TIDMJDS TIDMJAR
RNS Number : 1139F
Jardine Strategic Hldgs Ltd
05 March 2020
To: Business Editor 5th March 2020
For immediate release
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
Jardine Strategic Holdings Limited
2019 Preliminary Announcement of Results
Highlights
-- Resilient performance in challenging market conditions
-- Underlying net profit and earnings per share down 3% and 2%,
respectively, against prior year
-- Full-year dividend up 4%
-- Record year for Hongkong Land and solid performances from Jardine Pacific and Astra
-- Dairy Farm transformation progressing well but profit impacted by Hong Kong
-- Group's balance sheet and funding position remain robust
"2019 was a challenging year, but the Group has a long track
record of resilience and delivered an encouraging performance in
difficult conditions.
The 2020 performance of the Group's businesses in Greater China
is being materially impacted by the ongoing COVID-19 outbreak and
results for the remainder of the year will depend on the duration,
geographic extent and impact of the outbreak and the measures taken
to control it. Longer term, however, we remain confident in the
market fundamentals that drive Asia's growth. The Board also
remains confident that the Group's strong balance sheet, liquidity
and clear strategic priorities will position Jardine Strategic well
for strong long-term growth."
Ben Keswick, Executive Chairman and Managing Director
Results
Year ended 31st December
2019 2018 Change
US$m US$m %
Restated
--------------------------------------------- -------- ----------- -------
Gross revenue including 100% of
Jardine Matheson, associates and
joint ventures 103,308 92,348 +12
Revenue 32,665 34,094 -4
Underlying profit* before tax 4,500 4,633 -3
Underlying profit* attributable
to shareholders 1,681 1,729 -3
Profit attributable to shareholders 2,178 1,827 +19
US$ US$ %
-------- -----------
Underlying earnings per share* 2.98 3.04 -2
Earnings per share 3.86 3.21 +20
Dividends per share 0.355 0.340 +4
Net asset value per share (#) 57.98 68.46 -15
* The Group uses 'underlying profit' in its internal financial
reporting to distinguish between ongoing business performance
and non-trading items, as more fully described in note 42
to the financial statements. Management considers this to
be a key measure which provides additional information to
enhance understanding of the Group's underlying business performance.
The accounts have been restated due to changes in accounting
policies upon adoption of IFRS 16 'Leases', as set out in
note 1 to the financial statements.
(#) Net asset value per share is calculated on a market value
basis, details of which are set out in note 15.
The final dividend of US 25.0 per share will be payable on 13th
May 2020, subject to approval at the Annual General Meeting to be
held on 7th May 2020, to shareholders on the register of members at
the close of business on 20th March 2020 and will be available in
cash with a scrip alternative.
Jardine Strategic Holdings Limited
2019 Preliminary Announcement of Results
Chairman's Statement
Overview
Jardine Strategic delivered a resilient performance in 2019. The
Group navigated a range of challenges during the year, including
the China-US trade war, negative consumer sentiment in a number of
markets, lower commodity prices and the social unrest in Hong Kong.
Social unrest in Hong Kong has had a significant impact on the
local economy and caused extensive disruption, which has been
exacerbated by COVID-19 which is creating significant challenges
across Greater China. We are very grateful for the continuing
dedication, hard work and resilience of our people in the context
of these substantial challenges and remain confident in the
positive long-term outlook for the region and in Hong Kong's future
as a financial and commercial centre.
The financial and operational resilience of the Group's
businesses continues to be supported by its investment strategy and
approach to capital allocation, which are focused on fast-growing
consumer markets in Greater China and Southeast Asia. The Group
continues to monitor the COVID-19 outbreak closely. Our priority is
always the wellbeing of our people and customers and we will do all
we can to ensure their safety and support them through this
difficult time. While the outlook is likely to continue to be
challenging and performance in the year ahead will depend on the
duration, geographic extent and impact of the COVID-19 outbreak and
the measures taken to control it , the Group remains confident in
the resilience of its businesses and is therefore confident in
their longer-term prospects.
Underlying net profit for the year was down by 3% compared with
the prior year, with a record year for Hongkong Land and solid
performances from Jardine Pacific and Astra.
Dairy Farm's ongoing multi-year transformation programme is
beginning to deliver encouraging operational results, but difficult
market conditions in Hong Kong impacted the reported financial
performance of the business in the year.
Net non-trading items included the US$874 million net gain from
the disposal of the Group's interest in Jardine Lloyd Thompson
('JLT') and the US$61 million net revaluation gain on other
investments. These were partially offset by the US$447 million net
revaluation loss arising from the annual revaluation of the Group's
investment properties.
Performance
The Group's consolidated revenue for 2019 was US$32.7 billion, a
decrease of 4% from the prior year. The Group's gross revenue
benefited from the inclusion of sales from the newly-acquired
interest in Robinsons Retail, as well as a full twelve months'
revenue for Zhongsheng and Yonghui due to the timing of the
reporting of their results.
Underlying profit before tax for the year was down 3% at
US$4,500 million.
The underlying profit attributable to shareholders decreased by
3% to US$1,681 million, with underlying earnings per share down by
2% to US$2.98.
Net profit including non-trading items was US$2,178 million.
The Group's financial position remains strong, with
shareholders' funds up 14% at US$35.8 billion at the year end.
Consolidated net debt excluding financial services companies was
US$6.0 billion at 31st December 2019, representing gearing of 9%,
down slightly from 10% at the end of 2018.
The Board is recommending an increased final dividend of US 25.0
per share, which produces a full-year dividend of US 35.5 per
share, up 4% from the prior year.
Within Jardine Matheson's directly-held businesses, Jardine
Pacific delivered a satisfactory performance, with overall profit
growth of 2% to US$164 million and strong performances by JEC and
Gammon , offset by weaker performances by Jardine Restaurants and
HACTL.
There was a solid performance from Hongkong Land, which achieved
a further year of record underlying profit, reflecting steady
earnings in investment properties, despite the social unrest in
Hong Kong, and a stable performance from development properties,
with a higher contribution from the Chinese mainland, offset by
lower profits in other markets.
Astra delivered a resilient performance in 2019 in the face of
relatively weak domestic consumption and low commodity prices, with
strong contributions from its f inancial services and
newly-acquired gold mining businesses, offset by weaker
performances from heavy equipment, coal mining and
agribusiness.
At Dairy Farm, the multi-year transformation programme to
reshape and reorganise the business showed encouraging signs of
progress in evolving its operations. Underlying profit was,
however, lower than the prior year due to the impact of the social
unrest in Hong Kong - with Mannings and Maxim's most affected - as
well as increased cost of goods and ongoing investments in its Home
Furnishings business.
Strategic Developments
The Group has a strong presence in two of the fastest growing
consumer markets in the world: Greater China and Southeast Asia.
Greater China provides the larger contribution to the Group,
underpinned by the Group's significant presence in Hong Kong. The
Chinese mainland is also a key market for the Group , contributing
20% of profits in the year, and the Group is focused on growing its
businesses there further.
Hongkong Land diversified its investment properties portfolio
with the strategic acquisition in February 2020 of a large
predominantly commercial mixed-use site in a prime waterside
location in Shanghai.
It also continues to consolidate its presence in the Chinese
mainland in cities where it already has a presence, with a total of
five new residential development sites secured in 2019 .
The Group's affiliates in the Chinese mainland, Zhongsheng and
Yonghui, both had a good year in their underlying businesses.
Southeast Asia is the other area of key focus for the Group.
During the year Astra increased its stake in Gojek, Indonesia's
leading multi-platform technology group and it also formed a fleet
management joint venture with Gojek to support their GoCar
ride-hailing service. Astra also increased its toll road interests,
with the acquisition of a 44.5% stake in the operator of the
Surabaya-Mojokerto toll road and a further 10% stake in the
operator of the Cikopo-Palimanan toll road.
Jardine Cycle & Carriage increased its stake in Thaco in the
year. Thaco continues to diversify its business into property and
agriculture, and these are expected to grow in importance going
forward.
Significant long-term consumption growth is forecast in the
Group's core markets of the Chinese mainland and Southeast Asia,
particularly from the growing and increasingly affluent middle
class. The Group's businesses are associated with some of the
world's top brands and are well placed to take advantage of
compelling long-term market dynamics.
An important part of the Group's strategy is to invest for
growth and to build significant stakes in strong companies which
are benefiting from the opportunities offered by the economic
development of the r egion. The Group's aim is to be the partner of
choice for associates or joint ventures and to grow those
businesses over time by developing strong relationships which add
value through the Group's role as a supportive shareholder to
entrepreneurs and leading management teams.
At Dairy Farm, the multi-year transformation programme to
reshape and reorganise the business showed encouraging signs of
progress in the year, with its space optimisation plan, new store
formats and improvement programmes generating greater efficiencies
and starting to deliver tangible results. The business is
well-placed to grow and meet the changing demands of customers and
to address the increasing disruption faced by the retail
sector.
Mandarin Oriental opened four new hotels in the year and it is
positive to see a further increase in the group's pipeline of
future hotels, with seven new management contracts signed and
announced in the year, bringing the total number of announced
projects under development which are expected to open in the next
five years to 20. The Excelsior in Hong Kong closed in March 2019
for redevelopment as a mixed-use office and retail project, and the
demolition phase started in September 2019. The project is expected
to complete in 2025.
Looking forward, the Group anticipates that a number of its
businesses will face increasing changes, both in technology and
consumer behaviours, set against an increasingly complex operating
environment. In order to ensure that all its businesses are well
placed to benefit from these changes and deliver future growth, the
Group has made it a priority to invest in and promote innovation,
the development of talent and the adoption of sustainable business
practices.
