7th Mar 2008 09:05
Jardine Matheson Hldgs Ld07 March 2008 To: Business Editor 7th March 2008 For immediate release The following announcement was issued today to a Regulatory Information Serviceapproved by the Financial Services Authority in the United Kingdom. Jardine Matheson Holdings Limited2007 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. Wetherefore face the future with considerable optimism." Henry Keswick, Chairman7th 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 +17Underlying profit attributable to shareholders + 719 530 +36Profit attributable to shareholders 1,828 1,348 +36Shareholders' funds 8,490 6,594 +29-------------------------------------------------------------------------------- US$ US$ %--------------------------------------------------------------------------------Underlying earnings per share + 2.03 1.51 +34Earnings per share 5.16 3.83 +35Dividends 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 20thMarch 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 beclosed from 24th to 28th March 2008, inclusive. Jardine Matheson Holdings Limited Preliminary Announcement of ResultsFor The Year Ended 31st December 2007 PerformanceThe 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 whilemaintaining active development programmes. Consolidated net debt excludingfinancial services companies was reduced by 55% to US$618 million, and this,together with further significant rises in property values, led to the Group'sgearing falling from 12% to 5%. The property revaluations, coupled with othernon-trading items, contributed to producing a profit attributable toshareholders of US$1,828 million. Shareholders' funds were 29% higher at US$8.5billion. 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 ActivityBusiness 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 SoutheastAsia 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 goodlevels of income over the next three years. In addition, the recognition ofprofits from residential projects will enhance earnings as these developmentsachieve 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 businessinterests and enhancing earnings and net asset value per share. In total, some US$130 million was invested through these tenders. OutlookIn 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 in2008, but our businesses have strong balance sheets and are well placed torespond to whatever conditions the year brings. We therefore face the futurewith 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 majoroperations performing well. At Mandarin Oriental, favourable markets, new hotelsand a full year's contribution from its major Hong Kong property afterrenovation led to a significant increase in profit. Jardine Cycle & Carriagebenefited from a strong return to earnings growth by Astra. Of JardineMatheson's equity-accounted associates, Hongkong Land reported an impressiveincrease in profit from both its commercial and its residential businesses.Jardine Lloyd Thompson did well to achieve an improved performance in adifficult trading environment, and its contribution to the Group rose furtheron translation from sterling into US dollars. The Group's results alsobenefited 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 ReportingStandards, such revaluations are taken through the profit and loss account. Theprofit attributable to shareholders of US$1,828 million incorporates theserevaluations together with other non-trading items, including gains ondisposals of shares in The Bank of N.T. Butterfield & Son and Edaran OtomobilNasional together with profits arising on the restructuring of Jardine LloydThompson's French associate. This figure compares with US$1,348 million in2006. During the year the Company increased its interest in Jardine Strategic to 81% by a combination of a tender offer, market purchases and scrip dividendsinvolving the acquisition of some 20 million shares. The Company alsorepurchased and cancelled some 515,000 of its own shares through a tender offerand 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 PacificJardine Pacific produced an underlying profit from continuing businesses of US$115 million in 2007, up 15%, with good performances from most of itsoperations. The revaluation of the group's residential property investmentportfolio produced a non-trading gain of US$70 million which together withgains on disposals led to a profit attributable to shareholders of US$213million, an increase of 12%. Shareholders' funds were US$475 million at the endof 2007, giving an underlying return of 28% on average shareholders' funds. Financial information for Jardine Pacific's individual businesses is summarizedbelow: Underlying profit Shareholders' funds 2007 2006 2007 2006 US$m US$m US$m US$m ------ ------ ------ ------Gammon 16 14 64 49HACTL 33 33 99 100Jardine Aviation Services 8 9 18 22JEC 12 12 35 26JOS 14 11 30 19Jardine Property Investment 3 3 260 187Jardine Restaurants 17 14 12 8Jardine Schindler 18 12 40 29Jardine Shipping Services 5 4 16 15Corporate and other interests (11) (12) (98) (101)-------------------------------------------------------------------------Continuing businesses 115 100 476 354Discontinued 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$33million due to increased operating costs. Despite higher flight frequencies,JARDINE AVIATION SERVICES was affected by lower fees which led to a reducedcontribution of US$8 million. Jardine Shipping Services benefited from betterfreight rates and increased volume producing an improved underlying