15th Aug 2007 10:05
Jardine Matheson Hldgs Ld15 August 2007 To: Business Editor 15th August 2007 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 LimitedInterim Results for the Six Months ended 30th June 2007 Highlights • Strong growth in underlying earnings per share*• Good performances from all Group companies• Hongkong Land property portfolio value up 10%• Increase in proportion of dividend payable at the interim "The exceptional level of profit growth in the first half of 2007 was to someextent flattered by comparison with a relatively weak start to the previousyear. While the pace of increase for the full year will inevitably slow, theoverall outlook remains positive provided the current benign environmentpersists." Henry Keswick, Chairman15th August 2007 Results________________________________________________________________________________ (unaudited) Six months ended 30th June________________________________________________________________________________ 2007 2006 Change US$m US$m %________________________________________________________________________________Underlying profit attributable to shareholders* 320 228 +41Profit attributable to shareholders 793 550 +44Shareholders' funds+ 7,362 6,594 +12________________________________________________________________________________ US$ US$ %________________________________________________________________________________Underlying earnings per share* 0.90 0.65 +38Earnings per share 2.24 1.57 +43Interim dividend per share (rebalanced) 0.20 0.10 +100________________________________________________________________________________* The Group uses 'underlying business performance' in its internalfinancial reporting to distinguish between the underlying profits andnon-trading items, as more fully described in note 8 to the condensedfinancial statements. Management considers this to be a key measure andhas provided this analysis as additional information in order to providegreater understanding of the Group's underlying business performance. + At 30th June 2007 and 31st December 2006, respectively.________________________________________________________________________________ The interim dividend of USc20.00 per share will be payable on 24th October 2007to shareholders on the register of members at the close of business on 31stAugust 2007 and will be available in cash with a scrip alternative. Theex-dividend date will be on 29th August 2007, and the share registers will beclosed from 3rd to 7th September 2007, inclusive. Jardine Matheson Holdings LimitedInterim Results for the Six Months ended 30th June 2007 OverviewMost of the Group's businesses recorded good results, benefiting from thepositive economic environment that prevailed in Asian markets. PerformanceThe Company's underlying profit attributable to shareholders for the first sixmonths of 2007 was US$320 million, up 41% over the same period in 2006.Underlying earnings per share were 38% higher at US$0.90. The turnover of theGroup, including 100% of the turnover of associates and joint ventures, wasUS$14.9 billion, compared to US$13.0 billion in the first half of 2006. Non-trading items include a net gain of US$396 million arising from a furtherincrease in investment property values during the period, compared with a US$287million gain in 2006. This has been taken through the profit and loss account.Non-trading items also include profits arising on the restructuring of JardineLloyd Thompson's French associate and the disposal by Jardine Strategic of partof its shareholding in Butterfield Bank. After non-trading items, the Company'sprofit attributable to shareholders was US$793 million. Of the Group's wholly-owned subsidiaries, Jardine Pacific's result improved,with satisfactory profit growth in many of its operations, and Jardine Motorsalso produced increased earnings. Among the Group's major quoted subsidiaries,Dairy Farm posted another good result with all its major retail formatsperforming well; Mandarin Oriental benefited from healthy markets and a fullcontribution from its renovated Hong Kong property to report an outstandingprofit increase; and Jardine Cycle & Carriage's earnings were sharply higher asthe recovery in Indonesia boosted Astra's results. Among the Group'sequity-accounted affiliates, Hongkong Land's contribution rose significantly aspositive rental reversions continued in its prime commercial portfolios, andJardine Lloyd Thompson reported improved figures based on firm cost control. TheGroup's results were also helped by an enhanced contribution from its stake inRothschilds Continuation Holdings and by lower financing charges. The Board has decided to rebalance the proportion of the dividend payable at thehalf year to represent approximately one third of the total dividend payable forthe year. Accordingly an interim dividend of USc20.00 per share has beendeclared, an increase of 100%. Business ActivityMost of Jardine Pacific's businesses produced improved