The financial and operational strength of the Group's businesses
continues to be supported by its investment strategy and approach
to capital allocation. The Board keeps its portfolio of businesses
under review and regularly assesses whether action is necessary to
ensure that the Group's activities remain aligned with its
strategic priorities. In the past year such action has included the
disposal of the Jardine Matheson's interests in JLT and JOS, the
conditional agreement by Astra to dispose of its interest in
Permata Bank and the closure of The Excelsior for redevelopment as
a commercial property.
P eople
Simon Keswick retired as a Director on 1st January 2020. Charles
Allen-Jones retired from the Board on 9th May 2019. The Board would
like to record its gratitude to both of them for their significant
contribution to the Group over many years. Lincoln Leong joined the
Board with effect from 2nd August 2019.
As separately announced on 5th March 2020, with effect from 15th
June 2020 the roles of Executive Chairman and Managing Director,
which have been held on a combined basis by Ben Keswick since 31st
December 2018, will revert to being separate. Ben Keswick will
remain as Executive Chairman and John Witt, currently Chief
Financial Officer, will join the Board and take on the role of
Managing Director of the Company. Graham Baker will join the Group
and replace John Witt as Chief Financial Officer with effect from
15th June 2020.
Outlook
While the short-term outlook is likely to continue to be
challenging and performance in the year ahead will depend on the
duration, geographic extent and impact of the COVID-19 outbreak and
the measures taken to control it , the Group takes a long-term view
and is confident in the underlying economic resilience of China and
the wider region. The Group is optimistic about the prospects for a
speedy recovery once the situation has stabilised and remains
confident in the mid- to long-term prospects for its businesses and
the markets in which they operate.
Ben Keswick
Executive Chairman and Managing Director
Managing Director's Review
Introduction
The Group's profit generation and related cash flows and
retained earnings have supported continued investment, enabling
high levels of capital expenditure to be combined with low levels
of debt. The Group's capital investment, including expenditure on
properties for sale, was US$5.4 billion in 2019, and capital
investment at
Jardine Matheson, and its associates and joint ventures exceeded US$5.2 billion.
The Group provides its businesses with access to the financial
resources, expertise, people and relationships necessary to support
their development and enable them to compete effectively in rapidly
evolving operating environments. The Group's strategy, strong
financial position and investment in the development of both
existing businesses and new areas of activity provide the
foundation for consistent profit growth over the long term.
The Group remains focused on the opportunities and challenges
presented by changing technologies and digitalisation. Its
innovation agenda has continued to progress in the last year and
has included the appointment of a new Group Director of Digital,
who is leading the further development of the Group's digital and
innovation strategy. There is a particular focus on modernising the
Group's core business operations - looking at opportunities to
leverage digital and new ways of working to drive a modern,
efficient operating environment - and on using digital to help
drive the Group's revenue generating capabilities in both its
consumer-facing and business-to-business operations.
The Group is also focused on broadening and deepening capability
across its businesses. Over the past year the Group has increased
its investment in meeting the needs of its people, by promoting
lifelong learning and training, including the rollout of a range of
new and improved senior leadership programmes and the
implementation of digital learning platforms; offering greater
career opportunities; enhancing the Group's employer brand
(including strengthening the Group's graduate training programme);
and recruiting a range of new skills and resources into the
business.
The Group takes its responsibility as a corporate citizen
seriously and believes that it is essential for a proactive
approach to sustainability to be taken both at a Group level and
among its businesses. A sustainability leadership council,
comprising senior management from across the Group's businesses,
was established in 2019 and it has recently formulated and adopted
a Group sustainability strategy, with input from colleagues across
the business, which will be progressively implemented in the coming
year.
Business Performance
Jardine Matheson
Jardine Matheson achieved an underlying profit before tax for
the year of US$4,678 million, a decrease of 4%. The underlying
profit attributable to shareholders was down 4% at US$1,589
million, while underlying earnings per share also fell by 4% to
US$4.23. The profit attributable to shareholders for the year was
US$2,838 million, benefiting mainly from a net gain of US$1.5
billion on the disposal of JLT and the US$49 million net
revaluation gain on other investments. These were partially offset
by the US$337 million net revaluation loss arising from the annual
revaluation of the Group's investment properties. This compares
with US$1,722 million in 2018.
-- Jardine Pacific
Jardine Pacific produced an underlying net profit of US$164
million, 2% higher than 2018. The net profit after non-trading
gains was US$285 million.
JEC delivered strong profit growth, primarily from its Hong Kong
operations and in part as a result of its earlier investment in
modernising its core business and increasing revenues via business
efficiency initiatives. Gammon saw good profit growth, mainly due
to the timing of project completions. Its order book remains
strong. Jardine Schindler provided a slightly lower contribution as
a result of challenging market conditions in Southeast Asia.
Jardine Restaurants saw profits impacted by difficult trading
conditions in Hong Kong and the upfront costs of its investment in
process re-engineering projects in Hong Kong and Taiwan. KFC Taiwan
produced good profit growth. HACTL's performance was down against
last year, due to a reduction in cargo throughput tonnage.
JTH performed well as both JOS and Innovix delivered better
results. The sale of the JOS business was completed in December
2019.
Hong Kong-listed Greatview, in which a 28% stake has been held
by Jardine Strategic since June 2017, continued to see volume
growth despite intense competition in the China segment and lower
sales from its international division.
-- Motors
The Group's Motors business produced higher underlying net
profit in 2019 of US$196 million, primarily due to a strong
contribution from the investment in Zhongsheng, which saw increased
sales and stable margins for the first six months of the year, and
in respect of which Jardines received the benefit of a full year's
contribution, compared with eight months in the prior year.
In the Group's wholly-owned Motors businesses, Zung Fu in the
Chinese mainland benefited from higher new car sales and steady
margins. However, weak market sentiment in Hong Kong and difficult
market conditions in the United Kingdom adversely affected
dealership profits. In addition, there was a net loss arising from
dealership disposals in the United Kingdom.
In support of the Group's ambition to strengthen its automotive
businesses and ensure that they are resilient and able to address
anticipated long-term disruption in the sector, Jardine
International Motors ('JIM') was formed in 2019 to provide central
management and oversight in order effectively to harness expertise
and talent, increase customer focus and create economies of scale
across the Group's automotive interests in a coordinated way in an
increasingly complex environment. JIM currently comprises leading
Asian automotive businesses including Zung Fu Motors Group in the
Chinese mainland, Hong Kong and Macau; Cycle & Carriage in
Singapore, Malaysia and Myanmar; and Tunas Ridean in Indonesia.
Hongkong Land
Hongkong Land achieved a further year of record underlying
profit growth, with a 4% increase to US$1,076 million. The group's
Investment Properties business maintained stable profits and
Development Properties achieved a solid performance, building on a
strong previous year, with a higher contribution from the Chinese
mainland partially offset by lower contributions from other
markets.
Including net losses of US$878 million resulting from lower
valuations of the group's investment properties, profit
attributable to shareholders was US$198 million. This compares to
US$2,457 million in 2018, which included net revaluation gains of
US$1,421 million. The group remains well-financed, with net debt of
US$3.6 billion at the year end, broadly unchanged from the end of
2018 and with net gearing unchanged at 9%. Net debt will increase
in 2020 as payments are made for land purchases to which the group
has already committed.
Investment Properties
In Hong Kong, office leasing activities in Central were slower
in 2019 compared to the prior year as a result of uncertainties
caused by the China-US trade negotiations and the social unrest in
Hong Kong. The performance of the group's Central office portfolio,
however, continues to be resilient and rental reversions remain
positive, with average office rents increasing during the year. The
Central retail portfolio remains fully occupied and retains its
reputation as Hong Kong's premier shopping destination. It
delivered a respectable performance over the Christmas period
following several challenging months for the retail market in Hong
Kong. Average retail rents decreased in the year, however, due to
temporary rent relief as a result of the social unrest.
The value of the group's Hong Kong Investment Properties
portfolio decreased by 2% in the year due to lower open market
rents. There was slightly higher vacancy in the group's Singapore
office portfolio, but rental reversions were positive and average
rents increased in the year.
In February 2020, Hongkong Land acquired a large site in a prime
location along the Huangpu River in the Xuhui District of Shanghai,
the predominant commercial hub in the Chinese mainland. The
acquisition illustrates our long-term confidence in the Chinese
mainland and provides an attractive opportunity to develop and
operate a commercial complex of scale in line with the group's
long-term strategy of acquiring prime sites in key gateway cities
across Asia. The project mainly comprises office and retail space,
with a developable area of 1.1 million sq. m, and will be developed
in multiple phases to 2027.
Development Properties
2019 was a solid year for the group's Development Properties,
building on a strong year in 2018, with a higher contribution from
the Chinese mainland partially offset by lower contributions from
other markets. In the Chinese mainland, sentiment in the group's
core markets remained broadly stable. Higher sales completions led
to an increase in profit contribution, whilst the group's
attributable interest in contracted sales was higher than 2018 due
to a change in sales location mix.
During the year, the group acquired five new residential sites
in the Chinese mainland - all in cities where it already has a
presence - with a wholly-owned project in each of Chongqing and
Hangzhou, and joint ventures in each of Chongqing, Shanghai and
Wuhan.
In Singapore, profits recognised in 2019 were lower than the
prior year, while pre-sales at projects under construction were
within expectations. The group's joint venture projects in the rest
of Southeast Asia performed within expectations.