profit ofUS$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 VenetianHotel 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 SARGovernment, which is expected to be completed in 2011. JARDINE SCHINDLERperformed strongly on new installations and produced further growth from itsexisting maintenance portfolio, which led to an improved contribution of US$18million. JEC recorded an underlying profit of US$12 million with goodperformances 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. JOSproduced a higher underlying profit of US$14 million following a 12% increase insales. RoomPlus, a self-storage business in Hong Kong, recorded a smalloperating loss, although occupancy at its facility continued to improve. InJune 2007, Jardine Pacific sold its 50% interest in Colliers Halifax in Japanto Hongkong Land. Jardine MotorsJardine Motors did well to achieve an underlying profit from continuingbusinesses in 2007 of US$63 million, equaling that of 2006 which had benefitedfrom 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 vehiclebusiness suffered from lower fleet sales and its Hyundai passenger car franchiserecorded a small loss. In Macau, its Mercedes-Benz operation had another goodyear with strong new car deliveries. Zung Fu's Mercedes-Benz dealerships in Southern China continued their profitablegrowth with new car deliveries increasing significantly in 2007 to over 4,000units. The aftersales business also achieved higher volumes. Further plannedexpansion of this dealership network will bring the number of outlets to 17 in2008. 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 dealershipgroup. The underlying profit contribution, however, was lower than in 2006 dueto the absence of a one-off pension credit and lower property disposal gains. Jardine Lloyd ThompsonJardine 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 andimpairments rose 6% to US$125 million reflecting the higher turnover andimproved operational efficiencies. The group's profit attributable toshareholders of US$145 million included a gain of US$58 million arising on themerger 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 beendriven by legal, regulatory and tax changes. Hongkong LandHongkong 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 thecity-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 FarmDairy 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 netdebt of just US$83 million. Dairy Farm continued to expand its retail formats within selected territories inAsia, ending the year with 4,191 outlets. The group, however, decided towithdraw from its small health and beauty ventures in Korea and Thailand thathad 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 to440, 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 largestore openings in 2006. Hong Kong restaurant associate, Maxim's, made furtherprogress in sales and profit with the introduction of innovative products inits fast food operations and good performances from its restaurants and cakesactivities. 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 firstthree 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 OrientalFavourable 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 2006when 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 18hotels under development, all will be managed on behalf of third-party ownerswith the exception of Paris, which is on a long-term lease. Ten of the projectsalso incorporate a 'Residences at Mandarin Oriental' component, in addition tothe residences being built next to the group's existing hotel in London. Jardine Cycle & CarriageJardine 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 automotivebusinesses. The contribution to underlying profit from Jardine Cycle &Carriage's other motor activities increased by 34% to US$43 million as itsoperations 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, anda reduction to 15% of its shareholding in a Singapore consumer finance company. These disposals raised US$36 million and helped to strengthen its parent companybalance sheet, which at the end of the year showed net debt of just US$31million. AstraAstra 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 by6% in the same period, but in the face of intense competition sales at AstraHonda Motor were 9% lower at 2.1 million units representing a reduced marketshare of 46%. New model launches and a repositioned strategy helped to underpinthe market position, while improvements in margins and a more stable retailshare enabled Astra to achieve overall earnings growth from the sector. Thecontribution from Astra Otoparts was well ahead of 2006 as its automotivecomponent 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 weatherconditions at the start of the year, a 69% increase achieved in crude palm oilprices 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 overcameadverse weather and operational interruptions to achieve a 28% increase in coalextracted and a 4% increase in overburden removed. A coal mining concession inSouth Kalimantan was acquired in January 2007, and an effective 70% stake in afurther mine in Central Kalimantan was purchased in February 2008. Astra's information technology activities and infrastructure investmentsperformed satisfactorily in 2007, and the group is continuing to review furtherinfrastructure investments. Further Interests Rothschilds ContinuationThe 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 IndustriesTata Industries is an unlisted Indian investment company in which JardineStrategic holds a 