profit performances inthe first half of 2007, with the exception of its aviation and shippingoperations. HACTL saw only a modest growth in cargo volumes during the period,while its medium-term profitability remains uncertain due to the additionalcapacity that will be coming available at Hong Kong's airport in 2011. Jardine Motors achieved good levels of sales in its Mercedes-Benz operations inHong Kong, Macau and Southern China. Its UK businesses also performedsatisfactorily, and recorded gains on property disposals. The group's resultsfor the full year, however, are unlikely to reach those achieved in 2006 as theywill not enjoy favourable pension adjustments or the same level of propertygains. Dairy Farm has continued to build scale in its major markets across Asia withfurther store openings in all formats; the group now operates 57 hypermarkets inSoutheast Asia. The expansion of its 7-Eleven chain in Southern China gatheredpace in June with the acquisition and re-branding of a convenience store chainin Guangdong. Dairy Farm is now established in Vietnam, with its first fourstores laying the foundation for a more substantial business, while in India itssupermarket and health & beauty joint ventures continue to make progress. Thecompany has announced plans for a special dividend, which its strong cashposition will enable it to pay without impairing its development programme. Mandarin Oriental's results have benefited from higher average room rates in itskey markets together with a full contribution from its freshly-renovatedflagship hotel in Hong Kong. The strength of its brand continues to attractinterest from owners and developers, and the group now has 16 hotels underdevelopment following the announcement of five new projects during the firsthalf of the year. These include a 241-room hotel in the headquarters of ChinaCentral Television in Beijing and a 150-room property in central Paris. The continued improvement in the Indonesian economy led to enhanced results fromJardine Cycle & Carriage's 50.1%-held subsidiary, Astra, where motor vehiclesales rose significantly, although motorcycle sales showed only marginal growthin the face of keen competition. Astra's financial services businesses and palmoil operations are performing well, and United Tractors achieved profit growthdespite its coal mining activities experiencing a poor start to the year.Jardine Cycle & Carriage's directly held motor dealership interests alsoreported an increased contribution. Robust commercial property markets in Hong Kong and Singapore enabled HongkongLand to achieve a significant increase in both earnings and capital values.Construction is under way at the group's latest joint venture development inSingapore, Marina Bay Financial Centre, which is scheduled for phased completionfrom 2010. Hongkong Land's residential developments in Hong Kong, Macau,mainland China and Singapore are progressing on target, while its Singaporesubsidiary, MCL Land, experienced strong demand on the launch of three newresidential projects. Jardine Lloyd Thompson faced continued downward pressure on insurance rates andfurther weakness in the US dollar in the first half, which particularly affectedits London market and reinsurance operations. It did well to record an increasein underlying trading profit from continuing operations, primarily due to marginimprovement arising from tight cost control. Rothschild's investment banking business produced record revenues in a positivebusiness environment. The group has recently announced a reorganization of itsshareholding interests to consolidate its French banking activities within thesame holding structure as N.M. Rothschild & Sons under Rothschilds ContinuationHoldings. OutlookIn conclusion, the Chairman, Henry Keswick said, "The exceptional level ofprofit growth in the first half of 2007 was to some extent flattered bycomparison with a relatively weak start to the previous year. While the pace ofincrease for the full year will inevitably slow, the overall outlook remainspositive provided the current benign environment persists." Operating Review Jardine PacificJardine Pacific's underlying profit from continuing businesses for the firsthalf of 2007 increased by 16% to US$53 million with further strong performancesfrom Jardine Restaurants and Gammon. HACTL's result was little changed as the increase in cargo throughput in thefirst half was only 1%. JARDINE AVIATION SERVICES' earnings declined due toreduced flight frequencies and higher operating costs. JARDINE SHIPPING SERVICESestablished a joint venture with a long-term liner principal, UASC, which led toan initial reduction in the contribution from the transferred business, althoughthe effect on the company was largely offset by increased activity and firmerrates. GAMMON continued to perform well in Hong Kong and Macau in the first half of theyear. JARDINE SCHINDLER's earnings rose due to an improved performance from itsexisting