Dairy Farm
Dairy Farm's multi-year transformation programme to reshape and
reorganise the business, adapting to the changing needs of
customers, continued to gain momentum during 2019. Opportunities
are being unlocked across the group as the business seeks to
leverage its scale effectively and develop a more coherent approach
to improving its customer proposition, both by banner and at a
country level. The group's space optimisation plan, new store
formats and improvement programmes generated greater efficiencies
and started to deliver tangible results in the year.
Consistent with Dairy Farm's strategy of proactively managing
its business portfolio as well as the ongoing execution of its
space optimisation plan, sales of US$11.2 billion for the year by
Dairy Farm's subsidiaries were 5% behind those of 2018. Underlying
operating profit was US$437 million, 14% lower than 2018, primarily
due to the impact of the social unrest in Hong Kong, whose impact
was felt to the greatest extent by Mannings, as well as increased
cost of goods and ongoing investments in the Home Furnishings
business. Underlying profit attributable to shareholders was US$321
million, down 10% from US$358 million last year.
Grocery Retail
2019 saw a significant improvement in results in Dairy Farm's
Southeast Asia Grocery Retail businesses, as its space optimisation
plan took effect. The foundations for future growth by the business
were also strengthened by the ongoing transformation and
improvement programmes. North Asia Grocery Retail sales were
stronger, but overall profits there were weaker, impacted by cost
pressures and investments in people and capabilities, although the
Wellcome Hong Kong business delivered an improving trend in
underlying profit performance.
Convenience
Sales in the Convenience business increased in the year, driven
by new store growth and strong like-for-like sales in the Chinese
mainland in particular. Enhancements to range and services are
popular with customers and there is a focus on brand
differentiation to support sales growth. Profits for the year
declined, however, due primarily to investments in the expansion of
the 7-Eleven store network in Guangdong. Profits in 2018 were also
positively impacted by one-off items which were not repeated in
2019.
Health & Beauty
Total sales for Dairy Farm's Health and Beauty business
increased slightly, with strong growth in Southeast Asia, but
operating profit declined, as the business was impacted by the
challenging market conditions in Hong Kong. The group has been
addressing these challenging conditions by adapting its offer to
changing customer needs as well as prudent management of costs.
Weakness in North Asia Health and Beauty was partially offset by
strong revenue and like-for-like sales growth in Southeast Asia,
particularly in Indonesia and Malaysia. Guardian in Southeast Asia
delivered a strong performance during the year, with improvements
in operating standards, service and product availability, and it
benefited from a growing middle-class customer base in Indonesia,
Malaysia, and Vietnam.
Home Furnishings
In Home Furnishings, IKEA's sales were higher in the year but
operating margins were adversely affected by the impact of currency
movements on the cost of goods. Operating profits also fell as the
business incurred start-up costs for two new stores opened in the
year and it invested in four stores under development which will
open in 2020.
Associates
The contribution from key associate Maxim's was lower than the
prior year, as the business was impacted by the ongoing social
unrest in Hong Kong. Despite the challenging market conditions in
the second half, however, Maxim's reported 4% growth in sales
overall, as it saw the benefit of its acquisition of the Starbucks
Thailand business.
Yonghui in the Chinese mainland reported strong sales growth and
positive like-for-like sales. Underlying profit growth in Yonghui
benefited from the partial sell down of their investment in the
Yunchuang Technology business, which was announced in December
2018. Dairy Farm also benefited from the contribution from its
interest in Robinsons Retail, which it acquired in late 2018.
Mandarin Oriental
Mandarin Oriental's underlying profit significantly decreased
from US$65 million in 2018 to US$41 million in 2019, as a result of
the closure of The Excelsior, the social unrest in Hong Kong and
the major renovation in Bangkok. Earnings benefited, however, from
the reopening of the London hotel following the fire in 2018 and
the receipt of insurance proceeds following the final settlement of
the insurance claim in respect thereof.
The majority of the group's owned or partially-owned properties
reported better earnings. The remainder of portfolio performed
broadly in line with last year.
Several non-trading items were recognised during the year,
including closure costs relating to The Excelsior and a decrease in
its valuation, resulting in a loss attributable to shareholders of
US$56 million in the year, compared to a profit attributable to
shareholders of US$43 million in 2018.
The Excelsior in Hong Kong closed in March 2019 for
redevelopment as a commercial property, and the demolition phase
started in September 2019. The project is expected to take around
six years to complete.
The group opened four new hotels in 2019 in Dubai, Doha, Beijing
and Lake Como. The group continues to build its development
pipeline, with seven new management contracts signed and announced
in 2019, including six new hotels and one standalone Residences
project. New Mandarin Oriental hotels were announced in Istanbul,
Nanjing, Lake Lucerne, Dallas and Tel Aviv and the group took over
management of The Emirates Palace in Abu Dhabi at the beginning of
2020.
Jardine Cycle & Carriage
Underlying profit attributable to shareholders at Jardine Cycle
& Carriage ('JC&C') was 1% higher at US$863 million and p
rofit attributable to shareholders increased to US$881 million from
US$418 million in 2018, which included net non-trading losses of
US$438 million, principally fair value losses related to
non-current investments. Astra's contribution to underlying profit
of US$716 million was relatively stable compared to the previous
year, while the contributions from the group's Direct Motor
Interests and Other Strategic Interests were both lower.
Direct Motor Interests
Direct Motor Interests contributed US$63 million to the group's
underlying profit, 11% lower than the prior year. The contribution
from C ycle & Carriage Singapore ('CCS') fell, with car sales
growing despite a decrease in the overall Singapore passenger car
market, but lower margins due to stronger competitive pressure.
CCS' market share increased as a result of the launch of new models
and competitive pricing.
In Indonesia, Tunas Ridean saw a stronger contribution from its
automotive and consumer finance operations but lower profits from
its rental business. Cycle & Carriage Bintang in Malaysia made
a loss in 2019, compared to a profit in 2018.
Other Strategic Interests
The contribution from Other Strategic Interests was 13% lower at
US$126 million. Other Strategic Interests now include Thaco
consistent with its expanding investments in property and
agriculture. Thaco's contribution of US$49 million was 34% lower
than last year, due to a lower contribution from its automotive
business following a decline in vehicle sales and lower margins in
a competitive market. The contribution from Thaco's real estate
business was significantly lower due to the slowdown in the
property market. The group increased its interest in Thaco from
25.3% to 26.6% during the year, for consideration of US$168
million.
Siam City Cement's contribution of US$24 million was 16% higher
than the previous year. Its improved domestic performance in
Thailand was offset by a lower contribution from its regional
operations, in particular in South Vietnam. The contribution from
Refrigeration Electrical Engineering Corporation ('REE') was 4%
lower than the previous year, due to w eaker performances from its
hydropower investments and its M&E business, which were
partially offset by a stronger contribution from real estate.
JC&C increased its stake in REE during the year from 24.9% to
29.0% for US$25 million, by way of a public tender offer and market
purchases.
The group's investment in Vinamilk delivered dividend income of
US$36 million, compared to US$32 million in the previous year.
Vinamilk's 2019 profit was 3% higher in local currency terms.
Astra
Astra's net profit for 2019 under Indonesian accounting
standards was Rp 21.7 trillion, equivalent to US$1.5 billion. The
group's n et debt, excluding financial services subsidiaries, was
Rp22.2 trillion, equivalent to US$ 1.6 billion, at 31st December
2019, compared with Rp13.0 trillion, equivalent to US$ 0.9 billion,
at the end of 2018, due mainly to the group's further investments
in its toll road businesses and Gojek, as well as capital
expenditure in its mining contracting business.
Automotive
Net income from Astra's automotive division was down 1% at
US$594 million. This was mainly due to lower car sales volumes and
increased manufacturing costs, partially offset by higher
motorcycle sales volumes. Car sales were 8% lower. The Indonesian
wholesale market declined by 11% in 2019 but Astra increased its
market share from 51% to 52%.
Motorcycle sales increased by 3% in the year. The Indonesian
wholesale market increased by 2%, with Astra's market share
slightly higher at 76%. Astra Otoparts reported a 21% increase in
net income, largely due to higher revenue from the replacement
market and lower production costs.
Financial Services
Net income from Astra's financial services division increased by
22% to US$415 million, mainly due to a larger loan portfolio and an
improvement in non-performing loans. Consumer finance businesses
saw an 8% increase in the amount financed to US$6.2 billion. The
net income contribution from Astra's car-focused finance companies
increased by 29% to US$106 million, with lower non-performing loan
losses. The net income contribution from the group's
motorcycle-focused finance business increased by 11% to US$187
million, mainly due to a larger loan portfolio.
The group's heavy equipment-focused finance operations saw an
18% decrease in the amounts financed to US$302 million. The net
income contribution from this business grew, however, by 14% to
US$7 million, as a result of lower loan provisions.
Permata Bank reported a 66% increase in net income to US$106
million, due to improved revenue and lower loan impairment levels,
attributable to improved loan quality and better levels of recovery
from non-performing loans. The bank's gross and net non-performing
loan ratios both improved. General insurance company Asuransi Astra
Buana reported 4% growth in net income at US$77 million, with
increased investment income.
Heavy Equipment, Mining, Construction and Energy
Net income from Astra's heavy equipment, mining, construction
and energy division increased by 1% to US$475 million, mainly due
to the contribution from the new gold mining operation, offset by
the impact of lower heavy equipment sales and a loss incurred in
the general contracting business . United Tractors reported a 2%
increase in net income to US$801 million. Agincourt Resources
achieved gold sales of 410,000 oz. Komatsu heavy equipment sales
fell by 40%, with parts and service revenues also lower.
Mining contracting operations saw a 1% higher overburden removal
volume at 989 million bank cubic metres, and 5% higher coal
production at 131 million tonnes. Coal mining subsidiaries were
adversely impacted by lower coal prices.