20% shareholding. Following the sale of a strategic stake ina cellular telephone operator in 2006, part of the proceeds was used to reducedebt and pay a dividend. In 2007, Tata Industries made commitments to newprojects in a number of existing investee companies and identified further newinvestment opportunities. Tata Industries continues to review a range of newprojects across a broad band of industry sectors. OthersEdaran Otomobil Nasional, in which the Group held a 20% interest, continued to struggle in 2007 as the Malaysian motor vehicle sector remained difficult forthe third consecutive year. It faced weak demand for Proton cars and, whilesome progress was made in reducing overheads, the National Automotive Policyintroduced in 2006 made it hard to reposition the business. In August 2007,Jardine Strategic accepted an offer for its entire shareholding made by anothermajor investor, DRB-HICOM, which gave rise to a gain of US$19 million oncompletion 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$46 million, and leaving a remaining shareholding of 3.8%. Anthony NightingaleManaging Director7th March 2008 ----------------------------------------------------------------------------------------------------------------Jardine Matheson Holdings LimitedConsolidated Profit and Loss Accountfor the year ended 31st December 2007---------------------------------------------------------------------------------------------------------------- 2007 2006 --------------------------------------- --------------------------------------- Underlying Non- Underlying Non- business trading business trading performance items Total performance items Total US$m US$m US$m US$m US$m US$m --------------------------------------- --------------------------------------- --------- --------- Revenue (note 2) 19,445 - 19,445 16,281 - 16,281Net operating costs (note 3) (17,916) 252 (17,664) (15,290) 324 (14,966) --------- --------- --------- --------- --------- ---------Operating profit (note 4) 1,529 252 1,781 991 324 1,315 --------- --------- --------- --------- --------- ---------Financing charges (219) - (219) (234) - (234)Financing income 121 - 121 104 - 104 --------- --------- --------- --------- --------- ---------Net financing charges (98) - (98) (130) - (130)Share of results of associates and joint ventures (note 5) 542 1,114 1,656 439 748 1,187 --------- --------- --------- --------- --------- ---------Profit before tax 1,973 1,366 3,339 1,300 1,072 2,372Tax (note 6) (415) (40) (455) (254) (64) (318) --------- --------- --------- --------- --------- ---------Profit after tax 1,558 1,326 2,884 1,046 1,008 2,054 ------------------------------------- -------------------------------------Attributable to:Shareholders of the Company 719 1,109 1,828 530 818 1,348Minority interests 839 217 1,056 516 190 706 --------- --------- --------- --------- --------- --------- 1,558 1,326 2,884 1,046 1,008 2,054 ------------------------------------- ------------------------------------- US$ 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 LimitedConsolidated Balance Sheetat 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m -------- ---------Assets Intangible assets 1,883 1,825Tangible assets 3,149 2,931Investment properties 355 271Plantations 515 460Associates and joint ventures 7,964 6,476Other investments 728 592Non-current debtors 1,002 1,150Deferred tax assets 114 119Pension assets 215 174 -------- ---------Non-current assets 15,925 13,998 -------- --------- Stocks and work in progress 1,610 1,478Current debtors 2,322 2,170Current investments 21 2Current tax assets 154 142Bank balances and other liquid funds -------- ---------- non-financial services companies 1,966 2,355- financial services companies 167 173 -------- --------- 2,133 2,528 -------- --------- 6,240 6,320Non-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 154Share premium and capital reserves 25 29Revenue and other reserves 9,266 7,303Own shares held (956) (892) -------- ---------Shareholders' funds (note 10) 8,490 6,594Minority 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 2,882Deferred tax liabilities 599 557Pension liabilities 126 151Non-current creditors 67 103Non-current provisions 42 34 -------- ---------Non-current liabilities 3,487 3,727 -------- --------- Current creditors 3,375 2,850Current borrowings -------- ---------- non-financial services companies 547 1,573- financial services companies 806 954 -------- --------- 1,353 2,527Current tax liabilities 230 101Current provisions 68 70 -------- --------- 5,026 5,548Liabilities 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 LimitedConsolidated Statement of Recognized Income and Expensefor the year ended 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m --------------------Surpluses on revaluation of properties 114 120Gains on revaluation of other investments 176 294Actuarial gains on defined benefit pension plans 86 40Net exchange translation differences (87) 393Losses on cash flow hedges (8) (13)Tax on items taken directly to equity (26) (71) -------- ---------Net income recognized directly in equity 255 763Transfer 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 4Profit 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 1,681Minority interests 1,012 1,058 -------- --------- 3,075 2,739 -------- --------- -------------------- --------------------------------------------------------------------------------Jardine Matheson Holdings LimitedConsolidated Cash Flow Statementfor the year ended 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m --------------------Operating activities -------- --------Operating profit 1,781 1,315Depreciation and amortization 479 403Other non-cash items (51) (140)Decrease in working capital 77 472Interest received 116 97Interest and other financing charges paid (214) (212)Tax paid (295) (370) -------- -------- 1,893 1,565Dividends 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 1Sale of subsidiary undertakings (note 12(d)) 6 231Sale of associates and joint ventures (note 12(e)) 127 100Sale of other investments (note 12(f)) 127 480Sale of land use rights 14 26Sale of tangible assets 56 75Sale of investment properties 7 - -------- --------Cash flows from investing activities (736) (390) Financing activities -------- --------Issue of shares 1 3Repurchase of shares (13) -Capital contribution from minority shareholders 5 13Drawdown of borrowings 8,075 7,599Repayment 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) 807Cash and cash equivalents at 1st January 2,491 1,684 -------- --------Cash and cash equivalents at 31st December 2,082 2,491 -------- -------- -------------------- --------------------------------------------------------------------------------Jardine Matheson Holdings LimitedAnalysis of Profit Contributionfor the year ended 31st December 2007-------------------------------------------------------------------------------- 2007 2006 US$m US$m --------------------Group contribution Jardine Pacific 115 103Jardine Motors Group 63 67Jardine Lloyd Thompson 33 28Hongkong Land 131 85Dairy Farm 161 131Mandarin Oriental 47 27Jardine Cycle & Carriage 22 16Astra 178 98Corporate and other interests (31) (25) -------- --------Underlying profit 719 530Increase in fair value of investment properties 1,015 671Other non-trading items 94 147 -------- --------Profit attributable to shareholders 1,828 1,348 -------- --------Analysis of Jardine Pacific's contribution Gammon 16 14HACTL 33 33Jardine Aviation Services 8 9JEC 12 12JOS 14 11Jardine Property Investment 3 3Jardine Restaurants 17 14Jardine Schindler 18 12Jardine Shipping Services 5 4Corporate and other interests (11) (12) -------- --------Continuing businesses 115 100Discontinued businesses - 3 -------- -------- 115 103 -------- --------Analysis of Jardine Motors Group's contribution Hong Kong and Mainland China 41 36United Kingdom 23 29Corporate (1) (2) -------- --------Continuing businesses 63 63Discontinued businesses - 4 -------- -------- 63 67 -------- -------- -------------------- --------------------------------------------------------------------------------Jardine Matheson Holdings LimitedNotes-------------------------------------------------------------------------------- 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: DisclosuresAmendment to IAS 1 Capital DisclosuresIFRIC 8 Scope of IFRS 2IFRIC 9 Reassessment of Embedded DerivativesIFRIC 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 1,082Jardine Motors Group 2,911 2,352Dairy Farm 5,887 5,175Mandarin Oriental 529 405Jardine Cycle & Carriage 1,239 1,119Astra 7,673 6,143Other 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 543Selling 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 142Jardine Motors Group 124 133Dairy Farm 276 233Mandarin Oriental 133 122Jardine Cycle & Carriage 38 55Astra 1,034 570 ------- ------- 1,768 1,255Corporate and other interests 28 60Intersegment 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 91Increase in fair value of plantations 35 22Sale and closure of businesses 28 127Sale of investments 70 80Sale of property interests - 10Restructuring 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 80Jardine Motors Group - 3Jardine Lloyd Thompson 45 27Hongkong Land 1,342 856Dairy Farm 30 28Mandarin Oriental 23 13Jardine Cycle & Carriage 9 3Astra 116 151Corporate 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 752Asset impairment (72) -Sale and closure of businesses (9) (13)Sale of investments 1 4Sale of property interests 6 -Pension curtailment - 13Restructuring 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$1,324 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiary undertakings, associates or joint ventures, and on the weighted average number of 355 million (2006: 353 million) shares in issue during the year. The weighted average number of shares is arrived at as follows: Ordinary shares in millions 2007 2006 ----------------------Weighted average number of shares in issue 619 611Shares held by the Trustee under the Senior Executive Share Incentive Schemes (2) (2)Company's share of shares held by subsidiary undertakings (263) (257) ------- -------Weighted average number of shares for basic earnings per share calculation 354 352Adjustment for shares deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes 1 1 ------- ------- Weighted average number of shares for diluted earnings per share calculation 355 353 ------- ------- Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below: 2007 2006 Basic Diluted Basic Diluted earnings earnings earnings earnings per share per share per share per share US$m US$ US$ US$m US$ US$ --------------------------------------------------------------------------Profit attributable to shareholders 1,828 5.16 5.03 1,348 3.83 3.75Non-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 671Increase in fair value of plantations 5 3Asset 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 59Sale of investments 55 83Sale of property interests 5 2Pension curtailment - 13Restructuring 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 4Investment properties 2 