 of US$22 million included US$19 million for Jardine
Motors Group's acquisition of dealerships in the United Kingdom. Net cash
outflow in 2006 of US$33 million included US$6 million for Jardine Motors
Group's acquisition of dealerships in the United Kingdom, and US$17 million for
Dairy Farm's store acquisitions in Malaysia and Vietnam.
(b) Purchase of associates and joint ventures in 2007 included Jardine
Strategic's increased interest in Hongkong Land of US$104 million. Purchase of
associates and joint ventures in 2006 included US$26 million, US$26 million,
US$19 million and US$98 million for Astra's interest in Toyota Astra Financial
Services, PT PAM Lyonnaise Jaya, Astra Daihatsu Motor and an additional 12.95%
interest in Bank Permata respectively, and Jardine Strategic's increased
interest in Hongkong Land of US$289 million.
(c) Purchase of other investments included US$61 million (2006:US$80 million)
for Astra's purchase of securities.
2007 2006
(d) Sale of subsidiary undertakings US$m US$m
-------------------
Intangible assets 1 12
Tangible assets 1 94
Investment properties - 24
Associates and joint ventures - 35
Non-current debtors - 1
Deferred tax assets - 1
Current assets 4 626
Long-term borrowings - (100)
Deferred tax liabilities - (2)
Current liabilities (1) (207)
------- -------
Net assets 5 484
Adjustment for minority interests - (262)
------- -------
Net assets disposed of 5 222
Cumulative exchange translation differences - (8)
Profit on disposal 1 88
------- -------
Sale proceeds 6 302
Adjustment for deferred consideration - 1
Adjustment for carrying value of associates and
joint ventures - (14)
Cash and cash equivalents of subsidiary
undertakings disposed of - (58)
------- -------
Net cash inflow 6 231
------- -------
Sale proceeds in 2006 of US$302 million included US$99 million from Mandarin
Oriental's sale of its interest in The Mark, New York, US$28 million from
Astra's partial sale of its interest in Aisin and US$163 million from Jardine
Strategic's sale of its interest in MCL Land.
(e) Sale of associates and joint ventures in 2007 included US$22 million from
Jardine Pacific's sale of its 50% interest in Colliers Halifax, US$71 million
from Mandarin Oriental's sale of its 25% interest in Mandarin Oriental, New York,
and US$12 million and US$15 million from Jardine Cycle & Carriage's sale of its
interests in Ampang Investments and UMF respectively. Sale of associates and
joint ventures in 2006 included US$72 million from Jardine Motors Group's sale
of its interest in Appleyard Vehicle Contracts.
(f) Sale of other investments in 2007 included US$54 million from Jardine
Strategic's partial disposal of its interest in The Bank of N.T. Butterfield &
Son, US$11 million from disposal of shares in CNAC and US$46 million from a
capital distribution from Edaran Otomobil Nasional followed by sale of that
investment. Sale of other investments in 2006 included US$31 million from
Jardine Pacific's sale of its interest in BALtrans, US$27 million from Astra's
sale of securities and US$407 million from sale of the Group's interest in
JPMorgan Chase.
13. Capital Commitments and Contingent Liabilities
2007 2006
US$m US$m
------------------
Capital commitments 263 202
----- -----
Various Group companies are involved in litigation arising in the ordinary
course of their respective businesses. Having reviewed outstanding claims and
taking into account legal advice received, the Directors are of the opinion
that adequate provisions have been made in the financial statements.
14. Post Balance Sheet Events
In February 2008, Dairy Farm disposed of its 50% interest in a joint venture in
Korea which resulted in a profit before tax of approximately US$14 million.
In February 2008, United Tractors, a 58%-held subsidiary undertaking of Astra,
acquired a 70% interest in a company which holds coal mining rights in Central
Kalimantan, Indonesia for US$116 million.
----------------------------------------------------------------------------------
The final dividend of USc45.00 per share will be payable on 14th May 2008,
subject to approval at the Annual General Meeting to be held on 8th May 2008,
to shareholders on the register of members at the close of business on 20th
March 2008, and will be available in cash with a scrip alternative. The ex-
dividend date will be on 18th March 2008, and the share registers will be closed
from 24th to 28th March 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 2007 final dividend by
notifying the United Kingdom transfer agent in writing by 25th April 2008. The
sterling equivalent of dividends declared in United States Dollars will be
calculated by reference to a rate prevailing on 30th April 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.
-----------------------------------------------------------------------------------
- end -
For further information, please contact:
Jardine Matheson Limited
James Riley (852) 2843 8229
Matheson & Co., Limited
Philip Hawkins (020) 7816 8136
GolinHarris
Kennes Young (852) 2501 7987
Weber Shandwick Financial
Richard Hews/ Hannah Marwood (020) 7067 0700
Full text of the Preliminary Announcement of Results and the Preliminary
Financial Statements for the year ended 31st December 2007 can be accessed
through the Internet at 'www.jardines.com'.
This information is provided by RNS
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