General contractor Acset Indonusa reported a net loss of US$77
million, compared to a net income of US$1 million the year before.
This was mainly due to increased project and funding costs for
several ongoing contracts.
Infrastructure and Logistics
Net income from Astra's infrastru c ture and logistics division
increased by 49% to US$21 million , mainly due to improved toll
road revenue, reflecting 22% higher traffic volume in Astra's 350km
of operational toll roads along the Trans-Java network and the
Kunciran Serpong toll road . Serasi Autoraya's net income decreased
by 17% to US$18 million, due to lower used car sales and a decline
in its car leasing business.
Agribusiness
Net income from Astra's agribusiness was down by 85% at US$12
million. This was primarily due to an 8% fall in average crude palm
oil prices, despite a 3% increase in c rude palm oil and
derivatives sales to 2.3 million tonnes. There have, however,
recently been encouraging signs of improvement in prices.
Conclusion
The Board would like to express its gratitude for the hard work,
dedication and professionalism of the Group's 464,000 employees
over the past year. We are proud of how colleagues have performed
and responded to, and shown great resilience in the face of, the
ongoing challenging conditions for many of the Group's
businesses.
2020 is likely to continue to present challenges to the Group's
businesses but we are well placed to address them and drive the
Group towards future success.
Ben Keswick
Executive Chairman and Managing Director
Jardine Strategic Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2019
2019 2018
Underlying Non-
Underlying Non- business trading
business trading performance items Total
performance items Total US$m US$m US$m
US$m US$m US$m restated restated restated
Revenue (note 2) 32,665 - 32,665 34,094 - 34,094
Net operating costs (note
3) (28,930) 39 (28,891) (30,301) (805) (31,106)
Change in fair value
of investment properties - (915) (915) - 1,236 1,236
-------- ------- -------- ----------- -------- ---------
Operating profit 3,735 (876) 2,859 3,793 431 4,224
Net financing charges
* financing charges (751) - (751) (621) - (621)
* financing income 221 - 221 172 - 172
(530) - (530) (449) - (449)
Share of results of Jardine
Matheson (note 4) 187 946 1,133 226 (17) 209
Share of results of associates
and joint ventures (note
5)
-------- ------- -------- ----------- -------- ---------
* before change in fair value of investment properties 1,108 12 1,120 1,063 1 1,064
* change in fair value of investment properties - (11) (11) - 189 189
1,108 1 1,109 1,063 190 1,253
Profit before tax 4,500 71 4,571 4,633 604 5,237
Tax (note 6) (902) (18) (920) (917) 11 (906)
-------- ------- -------- ----------- -------- ---------
Profit after tax 3,598 53 3,651 3 ,716 615 4,331
-------- ------- -------- ----------- -------- ---------
Attributable to:
Shareholders of the Company
(notes 7 & 9) 1,681 497 2,178 1,729 98 1,827
Non-controlling interests 1,917 (444) 1,473 1,987 517 2,504
-------- ------- -------- ----------- -------- ---------
3,598 53 3,651 3,716 615 4,331
-------- ------- -------- ----------- -------- ---------
US$ US$ US$ US$
Earnings per share (note
8)
- basic 2.98 3.86 3.04 3.21
- diluted 2.98 3.86 3.04 3.21
-------- -------- ----------- ---------
Jardine Strategic Holdings Limited
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2019
2019 2018
US$m US$m
restated
Profit for the year 3,651 4 ,331
Other comprehensive income/(expense)
Items that will not be reclassified
to profit or loss:
--------
Remeasurements of defined benefit plans (8) (4)
Net revaluation surplus before transfer
to
investment properties
* right-of-use assets 2,943 2
* tangible assets - 1
Tax on items that will not be reclassified 4 -
2,939 (1)
Share of other comprehensive income/(expense)
of
Jardine Matheson 12 (19)
Share of other comprehensive (expense)/
income of
associates and joint ventures (13) 5
----- --------
2,938 (15)
Items that may be reclassified subsequently
to profit
or loss:
Net exchange translation differences
----- --------
- net gain/(loss) arising during the
year 486 (776)
- transfer to profit and loss 3 45
489 (731)
Revaluation of other investments at
fair value through
other comprehensive income
----- --------
- net gain/(loss) arising during the
year 20 (22)
- transfer to profit and loss (1) (3)
19 (25)
Cash flow hedges
----- --------
- net (loss)/ gain arising during the
year (93) 31
- transfer to profit and loss (4) -
(97) 31
Tax relating to items that may be reclassified 29 (13)
Share of other comprehensive income/
(expense) of
Jardine Matheson 74 (48)
Share of other comprehensive income/
(expense) of
associates and joint ventures 211 (489)
----- --------
725 (1,275)
Other comprehensive income/ (expense)
for the year,
net of tax 3,663 (1,290)
----- --------
Total comprehensive income for the year 7,314 3 ,041
----- --------
Attributable to:
Shareholders of the Company 4,872 1 ,215
Non-controlling interests 2,442 1 ,826
----- --------
7,314 3 ,041
----- --------
Jardine Strategic Holdings Limited
Consolidated Balance Sheet
at 31st December 2019
At 31st December At 1st January
2018 2018
2019 US$m US$m
US$m restated restated
Assets
Intangible assets 2,693 2 ,492 2,081
Tangible assets 6,841 6 ,548 5,863
Right-of-use assets 4,406 4,684 4,851
Investment properties 36,817 34 ,299 33,100
Bearer plants 503 487 4 98
Investment in Jardine Matheson 3,703 3,187 3,072
Associates and joint ventures 15,288 13,735 12 ,175
Other investments 2,675 2 ,543 2,687
Non-current debtors 3,023 3, 048 2 , 969
Deferred tax assets 415 340 375
Pension assets 2 - 5
------- --------- --------------
Non-current assets 76,366 71 ,363 67 ,676
------- --------- --------------
Properties for sale 2,441 2,339 2 ,594
Stocks and work in progress 2,811 2,960 2,681
Current debtors 7,424 6 ,914 6 ,227
Current investments 29 50 23
Current tax assets 252 185 1 62
Bank balances and other liquid
funds
------- --------- --------------
- non-financial services companies 5,346 4 ,403 5 ,061
- financial services companies 256 187 241
5,602 4 ,590 5,302
------- --------- --------------
18,559 17,038 16,989
A ssets classified as held for
sale - - 11
------- --------- --------------
Current assets 18,559 17,038 17,000
------- --------- --------------
Total assets 94,925 88 ,401 84 ,676
------- --------- --------------
Equity
Share capital 56 56 56
Share premium and capital reserves 941 1,025 1,011
Revenue and other reserves 37,054 32 ,290 31,221
Own shares held (2,294) (2,139) (2,000)
------- ------- -------
Shareholders' funds 35,757 31 ,232 30 ,288
Non-controlling interests 29,903 28 ,342 27,640
------- ------- -------
Total equity 65,660 59 ,574 57,928
------- ------- -------
Liabilities
Long-term borrowings
------- ------- -------
- non-financial services companies 6,976 5,291 5,855
- financial services companies 1,697 1,655 1 ,487
8,673 6 ,946 7 ,342
Non-current lease liabilities 2,842 3,071 3,133
Deferred tax liabilities 767 726 494
Pension liabilities 364 304 297
Non-current creditors 356 339 322
Non-current provisions 289 281 243
------- ------- -------
Non-current liabilities 13,291 11,667 11,831
------- ------- -------
Current creditors 8,287 8 ,863 8,558
Current borrowings
------- ------- -------
- non-financial services companies 4,368 5 ,083 2,975
- financial services companies 1,853 1 ,824 2 ,154
6,221 6 ,907 5,129
Current lease liabilities 795 782 738
Current tax liabilities 507 431 338
Current provisions 164 177 148
------- ------- -------
15,974 17,160 14,911
Liabilities classified as held
for sale - - 6
------- ------- -------
Current liabilities 15,974 17,160 14,917
------- ------- -------
Total liabilities 29,265 28,827 26,748
------- ------- -------
Total equity and liabilities 94,925 88 ,401 84 ,676
------- ------- -------
Jardine Strategic
Holdings Limited
Consolidated Statement of
Changes
in Equity
for the year ended 31st
December 2019
Attributable
to Attributable
Contributed Asset Own shareholders to
Share Share Capital Revenue surplus revaluation Hedging Exchange shares of the non-controlling Total
capital premium reserves reserves US$m reserves reserves reserves held Company interests equity
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
2019
At 1st January
- as previously
reported 56 816 209 34,291 304 264 (13) (2,267) (2,139) 31,521 28,428 59,949
- change in
accounting
polic
ies (note 1) - - - (295) - - - 6 - (289) (86) (375)
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
- as restated 56 816 209 33,996 304 264 (13) (2,261) (2,139) 31,232 28,342 59,574
Total
comprehensive
income - - - 2,197 - 2,302 (14) 387 - 4,872 2,442 7,314
Dividends paid
by the Company
(note 10 ) - - - (195) - - - - - (195) - (195)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (905) (905)
Unclaimed
dividends
forfeited - - - 1 - - - - - 1 - 1
Employee share
option schemes - - 2 - - - - - - 2 - 2
Scrip issued in
lieu of
dividends - - - 6 - - - - - 6 - 6
Increase in own
shares held - - - - - - - - (155) (155) - (155)
Subsidiaries
acquired - - - - - - - - - - 14 14
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 18 18
Change in
interests in
subsidiaries - - - (7) - - - - - (7) (8) (15)
Change in
interests in
associates
and joint
ventures - - - 1 - - - - - 1 - 1
Transfer - - (86) 86 - - - - - - - -
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
At 31st December 56 816 125 36,085 304 2,566 (27) (1,874) (2,294) 35,757 29,903 65,660
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
2018
At 1st January
- as previously
reported 56 816 195 32,635 304 264 (7) (1,690) (2,000) 30,573 27,722 58,295
- change in
accounting
polic
ies (note 1) - - - (285) - - - - - (285) (82) (367)
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
- as restated 56 816 195 32,350 304 264 (7) (1,690) (2,000) 30,288 27,640 57,928
Total
comprehensive
income - - - 1,792 - - (6) (571) - 1,215 1,826 3,041
Dividends paid
by the Company
(note 10 ) - - - (185) - - - - - (185) - (185)
Dividends paid
to
non-controlling
interests - - - - - - - - - - (844) (844)
Unclaimed
dividends