2Associates and joint ventures 7 14Non-current debtors - 31Current 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$m ------------------- At 1st January 6,594 4,998Recognized income and expense attributable to shareholders 2,063 1,681Dividends (note 11) (212) (160)Employee share option schemes- value of employee services 9 8- exercise of share options 1 3Scrip issued in lieu of dividends 112 175Repurchase of shares (13) - Increase in own shares held (64) (111) ------- -------At 31st December 8,490 6,594 ------- ------- 11. Dividends 2007 2006 US$m US$m ------------------- Final dividend in respect of 2006 of USc40.00 246 216 (2005: USc35.65) per shareInterim dividend in respect of 2007 of USc20.00 123 61 (2006: USc10.00) per share ------- ------- 369 277Company'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 shareamounting to a total of US$279 million (2006: US$246 million) is proposed bythe Board. The dividend proposed will not be accounted for until it has beenapproved at the Annual General Meeting. The net amount after deducting theCompany's share of the dividends payable on the shares held by subsidiaryundertakings of US$120 million (2006: US$104 million) will be accounted for asan appropriation of revenue reserves in the year ending 31st December 2008. 12. Notes to Consolidated Cash Flow Statement 2007 2006(a) Purchase of subsidiary undertakings US$m US$m -------------------Intangible assets 2 6Tangible assets 3 15Non-current debtors 1 -Current assets 31 18Deferred tax liabilities - (1)Pension liabilities (1) (1)Other non-current liabilities (1) -Current liabilities (21) (9)Minority interests 1 - ------- -------Net assets acquired 15 28Goodwill 13 12 ------- ------- Total consideration 28 40Adjustment 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 33Purchase 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 JardineMotors Group's acquisition of dealerships in the United Kingdom. Net cashoutflow in 2006 of US$33 million included US$6 million for Jardine MotorsGroup's acquisition of dealerships in the United Kingdom, and US$17 million forDairy Farm's store acquisitions in Malaysia and Vietnam. (b) Purchase of associates and joint ventures in 2007 included JardineStrategic's increased interest in Hongkong Land of US$104 million. Purchase ofassociates 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 FinancialServices, PT PAM Lyonnaise Jaya, Astra Daihatsu Motor and an additional 12.95%interest in Bank Permata respectively, and Jardine Strategic's increasedinterest 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 12Tangible assets 1 94Investment properties - 24Associates and joint ventures - 35Non-current debtors - 1Deferred tax assets - 1Current assets 4 626Long-term borrowings - (100)Deferred tax liabilities - (2)Current liabilities (1) (207) ------- -------Net assets 5 484Adjustment for minority interests - (262) ------- -------Net assets disposed of 5 222Cumulative exchange translation differences - (8)Profit on disposal 1 88 ------- -------Sale proceeds 6 302Adjustment for deferred consideration - 1Adjustment 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 andjoint 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 JardineStrategic'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 acapital distribution from Edaran Otomobil Nasional followed by sale of thatinvestment. Sale of other investments in 2006 included US$31 million fromJardine Pacific's sale of its interest in BALtrans, US$27 million from Astra'ssale of securities and US$407 million from sale of the Group's interest inJPMorgan Chase. 13. Capital Commitments and Contingent Liabilities 2007 2006 US$m US$m ------------------Capital commitments 263 202 ----- ----- Various Group companies are involved in litigation arising in the ordinarycourse of their respective businesses. Having reviewed outstanding claims andtaking into account legal advice received, the Directors are of the opinionthat 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 inKorea 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 CentralKalimantan, 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 20thMarch 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 closedfrom 24th to 28th March 2008, inclusive. Shareholders will receive their cashdividends in United States Dollars, unless they are registered on the Jerseybranch register where they will have the option to elect for sterling. Theseshareholders may make new currency elections for the 2007 final dividend bynotifying the United Kingdom transfer agent in writing by 25th April 2008. Thesterling equivalent of dividends declared in United States Dollars will becalculated by reference to a rate prevailing on 30th April 2008. Shareholdersholding their shares through The Central Depository (Pte) Limited ('CDP') inSingapore will receive United States Dollars unless they elect, through CDP, toreceive Singapore Dollars or the scrip alternative.----------------------------------------------------------------------------------- - end - For further information, please contact: Jardine Matheson LimitedJames Riley (852) 2843 8229 Matheson & Co., Limited Philip Hawkins (020) 7816 8136 GolinHarrisKennes Young (852) 2501 7987 Weber Shandwick FinancialRichard Hews/ Hannah Marwood (020) 7067 0700 Full text of the Preliminary Announcement of Results and the PreliminaryFinancial Statements for the year ended 31st December 2007 can be accessedthrough the Internet at 'www.jardines.com'. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Jardine Math.sr