installation portfolio, while JEC recorded a higher profit withincreased contributions from Thailand and the Philippines. JARDINE RESTAURANTS achieved significant earnings growth from its Pizza Hutoperation in Hong Kong. JARDINE ONESOLUTION recorded a 12% increase in sales,which led to higher profits from most of its operations. ROOMPLUS, a selfstorage business in Hong Kong, recorded a small loss, although its occupancylevels have shown improvement. The group's interest in COLLIERS HALIFAX, aproperty services joint venture in Japan, was sold to Hongkong Land in earlyJune. Jardine Pacific's businesses are expected to produce steady performances in thesecond half of the year. Jardine Motors GroupJardine Motors' underlying profit from continuing businesses for the first halfof 2007 was US$34 million, up 21%. Zung Fu's new Mercedes-Benz car deliveries remained strong in Hong Kong,although below the level achieved in the same period last year following thesuccessful launch of the new S-Class. Its service centres continued to performwell, but the Hyundai passenger car franchise recorded a small loss in a verycompetitive market segment. The performance of the Mercedes-Benz dealership inMacau improved with a good build-up of its order book. The Mercedes-Benz dealerships in Southern China continued their profitablegrowth with a significant increase in new car deliveries, while the aftersalesbusiness also achieved higher volumes. The group's businesses in the United Kingdom benefited from a satisfactory newcar market, the acquisition in January of an Audi dealership group and gainsarising from the disposal of a property and a dealership. The resulting growthin earnings was enhanced further upon translation into US dollars. Overall, however, it is unlikely that Jardine Motors will achieve the same levelof earnings in 2007 as in 2006, when the group benefited from one-off pensionand property gains. Jardine Lloyd ThompsonAgainst a background of increasingly challenging trading conditions JardineLloyd Thompson's turnover for its continuing operations, following disposals inthe United States, was marginally ahead for the first six months at US$484million. The results of the actions to raise efficiency taken by management over the last18 months are beginning to be seen. Underlying trading margin improved to 17%from 15%, following a reduction in operating costs, and underlying tradingprofit from continuing operations was up 10% at US$80 million. Jardine Lloyd Thompson's Risk & Insurance group produced a modest growth inturnover notwithstanding continued pressure on rates, intense competition andfurther weakness in the US dollar, which particularly affected the London marketand reinsurance operations. Its Employee Benefits business in the United Kingdomcontinued to make steady progress and produced an improved trading margin on aturnover up 5%. The continuing deterioration in insurance markets and the dollar-sterlingexchange rate will restrict growth in Jardine Lloyd Thompson's results for thefull year. Hongkong LandContinued strength in the commercial property markets in Hong Kong and Singaporeand lower financing charges enabled Hongkong Land to increase underlying profitby 32% to US$155 million. A 10% improvement in capital values was recorded overthe period. Competition for prime Central district office space in Hong Kong continues,driven primarily by the financial services sector and underpinned by tightsupply. Vacancy in Hongkong Land's office portfolio at the end of June was 3%.The group's retail portfolio is also benefiting from high demand and is fullyleased. The strength of the financial services sector in Singapore is also behind thedemand for high quality office space. The recently completed One Raffles Quay,developed by a consortium in which Hongkong Land holds a one-third interest, hasestablished itself as the leading office building in Singapore's prime businessdistrict. The same consortium has now begun construction of the larger MarinaBay Financial Centre. Hongkong Land has a number of residential projects under development in HongKong, Macau, mainland China and Singapore, which will contribute to its resultsupon their completion over the next few years. Singapore subsidiary, MCL Land,had an active first half in which it successfully launched three residentialprojects and secured three additional development sites. The level of its profitrecognition on developments in 2007 will depend on whether a 421-unit projectcompletes before the year end or in early 2008. The outlook for Hongkong Land for the remainder of the year is encouraging as itwill continue to benefit from positive rental reversions in its key markets. Dairy FarmDairy Farm performed well in the first half of 2007 as it benefited fromfavourable trading environments in its major markets. Sales, including those ofassociates, increased by 11% to US$3.2 billion, and underlying profit for theperiod was 17% higher at US$101 million. Dairy