forfeited - - - 1 - - - - - 1 - 1
Employee share
option schemes - - 19 - - - - - - 19 - 19
Scrip issued in
lieu of
dividends - - - 9 - - - - - 9 - 9
Increase in own
shares held - - - - - - - - (139) (139) - (139)
Subsidiaries
acquired - - - - - - - - - - 57 57
Capital
contribution
from
non-controlling
interests - - - - - - - - - - 22 22
Change in
interests in
subsidiaries - - - 18 - - - - - 18 (378) (360)
Change in
interests in
associates
and joint
ventures - - - 6 - - - - - 6 19 25
Transfer - - (5) 5 - - - - - - - -
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
At 31st December 56 816 209 33 ,996 304 2 64 (13) (2,261) ( 2 ,139) 31 ,232 28 ,342 59 ,574
------- ------- --------- --------- ------------- ------------ --------- --------- ----------- ------------- ---------------- ---------
Contributed surplus represents the excess in value of shares acquired in consideration for the issue of
the Company's shares, over the nominal value of those shares issued. Under the Bye-laws of the Company,
the contributed surplus is distributable.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Jardine Strategic Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2019
2019 2018
US$m US$m
restated
Operating activities
------- ---------
Cash generated from operations 4,728 5 ,218
Interest received 180 156
Interest and other financing charges paid (744) (609)
Tax paid (927) (843)
------- ---------
3,237 3,922
Dividends from Jardine Matheson 734 180
Dividends from associates and joint ventures 992 783
Cash flows from operating activities 4,963 4,885
Investing activities
------- ---------
( 1,286
Purchase of subsidiaries (note 11(a)) (28) )
Purchase of shares in Jardine Matheson - (99)
Purchase of associates and joint ventures (1, 191
(note 11(b)) (1,088) )
( 706
Purchase of other investments (note 11(c)) (409) )
Purchase of intangible assets (216) (113)
Purchase of tangible assets (1,129) (1,236)
Additions to right-of-use assets (60) (8)
( 163
Additions to investment properties (168) )
Additions to bearer plants (44) ( 45 )
Advance to associates and joint ventures ( 990
(note 11(d)) (1,025) )
Advance from and repayment from associates
and joint ventures (note 11(e)) 920 952
Sale of associates and joint ventures 3 -
Sale of other investments (note 11(f)) 450 235
Sale of tangible assets 61 59
Sale of right-of-use assets 3 12
Cash flows from investing activities (2,730) ( 4 ,579)
Financing activities
------- ---------
Capital contribution from non-controlling
interests 18 22
Change in interests in subsidiaries (note
11(g)) (15) (360)
Drawdown of borrowings 7,336 7,235
Repayment of borrowings (6,454) (5,691)
Principal elements of lease payments (893) (890)
Dividends paid by the Company (376) (351)
Dividends paid to non-controlling interests (905) (844)
Cash flows from financing activities (1,289) (879)
------- ---------
Net increase/ (decrease) in cash and cash
equivalents 944 (573)
Cash and cash equivalents at 1st January 4,555 5 ,298
Effect of exchange rate changes 84 (170)
------- ---------
Cash and cash equivalents at 31st December 5,583 4 ,555
------- ---------
Jardine Strategic 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
2019 which have been prepared in conformity with International
Financial Reporting Standards, including International Accounting
Standards and Interpretations adopted by the International
Accounting Standards Board.
The Group has adopted IFRS 16 'Leases' from 1st January 2019 .
Other amendments or interpretations, which are effective in 2019
and relevant to the Group's operations, do not have a significant
effect on the Group's results, financial position and accounting
policies.
The Group has elected to early adopt the 'Interest Rate
Benchmark Reform: Amendments to IFRS 9, IAS 39 and IFRS 7'
(effective 1st January 2020) in relation to hedge accounting for
the Group's annual reporting period commencing 1st January 2019. In
accordance with the transition provisions, the amendments have been
adopted retrospectively with respect to hedging relationships that
existed at the start of the reporting period or were designated
thereafter. The amendments provide temporary relief from applying
specific hedge accounting requirements to hedging relationships
which are directly affected by the uncertainty arising from the
reforms and replacement of existing benchmark interest rates such
as LIBOR and other inter-bank offered rates ('IBOR reform'). The
forthcoming IBOR reform may take effect at different times and may
have a different impact on the hedged items (the fixed and floating
rate borrowings) and the hedging instruments (the interest rate
swaps and cross currency swaps used to hedge the borrowings). The
reliefs have the effect that the IBOR reform should not generally
cause hedge accounting to terminate. The reliefs under the
amendments will end when the uncertainty arising from the IBOR
reform are no longer present; or the hedging relationship is
discontinued. Early adoption of these amendments has no impact on
the Group's consolidated financial statements for 2019.
Apart from the above, the Group has not early adopted any
standard, interpretation or amendments that have been issued but
not yet effective.
IFRS 16 'Leases' replaces IAS 17 'Leases' and related
interpretations, and introduces a comprehensive model for the
identification of lease arrangements and accounting treatments for
both lessors and lessees. The distinction between operating and
finance leases is removed for lessee accounting, and is replaced by
a model where a lease liability and a corresponding right-of-use
asset have to be recognised on the balance sheet for almost all
leases by the lessees. The Group's recognised right-of-use assets
primarily relate to property leases, which are entered into for use
as retail stores and offices. There are also right-of-use assets
relate to plant & machinery and motor vehicles. Prior to 2019,
payments made under operating leases were charged to profit and
loss on a straight-line basis over the period of the lease. Upon
the adoption of IFRS 16, each lease payment is allocated between
settlement of the lease liability and finance cost. The finance
cost is charged to profit and loss over the lease period. The
right-of-use asset is depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis.
In addition, leasehold land which represents payments to third
parties to acquire interests in property, previously included in
intangible assets and tangible assets, is now presented under
right-of-use assets. Leasehold land is amortised over the useful
life of the lease, which includes the renewal period if the lease
is likely to be renewed by the Group without significant cost.
The accounting for lessors does not change significantly.
Changes to accounting policies on adoption of IFRS 16 have been
applied retrospectively, and the comparati ve financial statements
have been restated.
The effects of adopting IFRS 16 were as follows:
(a) On the consolidated profit and loss account for the year ended 31st December 2018:
Increase/(decrease)
in profit
US$m
Net operating costs 143
Net financing charges (143)
Share of results of Jardine Matheson (2)
Share of results of associates and
joint ventures (19)
Profit before tax (21)
Tax 6
Profit after tax (15)
Attributable to:
Shareholders of the Company* (9)
Non-controlling interests (6)
(15)
* Further analy s ed as:
Underlying profit attributable to shareholders (55)
Non-trading items
-------------------
* sale and closure of businesses 20
* restructuring of businesses 26
-------------------
46
Profit attributable to shareholders (9)
Basic underlying earnings per share
(US$) (0.10)
Diluted underlying earnings per share
(US$) (0.09)
Basic earnings per share (US$) (0.02)
Diluted earnings per share (US$) (0.02)
(b) On the consolidated statement of comprehensive income for
the year ended 31 st December 2018:
Increase/(decrease)
in total
comprehensive
income
US$m
Profit for the year (15)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Net exchange translation differences
-------------------
* net gain arising during the year 8
* transfer to profit and loss (2)
Share of other comprehensive income of
Jardine Matheson 1
Other comprehensive income for the year,
net of tax 7
Total comprehensive income for the year (8)
Attributable to:
Shareholders of the Company (4)
Non-controlling interests (4)
(8)
(c) On the consolidated balance sheet at 1st January
Increase/(decrease)
2019 2018
US$m US$m
Assets
Intangible assets (713) (751)
Tangible assets (443) (428)
Right-of-use assets 4,684 4,851
Investment in Jardine Matheson (32) (31)
Associates and joint ventures (38) (21)
Non-current debtors (12) (50)
Deferred tax assets (9) -
Current debtors (79) (33)
---------- ---------
Total assets 3,358 3,537
---------- ---------
Equity
Revenue and other reserves (289) (285)
Non-controlling interests (86) (82)
---------- ---------
Total equity (375) (367)
---------- ---------
Liabilities
Long-term borrowings (24) (1)
Non-current lease liabilities 3,071 3,133
Deferred tax liabilities (35) (21)
Non-current provisions 9 92
---------- ---------
Non-current liabilities 3,021 3,203
---------- ---------
Current creditors (36) (42)
Current borrowings (14) (3)
Current lease liabilities 782 738
Current provisions (20) 8
Current liabilities 712 701
Total liabilities 3,733 3,904
Total equity and liabilities 3,358 3,537
---------- ---------
(d) On the consolidated cash flow statement for the year ended
31st December 2018:
Inflows/(outflows)
US$m
Operating activities
Cash generated from operations 1,026
Interest and other financing charges paid (143)
883
------------------
Investing activities
Purchase of intangible assets 8
Additions to right-of-use assets (8)
Sale of intangible assets (12)
Sale of right-of-use assets 12
-
------------------
Financing activities
Repayment of borrowings 7
Principal elements of lease payments (890)
(883)
------------------
Net change in cash and cash equivalents -
==================
(e) Changes in principal accounting policies on adoption of IFRS 16
Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.