Farm's North Asian businesses performed well with improved results fromretail banners in Hong Kong and Macau. In Taiwan, its supermarket operationtraded in line with last year in a highly competitive market, but IKEA's resultsremain below expectations. The group now operates over 400 7-Eleven outlets inSouthern China following the acquisition and re-branding of a convenience storechain in Guangdong. Hong Kong restaurant associate, Maxim's, enjoyed good growthas its fast food operations continued to recover. Sales and profit in East Asia grew following another good performance fromMalaysia, where there was further expansion in all formats, particularly in EastMalaysia. Earnings in Indonesia, however, remained unsatisfactory and managementchanges were made to address the issues. The group has entered the Vietnamesemarket with the acquisition of four supermarkets. In South Asia sales rose 16%, but operating profit was only marginally higher asthe contribution from Singapore was affected by expenses incurred in therelocation of its head office and distribution centre, and costs in establishingtwo new Giant hypermarkets. The group's supermarket and health and beauty jointventures in India added 14 outlets, while the remodelling of older stores isprogressing. In Thailand, 13 health and beauty stores are now being operated inGreater Bangkok. Dairy Farm's retail businesses continue to enjoy leading positions in theirmarket sectors, and the prospects for the remainder of the year are positive. Mandarin OrientalConditions in Mandarin Oriental's key markets remained strong in the first halfof 2007. Increases in average room rates together with a full contribution fromthe newly-renovated Mandarin Oriental, Hong Kong enabled the group to achieve asignificant improvement in earnings. Underlying profit rose 150% to US$34million. The net result benefited from a US$16 million gain arising on the saleof half of its 50% equity interest in Mandarin Oriental, New York. Mandarin Oriental, Hong Kong achieved a higher average room rate following itsrefurbishment, and The Excelsior, Hong Kong also produced good growth in roomrate. The contribution from hotels in London and Geneva was higher due to thestrengthening of occupancy and room rates, while in the United States, itsWashington D.C. property continued to improve. Despite the reduced investment inits New York property, contribution from associates and joint ventures alsoincreased. Excellent progress was made in Mandarin Oriental's expansion programme with theannouncement of five projects during the first half of 2007. The group now has16 hotels under development and, with the exception of Paris, these will bemanagement contracts requiring little or no investment from the group. Eightwill also incorporate a 'residences' component. Mandarin Oriental has some 9,800rooms in operation or planned, and its geographic spread has increasedsignificantly with more than half of its portfolio outside of Asia. Mandarin Oriental is expected to continue to experience favourable conditionsduring the remainder of the year. Jardine Cycle & CarriageJardine Cycle & Carriage achieved a good level of profit growth in the firsthalf of 2007 as the businesses of its 50.1%-held subsidiary, Astra, benefitedfrom the continued strengthening of the Indonesian economy. Underlying profitfor the six months increased by 56% to US$152 million. Astra's contribution was 46% higher at US$147 million, enhanced in part by astronger Rupiah. Improved earnings were achieved in its automotive, financialservices, palm oil and heavy equipment activities. The contribution to Jardine Cycle & Carriage from its directly held motoroperations rose 43% to US$19 million. In Singapore, its operations produced agood result, supported by strong demand for Mercedes-Benz passenger cars.Indonesian associate, Tunas Ridean, performed well in line with the strongmarket, but Cycle & Carriage Bintang continued to struggle as trading conditionsin the Malaysian automotive sector remained difficult. The encouraging performances in most of Jardine Cycle & Carriage's keybusinesses are expected to continue for the remainder of the year, although themotorcycle sector in Indonesia will remain challenging for Astra. Astra InternationalAstra performed well as the Indonesian automotive market continued to recover,particularly in the motor vehicle sector which has seen a greater decline in2006 than motorcycles. The wholesale motor vehicle market grew by 32% to 197,300units in the first six months of the year. Astra's motor vehicle sales alsoincreased, but at the lower rate of 25% to 104,300 units. This led to its marketshare reducing from 56% to 53%. Sales in the wholesale motorcycle market inIndonesia rose 17% during the same period, reaching 2.1 million units. In theface of keen competition, however, Astra's wholesale motorcycle sales were onlymarginally higher at 923,400 units and its market share fell from 50% to 44%. Astra's