Lease contracts may contain lease and non-lease components. The
Group allocates the consideration in the contract to lease and
non-lease component based on their relative stand-alone prices. For
property leases where the Group is a lessee, it has elected not to
separate lease and immaterial non-lease components and accounts for
these items as a single lease component.
(i) As a lessee
The Group enters into property leases for use as retail stores
and offices, as well as leases for plant & machinery and motor
vehicles for use in its operations.
The Group recognises right-of-use assets and lease liabilities
at the lease commencement dates, that is the dates the underlying
assets are available for use. Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment, and
adjusted for any remeasurement of lease liabilities. The cost of
the right-of-use assets includes amounts of the initial measurement
of lease liabilities recognised, lease payments made at or before
the commencement dates less any lease incentives received, initial
direct costs incurred and restoration costs. Right-of-use assets
are depreciated using the straight-line method over the shorter of
their estimated useful lives and the lease terms.
When right-of-use assets meet the definition of investment
properties, they are presented in investment properties, and are
initially measured at cost and subsequently measured at fair value,
in accordance with the Group's accounting policy.
The Group also has interests in leasehold land for use in its
operations. Lump sum payments were made upfront to acquire these
land interests from their previous registered owners or governments
in the jurisdictions where the land is located. There are no
ongoing payments to be made under the term of the land leases,
other than insignificant lease renewal costs or payments based on
rateable value set by the relevant government authorities. These
payments are stated at cost and are amortised over the term of the
lease which includes the renewal period if the lease can be renewed
by the Group without significant cost.
Lease liabilities are measured at the present value of lease
payments to be made over the lease terms. Lease payments include
fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised and
payments of penalties for terminating a lease, if the lease term
reflects the Group exercising that option. The variable lease
payments that do not depend on an index or a rate are recognised as
expense in the period on which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. Lease liabilities are measured at amortised cost
using the effective interest method. After the commencement date,
the amount of lease liabilities is increased by the interest costs
on the lease liabilities and decreased by lease payments made.
The carrying amount of lease liabilities is remeasured when
there is a change in the lease term, or there is a change in future
lease payments arising from a change in an index or rate, or there
is a change in the Group's estimate of the amount expected to be
payable under a residual guarantee, or there is a change arising
from the reassessment of whether the Group will be reasonably
certain to exercise an extension or a termination option. When the
lease liability is remeasured, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of right-of-use asset has
been reduced to zero.
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low value assets (i.e. US$5,000 or
less) and short-term leases. Low value assets comprised IT
equipment and small items of office furniture. Short-term leases
are leases with a lease term of 12 months or less. Lease payments
associated with these leases are recognised on a straight-line
basis as an expense in profit and loss over the lease term.
Lease liabilities are classified as non-current liabilities
unless payments are within 12 months from the balance sheet
date.
(ii) As a lessor
The Group enters into contracts with lease components as a
lessor primarily on its investment properties. These leases are
operating leases as they do not transfer the risk and rewards
incidental to the underlying investment properties. The Group
recognises the lease payments received under these operating leases
on a straight line basis over the lease term as part of revenue in
the profit and loss.
(f) Critical accounting estimates and judgements
Leases
Liabilities and the corresponding right-of-use assets arising
from leases are initially measured at the present value of the
lease payments at the commencement date, discounted using the
interest rates implicit in the leases, or if that rate cannot be
readily determinable, the Group uses the incremental borrowing
rate. The Group generally uses the incremental borrowing rate as
the discount rate.
The Group applies the incremental borrowing rate with reference
to the rate of interest that the Group would have to pay to borrow,
over a similar term as that of the lease, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in the
country where it is located.
Lease payments to be made during the lease term will be included
in the measurement of a lease liability. The Group determines the
lease term as the non-cancellable term of the lease, together with
any periods covered by an option to extend the lease if it is
reasonably certain to be exercised, or any period covered by an
option to terminate the lease, if it is reasonably certain not to
be exercised.
The Group has the option, under some of its leases to lease the
assets for additional terms. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option
to renew. That is, the Group considers all relevant factors that
create an economic incentive for it to exercise the renewal. After
the commencement date, the Group reassesses the lease term if there
is a significant event or change in circumstances that is within
its control and affects its ability to exercise or not to exercise
the option to renew. The assessment of whether the Group is
reasonably certain to exercise the options impacts the lease terms,
which significantly affects the amount of lease liabilities and
right-of-use assets recognised.
2. Revenue
Gross revenue Revenue
2019 2018 2019 2018
US$m US$m US$m US$m
By business:
Jardine Matheson 29,728 22,775 - -
Hongkong Land 4,437 4, 642 2,320 2,665
Dairy Farm 27,665 21, 957 11,192 11,749
Mandarin Oriental 908 98 5 567 614
Jardine Cycle & Carriage 6,958 7 , 277 1,788 1,938
3 3 ,
Astra 33,887 072 16,803 17,133
Intersegment transactions
and other* (275) 1,640 (5) (5)
------------ ------------- ------------ ------------
103,308 92 , 348 32,665 34,094
------------ ------------- ------------ ------------
Gross revenue comprises revenue together with 100% of revenue
from Jardine Matheson, associates and joint ventures.
* 2018 included revenue of US$1,931 million related to Jardine
Lloyd Thompson, which was disposed of by Jardine Matheson during
2019.
3. Net Operating Costs
2019 2018
US$m US$m
Cost of sales (23,816) (25,039)
Other operating income 712 785
Selling and distribution costs (3,583) (3,725)
Administration expenses (2,109) (2,016)
(1 ,111
Other operating expenses (95) )
-------- --------
(28,891) (31,106)
-------- --------
Net operating costs included the following
gains/(losses) from non-trading items:
Change in fair value of other investments 75 (480)
Sale and closure of businesses - 179
Sale of property interests 16 28
Restructuring of businesses (15) (435)
Reclassification of joint ventures as
subsidiaries (14) (61)
Closure of a hotel (32) (27)
Other 9 (9)
39 (805)
-------- --------
4. Share of Results of Jardine Matheson
2019 2018
US$m US$m
By business:
Jardine Pacific 159 100
Jardine Motors 59 61
Jardine Lloyd Thompson - 25
Corporate and other interests 915 23
1,133 209
----- -----
Share of results of Jardine Matheson i
ncluded the following gains/(losses) from
non-trading items:
Change in fair value of investment properties 48 9
Change in fair value of other investments (2) 1
Sale of Jardine Lloyd Thompson 874 (12)
Sale and closure of other businesses 24 1
Sale of property interests - 3
Costs associated with a regulatory review - (10)
Merger-related costs - (9)
Other 2 -
946 (17)
----- -----
Results are shown after tax and non-controlling interests in
Jardine Matheson.
5. Share of Results of Associates and Joint Ventures
2019 2018
US$m US$m
By business:
Jardine Matheson 128 99
Hongkong Land 240 428
Dairy Farm 126 114
Mandarin Oriental (2) 6
Jardine Cycle & Carriage 128 1 27
Astra 494 479
Corporate and other interests (5) -
1,109 1,253
----- -----
Share of results of associates and joint
ventures included the following gains/(losses)
from non-trading items:
Change in fair value of investment properties (11) 189
Change in fair value of other investments (1) 1
Sale and closure of businesses 12 -
Other 1 -
1 190
----- -----
Results are shown after tax and non-controlling interests in the
associates and joint ventures.
6. Tax
2019 2018
US$m US$m
Tax charged to profit and loss is analy
s ed as follows:
Current tax (935) (872)
Deferred tax 15 (34)
----- -----
(920) (906)
----- -----
Greater China (298) (277)
( 641
Southeast Asia (607) )
United Kingdom (3) -
Rest of the world (12) 12
----- -----
( 906
(920) )
----- -----
Tax relating to components of other comprehensive
income is analy s ed as follows:
Remeasurements of defined benefit plans 4 -
Cash flow hedges 29 (13)
33 (13)
----- -----
Tax on profits has been calculated at rates of taxation
prevailing in the territories in which the Group operates.
Share of tax charge of Jardine Matheson of US$21 million (2018:
US$30 million) is included in share of results of Jardine Matheson.
Share of tax charge of US$2 million (2018: credit of US$5 million)
is included in other comprehensive income of Jardine Matheson.
Share of tax charge of associates and joint ventures of US$409
million (2018: US$483 million) is included in share of results of
associates and joint ventures. Share of tax credit of US$18 million
(2018: charge of US$6 million) is included in other comprehensive
income of associates and joint ventures .
7 . Profit attributable to Shareholders
2019 2018
US$m US$m
Operating segments:
Jardine Matheson 314 325
Hongkong Land 542 520
Dairy Farm 248 279
Mandarin Oriental 32 53
Jardine Cycle & Carriage 99 120
Astra 537 553
----- -----
1,772 1,850
Corporate and other interests (91) (121)
----- -----
Underlying profit attributable to shareholders* 1,681 1,729
Sale of Jardine Lloyd Thompson 874 (12)
(Decrease)/increase in fair value of investment
properties (447) 719
Other non-trading items 70 (609)
----- -----
Profit attributable to shareholders 2,178 1,827
----- -----
* Underlying profit attributable to shareholders is the measure
of profit adopted by the Group in accordance with IFRS 8
'Operating Segments'.