financial services activities benefited from the growth in theautomotive market, while Bank Permata performed well due to the higher netinterest margins achieved. Astra Agro Lestari's earnings were strongly aheadfollowing a 56% increase in crude palm oil prices, which more than offset theeffects of a 12% decline in production. United Tractors produced a modest growthin earnings as a 57% increase in unit sales of Komatsu equipment compensated forlower contribution from its coal mining subsidiary, Pamapersada Nusantara,resulting from adverse weather conditions and operational interruptions. ________________________________________________________________________________Jardine Matheson Holdings LimitedConsolidated Profit and Loss Account________________________________________________________________________________ (unaudited) Six months ended 30th June Year ended 31st December 2007 2006 2006 Underlying Underlying Underlying business Non-trading business Non-trading business Non-trading performance items Total performance items Total performance items Total US$m US$m US$m US$m US$m US$m US$m US$m US$m________________________________________________________________________________________________________________________ Revenue (note 2) 9,189 - 9,189 7,878 - 7,878 16,281 - 16,281Net operating costs (note 3) (8,543) 94 (8,449) (7,439) 97 (7,342) (15,274) 302 (14,972) ________ __________ _______ ___________ __________ _______ _____________ __________ ________ Operating profit (note 4) 646 94 740 439 97 536 1,007 302 1,309 ________ __________ _______ ___________ __________ _______ _____________ __________ ________Financing charges (127) - (127) (110) - (110) (234) - (234)Financing income 68 - 68 46 - 46 102 - 102 ________ __________ _______ ___________ __________ _______ _____________ __________ ________ Net financing charges (59) - (59) (64) - (64) (132) - (132)Share of results of associates and joint ventures (note 5) 257 510 767 205 363 568 439 748 1,187 ________ __________ _______ ___________ __________ _______ _____________ __________ ________ Profit before tax 844 604 1,448 580 460 1,040 1,314 1,050 2,364Tax (note 6) (174) (11) (185) (111) (46) (157) (252) (58) (310) ________ __________ _______ ___________ __________ _______ _____________ __________ ________ Profit after tax 670 593 1,263 469 414 883 1,062 992 2,054 ________ __________ _______ ___________ __________ _______ _____________ __________ ________Attributable to:Shareholders of the Company 320 473 793 228 322 550 533 815 1,348Minority interests 350 120 470 241 92 333 529 177 706 ________ __________ _______ ___________ __________ _______ _____________ __________ ________ 670 593 1,263 469 414 883 1,062 992 2,054 ________ __________ _______ ___________ __________ _______ _____________ __________ ________ US$ US$ US$ US$ US$ US$________________________________________________________________________________________________________________________Earnings per share (note 7)- basic 0.90 2.24 0.65 1.57 1.52 3.83- diluted 0.90 2.19 0.65 1.53 1.51 3.75 ________ ________ ________ ________ ________ ________ ________________________________________________________________________________Jardine Matheson Holdings LimitedConsolidated Balance Sheet________________________________________________________________________________ (unaudited) At 31st At 30th June December Restated 2007 2006 2006 US$m US$m US$m _________________________________________________________ Assets Intangible assets 1,873 1,743 1,825Tangible assets 2,979 2,610 2,931Investment properties 267 179 271Plantations 474 413 460Associates and joint ventures 7,168 5,497 6,476Other investments 664 877 597Non-current debtors 879 1,141 1,052Deferred tax assets 118 116 119Pension assets 173 150 174 __________ __________ __________ Non-current assets 14,595 12,726 13,905 __________ __________ __________ Stocks and work in progress 1,478 1,447 1,478Current debtors 2,506 2,441 2,262Current investments 13 - 3Current tax assets 140 83 142Bank balances and other liquid funds __________ __________ __________- non-financial services companies 2,292 1,693 2,355- financial services companies 233 189 173 __________ __________ __________ 2,525 1,882 2,528 __________ __________ __________ 6,662 5,853 6,413Non-current assets classified as held for sale (note 9) 10 39 60 __________ __________ __________Current assets 6,672 5,892 6,473 __________ __________ __________ __________ __________ __________Total assets 21,267 18,618 20,378 __________ __________ __________ ________________________________________________________________________________Jardine Matheson Holdings LimitedConsolidated Balance Sheet (continued) ________________________________________________________________________________ (unaudited) At 31st At 30th June December Restated 2007 2006 2006 US$m US$m US$m _________________________________________________________ Equity Share capital 154 153 154Share premium and capital