8. Earnings per Share
Basic earnings per share are calculated on profit attributable
to shareholders of US$2,178 million (2018: US$1,827 million) and on
the weighted average number of 564 million (2018: 569 million)
shares in issue during the year.
Diluted earnings per share are calculated on profit attributable
to shareholders of US$2,177 million (2018: US$1,827 million), which
is after adjusting for the effects of the conversion of dilutive
potential ordinary shares of Jardine Matheson, subsidiaries,
associates or joint ventures, and on the weighted average number of
564 million (2018: 569 million) shares in issue during the
year.
The weighted average number of shares is arrived at as
follows:
Ordinary shares
in millions
2019 2018
Weighted average number of shares in issue 1,108 1,108
Company's share of shares held by Jardine
Matheson (544) (539)
---------------- ---------------
Weighted average number of shares for
earnings per share calculation 564 569
---------------- ---------------
Additional basic and diluted earnings per share are also
calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
2019 2018
Basic Diluted Basic Diluted
earnings earnings earnings earnings
per share per share per share per share
US$m US$ US$ US$m US$ US$
Profit attributable
to shareholders 2,178 3.86 3.86 1,827 3.21 3.21
Non-trading items (note
9) (497) (98)
----- -----
Underlying profit
attributable
to shareholders 1,681 2.98 2.98 1,729 3.04 3.04
----- -----
9. Non-trading items
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains or losses
on revaluation of investment properties and equity investments
which are measured at fair value through profit and loss ; gains
and losses arising from the sale of businesses, investments and
properties; impairment of non-depreciable intangible assets and
other investments; provisions for the closure of businesses;
acquisition-related costs in business combinations; and other
credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying
business performance.
2019 2018
US$m US$m
By business:
Jardine Matheson 947 (17)
Hongkong Land (443) 715
Dairy Farm 2 (212)
Mandarin Oriental (76) (17)
Jardine Cycle & Carriage 11 (333)
Astra 3 4
Corporate and other interests 53 (42)
497 98
----- -----
An analysis of non-trading items after
interest, tax and non-controlling interests
is set out below:
Change in fair value of investment properties
----- -----
- Hongkong Land (460) 705
- other 13 14
(447) 719
Change in fair value of other investments 61 (377)
Sale of Jardine Lloyd Thompson 874 (12)
Sale and closure of other businesses 33 139
Sale of property interests 12 25
Restructuring of businesses (10) (326)
Reclassification of joint ventures as
subsidiaries (11) (48)
Closure of a hotel (22) (21)
Tax refund on disposal of other investments
in prior year - 19
Costs associated with a regulatory review - (10)
Merger-related costs - (9)
Other 7 (1)
497 98
----- -----
The sale of Jardine Matheson's entire 41% interest in Jardine
Lloyd Thompson was completed in April 2019 with net proceeds of
US$2.1 billion generating a profit on sale of US$0.9 billion to the
Group.
Restructuring of businesses in 2018 related to Dairy Farm's
restructuring of its Southeast Asia Grocery Retail business
following the completion of a strategic review. The charges
comprised impairment charges of the carrying values of certain
goodwill, tangible assets and right-of-use assets, as well as
provisions for payments to tenants and employees.
Sale and closure of other businesses in 2018 included a gain of
US$132 million related to the disposal of a subsidiary in the
Philippines by Dairy Farm under a partnership arrangement with
Robinsons Retail Holdings, Inc. ('Robinsons Retail'), a
multi-format retailer listed on the Philippine Stock Exchange.
10. Dividends
2019 2018
US$m US$m
Final dividend in respect of 2018 of USc24.00
(2017: USc22.50) per share 266 249
Interim dividend in respect of 2019 of
USc10 .50
(2018: USc10.00) per share 116 111
----- -----
382 360
Company's share of dividends paid on the
shares held by Jardine Matheson (187) (175)
----- -----
195 185
----- -----
A final dividend in respect of 2019 of USc25.00 (2018: USc24.00)
per share amounting to a total of US$277 million (2018: US$266
million) is proposed by the Board. The dividend proposed will not
be accounted for until it has been approved at the 2020 Annual
General Meeting. The net amount after deducting the Company's share
of the dividends payable on the shares held by Jardine Matheson of
US$137 million (2018: US$130 million) will be accounted for as an
appropriation of revenue reserves in the year ending 31st December
2020.
11. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
2019 2018
Fair Fair
value value
US$m US$m
Non-current assets 3 1,310
Current assets 72 143
Non-current liabilities (8) (352)
Current liabilities (3) (173)
------ ------
Fair value of identifiable net assets
acquired 64 928
Goodwill 4 271
Adjustment for non-controlling interests (14) (57)
------ ------
Total consideration 54 1,142
Adjustment for contingent consideration (10) -
Net debt repaid at date of acquisition - 148
Payment for deferred consideration - 82
Adjustment for deferred consideration - (24)
Carrying value of associates and joint
ventures (15) (44)
Cash and cash equivalents of subsidiaries
acquired (1) (18)
------ ------
Net cash outflow 28 1,286
------ ------
For the subsidiaries acquired during 2019, the fair values of
the identifiable assets and liabilities at the acquisition dates
are provisional and will be finalised within one year after the
acquisition dates.
The fair values of the identifiable assets and liabilities at
the acquisition dates of certain subsidiaries
acquired during 2018 were finalised in 2019 and the comparative figures have been adjusted.
Net cash outflow for purchase of subsidiaries in 2018 included
US$55 million for Dairy Farm's acquisition of an additional 51%
interest in Rose Pharmacy, a health and beauty stores chain in the
Philippines, increasing its controlling interest to 100%; and
US$1,150 million (including repayment of net debt of US$148
million) for Astra's acquisition of a 95% interest in PT Agincourt
Resources, a gold mining company. In addition, there were cash
outflows of US$69 million and US$13 million for Astra's payment of
deferred consideration for investments in toll road concessions and
acquisition of an 80% interest in PT Suprabari Mapanindo Mineral, a
coal mining company, respectively, in 2017.
Goodwill in 2018 mainly arose from the acquisitions of Rose
Pharmacy of US$99 million, attributable to the leading market
position and retail network in the Philippines; and PT Agincourt
Resources of US$171 million, attributable to the requirement to
recognise deferred tax on the difference between the fair value and
the tax value of the assets at the date of acquisition. None of the
goodwill is expected to be deductible for tax purposes.
(b) Purchase of associates and joint ventures in 2019 mainly
included US$553 million for Hongkong Land's investments primarily
in the Chinese mainland; US$168 million for Jardine Cycle &
Carriage's additional interest in Truong Hai Auto Corporation;
US$208 million and US$42 million for Astra's investments in toll
road concessions and capital injections into its associates and
joint ventures, respectively; and US$64 million for the Company's
20% interest in livi, a virtual bank in Hong Kong .
Purchase in 2018 mainly included US$834 million for Hongkong
Land's investments in the Chinese mainland, Thailand and Vietnam;
US$220 million related to Dairy Farm's acquisition of a 20%
interest in Robinsons Retail ; and US$99 million for Astra's
investments in toll road concessions .
(c) Purchase of other investments in 2019 included Astra's
additional investments in Gojek and other securities
of US$100 million and US$299 million, respectively .
Purchases in 2018 included US$200 million and US$62 million for
Jardine Cycle & Carriage's investments in shares in Toyota
Motor Corporation and additional shares in Vietnam Dairy Products
increasing its interest to 10.6%, respectively; and US$150 million
and US$280 million for Astra's investments in Gojek and other
securities, respectively.
(d ) Advance to associates and joint ventures in 2019 and 2018
mainly included Hongkong Land's advance to its property joint
ventures.
(e) Advance from and repayment from associates and joint
ventures in 2019 and 2018 mainly included advance from and
repayment from Hongkong Land's property joint ventures.
(f) Sale of other investments in 2019 comprised US$158 million
in Hongkong Land and US$276 million in Astra.
Sale in 2018 mainly included Astra's sale of securities.
(g) Change in interests in subsidiaries
2019 2018
US$m US$m
Increase in attributable interests
- Hongkong Land - (131)
- Mandarin Oriental (5) (33)
- other (10) (200)
Decrease in attributable interests - 4
----- -----
(15) (360)
----- -----
Increase in attributable interests in other subsidiaries in 2018
included US$196 million for Astra's acquisition of the remaining
25% interest in Astra Sedaya Finance, a consumer financing company,
from Permata Bank,
increasing its controlling interest to 100%.
1 2 . Jardine Strategic Corporate Cash Flow
2019 2018
US$m US$m
Dividends receivable
----- -----
Subsidiaries 767 740
Jardine Matheson 734 682
Associates and joint ventures 34 34
Other holdings 13 13
1,548 1,469
Less taken in scrip - (502)
----- -----
1,548 967
Other operating cash flows (108) (116)
----- -----
Cash flows from operating activities 1,440 851
Investing activities
----- -----
Purchase of shares in Jardine Matheson - (99)
Purchase of an associate (64) -
Purchase of other investments (7) (13)
Cash flows from investing activities (71) (112)
Financing activities
----- -----
Purchase of additional shares in subsidiaries (5) (33)
Dividends paid by the Company (376) (351)
Cash flows from financing activities (381) (384)
Net increase in cash 988 355
Cash at 1st January 774 419
----- -----
Cash at 31st December 1,762 774
----- -----
Represented by:
Bank balances and other liquid funds 1,762 774
----- -----
Corporate cash flow comprises the cash flows of the Company and
of its investment holding and financing subsidiaries.
13. Capital Commitments and Contingent Liabilities
Total capital commitments at 31st December 2019 amounted to
US$2,878 million (2018: US$3,064 million).
In February 2020, Hongkong Land secured a prime, predominantly
commercial site in the Xuhui District of Shanghai for a
consideration of RMB31 billion (equivalent to approximately US$4.4
billion). The project mainly comprises office and retail space with
a developable area of 1.1 million square metres, and will be
developed in multiple phases to 2027.
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. Related Party Transactions
In accordance with the Bye-Laws of the Company, Jardine Matheson
Limited, a wholly-owned subsidiary of Jardine Matheson, has been
appointed General Manager of the Company under a General Manager
Agreement. With effect from 1st January 2008, Jardine Matheson
Limited has sub-delegated certain of its responsibilities under the
agreement to a fellow subsidiary. Total fees payable for services
provided to the Company in 2019 amounted to US$130 million (2018:
US$1 41 million) .
In the normal course of business the Group undertakes a variety
of transactions with Jardine Matheson, and with certain of its
associates and joint ventures.
The most significant of such transactions relate to the
purchases of motor vehicles and spare parts from its associates and
joint ventures in Indonesia including PT Toyota-Astra Motor, PT
Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of motor
vehicles and spare parts purchased in 2019 amounted to US$5,446
million (2018: US$5,449 million) . The Group also sells motor
vehicles and spare parts to its associates and joint ventures in
Indonesia including PT Astra Honda Motor, PT Astra Daihatsu Motor
and PT Tunas Ridean. Total revenue from sale of motor vehicles and
spare parts in 2019 amounted to US$664 million (2018: US$637
million).
Permata Bank provides banking services to the Group. The Group's
deposits with Permata Bank at 31st December
2019 amounted to US$437 million (2018: US$345 million) .
There were no other related party transactions that might be
considered to have a material effect on the financial position or
performance of the Group that were entered into or changed during
the year.
Amounts of outstanding balances with Jardine Matheson,
associates and joint ventures are included in debtors and
creditors, as appropriate. A subsidiary of the Company has also
committed to provide loan facilities to a subsidiary of Jardine
Matheson. Undrawn facilities at 31st December 2019 amounted to
US$400 million (2018: US$400 million).
1 5 . Market Value Basis Net Assets
2019 2018
US$m US$m
Jardine Matheson 8,973 10,948
Hongkong Land 6,765 7,413
Dairy Farm 5,993 9,499
Mandarin Oriental 1,799 2,012
Jardine Cycle & Carriage 6,622 7,671
Other holdings 610 486
------ ------
30,762 38,029
Jardine Strategic Corporate 1,733 734
------ ------
32,495 38,763
------ ------
US$ US$
Net asset value per share 57.98 68.46
------ ------
'Market value basis net assets' are calculated based on the
market price of the Company's holdings for listed companies, with
the exception of the holding in Jardine Matheson which has been
calculated by reference to the market value of US$23,738 million
(2018: US$29,706 million) less the Company's share of the market
value of Jardine Matheson's interest in the Company. For unlisted
companies a Directors' valuation has been used.
Net asset value per share is calculated on 'market value basis
net assets' of US$32,495 million (2018: US$ 38,763 million) and on
561 million (2018: 566 million) shares outstanding at the year end
which excludes the Company's share of the shares held by Jardine
Matheson of 548 million (2018: 542 million) shares.
Jardine Strategic Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The process by which the Group identifies and
manages risk will be set out in more detail in the Corporate
Governance section of the Company's 2019 Annual Report (the
'Report'). The following are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the
Disclosure Guidance and Transparency Rules issued by the Financial
Conduct Authority of the United Kingdom and are in addition to the
matters referred to in the Chairman's Statement, Managing
Director's Review and other parts of the Report.
Economic Risk
Most of the Group's businesses are exposed to the risk of
negative developments in global and regional economies and
financial markets, either directly or through the impact such
developments might have on the Group's joint venture partners,
associates, franchisors, bankers, suppliers or customers. These
developments could include recession, inflation, deflation,
currency fluctuations, restrictions in the availability of credit,
business failures, or increases in financing costs, oil prices or
the cost of raw materials. Such developments might increase
operating costs, reduce revenues, lower asset values or result in
some or all of the Group's businesses being unable to meet their
strategic objectives.
Commercial Risk and Financial Risk
Risks are an integral part of normal commercial activities, and
where practicable steps are taken to mitigate them. Risks can be
more pronounced when businesses are operating in volatile
markets.
A number of the Group's businesses make significant investment
decisions in respect of developments or projects and these are
subject to market risks. This is especially the case where projects
are longer-term in nature and take more time to deliver
returns.
The Group's businesses operate in sectors and regions which are
highly competitive and evolving rapidly, and failure to compete
effectively, whether in terms of price, tender terms, product
specification, application of new technologies or levels of
service, can have an adverse effect on earnings or market share.
Significant competitive pressure may also lead to reduced
margins.
It is essential for the products and services provided by the
Group's businesses to meet appropriate quality and safety standards
and there is an associated risk if they do not, including the risk
of damage to brand equity or reputation, which might adversely
impact the ability to achieve acceptable revenues and profit
margins.
The potential impact on many of our businesses of disruption to
IT systems or infrastructure, whether as a result of cyber-crime or
other factors, could be significant. There is also an increasing
risk to our businesses from adverse social media commentary, which
could influence customer and other stakeholder behaviours and
impact operations or profitability, or lead to reputational
damage.
The steps taken by the Group to manage its exposure to financial
risk will be set out in the Financial Review and in a note to the
Financial Statements in the Report.
Concessions, Franchises and Key Contracts
A number of the Group's businesses and projects are reliant on
concessions, franchises, management, outsourcing or other key
contracts. Cancellation, expiry or termination, or the
renegotiation of any such concession, franchise, management,
outsourcing or other key contracts, could have an adverse effect on
the financial condition and results of operations of certain
subsidiaries, associates and joint ventures of the Group.
Regulatory and Political Risk
The Group's businesses are subject to a number of regulatory
regimes in the territories in which they operate. Changes in such
regimes, in relation to matters such as foreign ownership of assets
and businesses, exchange controls, planning controls, emission
regulations, tax rules and employment legislation, could have the
potential to impact the operations and profitability of the Group's
businesses.
Changes in the political environment, including political or
social unrest, in the territories where the Group operates could
adversely affect the Group's businesses.
Terrorism, Pandemic and Natural Disasters
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 effect on the Group's
businesses of generally reduced economic activity in response to
the threat, or an actual act, of terrorism.
The Group businesses could be impacted by a global or regional
pandemic which seriously affects economic activity or the ability
of businesses to operate smoothly. In addition, many of the
territories in which the Group operates can experience from time to
time natural disasters such as earthquakes and typhoons.
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
(a) the consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations
adopted by the International Accounting Standards Board; and
(b) the sections of the Company's 2019 Annual Report, including
the Chairman's Statement and Managing Director's Review and the
Principal Risks and Uncertainties, which constitute the management
report, include a fair review of all information required to be
disclosed by the Disclosure Guidance and Transparency Rules 4.1.8
to 4.1.11 issued by the Financial Conduct Authority of the United
Kingdom.
For and on behalf of the Board
Ben Keswick
Y.K. Pang
Directors
The final dividend of USc25.0 per share will be payable on
13th May 2020, subject to approval at the Annual General Meeting
to be held on 7th May 2020, to shareholders on the register
of members at the close of business on 20th March 2020. The
shares will be quoted ex-dividend on 19th March 2020 and the
share registers will be closed from 23rd to 27th March 2020,
inclusive. The dividend will be available in cash with a scrip
alternative.
Shareholders will receive their cash dividends in United States
Dollars, unless they are registered on the Jersey branch register,
in which case they will have the option to elect for their
dividends to be paid in Sterling. These shareholders may make
new currency elections for the 2019 final dividend by notifying
the United Kingdom transfer agent in writing by 24th April
2020. The Sterling equivalent of dividends declared in United
States Dollars will be calculated by reference to a rate prevailing
on 29th April 2020.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in Sterling only
as calculated above. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore will
receive their cash dividends in United States Dollars unless
they elect, through CDP, to receive Singapore Dollars.
Shareholders on the Singapore branch register who wish to deposit
their shares into the CDP system by the dividend record date,
being 20th March 2020, must submit the relevant documents to
M & C Services Private Limited, the Singapore branch registrar,
no later than 5.00 p.m. (local time) on 19th March 2020.
Jardine Strategic
Jardine Strategic is a holding company which makes long-term
strategic investments in multinational businesses, particularly
those with an Asian focus, and in other high quality companies with
existing or potential links with the Group. Its principal
attributable interests are in Jardine Matheson (58%), Hongkong Land
(50%), Dairy Farm (78%), Mandarin Oriental (78%) and Jardine Cycle
& Carriage (75%), which in turn has a 50% interest in Astra. It
also has minority interests in Greatview Aseptic Packaging and
Zhongsheng. Jardine Strategic is 85% held by Jardine Matheson.
The Group companies operate in the fields of motor vehicles and
related operations, property investment and development, food
retailing, health and beauty, home furnishings, engineering and
construction, transport services, restaurants, luxury hotels,
financial services, heavy equipment, mining, energy and
agribusiness.
Jardine Strategic Holdings Limited is incorporated in Bermuda
and has a standard listing on the London Stock Exchange, with
secondary listings in Bermuda and Singapore. The Company's
interests are managed from Hong Kong by Jardine Matheson
Limited.
- end -
For further information, please contact:
Jardine Matheson Limited
John Witt (852) 2843 8278
Brunswick Group Limited
David Ashton (852) 3512 5063
Full text of the Preliminary Announcement of Results and the
Preliminary Financial Statements for the year ended 31st December
2019 can be accessed through the internet at www.jardines.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR JAMRTMTMMMJM
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