reserves 33 25 29Revenue and other reserves 8,102 6,404 7,303Own shares held (927) (873) (892) __________ __________ __________Shareholders' funds (note 10) 7,362 5,709 6,594Minority interests 4,846 4,070 4,509 __________ __________ __________Total equity 12,208 9,779 11,103 __________ __________ __________Liabilities Long-term borrowings __________ __________ __________- non-financial services companies 1,918 2,375 2,074- financial services companies 680 825 723 __________ __________ __________ 2,598 3,200 2,797Deferred tax liabilities 572 466 557Pension liabilities 152 191 151Non-current creditors 133 154 190Non-current provisions 21 17 20 __________ __________ __________Non-current liabilities 3,476 4,028 3,715 __________ __________ __________ Current creditors 3,334 2,779 2,920Current borrowings __________ __________ __________- non-financial services companies 1,153 806 1,522- financial services companies 854 1,027 954 __________ __________ __________ 2,007 1,833 2,476Current tax liabilities 179 145 101Current provisions 63 53 63 _________ __________ __________ 5,583 4,810 5,560Liabilities directly associated with non-current assets classified as held for sale (note 9) - 1 - _________ __________ __________Current liabilities 5,583 4,811 5,560 _________ __________ __________Total liabilities 9,059 8,839 9,275 _________ __________ __________ _________ __________ __________Total equity and liabilities 21,267 18,618 20,378 _________ __________ __________ ________________________________________________________ ________________________________________________________________________________Jardine Matheson Holdings LimitedConsolidated Statement of Recognized Income and Expense________________________________________________________________________________ Year (unaudited) ended Six months ended 31st 30th June December 2007 2006 2006 US$m US$m US$m ________________________________________ Surpluses on revaluation of properties 1 - 120Gains on revaluation of other investments 124 208 294Actuarial gains/(losses) on defined benefit pension plans 16 (10) 40Net exchange translation differences (2) 225 393Gains/(losses) on cash flow hedges 3 2 (13)Tax on items taken directly to equity (24) 3 (71) __________ __________ __________ Net income recognized directly in equity 118 428 763Transfer to profit and loss on disposal of other investments (44) (8) (79)Transfer to profit and loss on realization of exchange reserves (7) 1 (3)Transfer to profit and loss in respect of cash flow hedges 1 2 4Profit after tax 1,263 883 2,054 __________ __________ __________Total recognized income and expense for the period 1,331 1,306 2,739 __________ __________ __________Attributable to:Shareholders of the Company 861 777 1,681Minority interests 470 529 1,058 __________ __________ __________ 1,331 1,306 2,739 __________ __________ __________ _________________________________________________________________________________________________________________________Jardine Matheson HoldingsLimitedConsolidated Cash Flow Statement________________________________________________________________________________ Year (unaudited) ended Six months ended 31st 30th June December 2007 2006 2006 US$m US$m US$m ________________________________________________Operating activities ________ ________ ________ Operating profit 740 536 1,309Depreciation and amortization 232 194 403Other non-cash items (17) 7 (138)Decrease in working capital 136 185 478Interest received 60 45 95Interest and other financing charges paid (113) (105) (212)Tax paid (115) (185) (362) ________ ________ ________ 923 677 1,573Dividends from associates and joint ventures 166 236 377 ________ ________ ________Cash flows from operating activities 1,089 913 1,950 Investing activities Purchase of subsidiary undertakings (note 12(a)) (18) (31) (55)Purchase of associates and joint ventures (note 12(b)) (105) (45) (465)Purchase of other investments (27) (5) (94)Purchase of land use rights (3) (4) (17)Purchase of other intangible assets (50) - (6)Purchase of tangible assets (263) (363) (725)Purchase of investment properties (3) (2) (2)Purchase of plantations (16) (8) (22)Advance of mezzanine loans (3) - -Repayment of mezzanine loans 12 - -Capital distribution from associates 12 1 1Sale of subsidiary undertakings (note 12(c)) 7 272 231Sale of associates and joint ventures (note 12(d)) 102 9 100Sale of other investments (note 12(e)) 72 46 480Sale of land use rights 12 8 26Sale of tangible assets 38 28 75 ________ ________ ________ Cash flows from investing activities (233) (94) (473) Financing activities ________ ________ ________ Issue of shares 1 2 3Capital contribution from minority shareholders 1 10 13Drawdown of borrowings 2,682 4,629 7,611Repayment of borrowings (3,364) (5,171) (8,008)Dividends paid by the Company (81) (71) (91)Dividends paid to minority shareholders (97) (77) (243) ________ ________ ________Cash flows from financing activities (858) (678) (715)Effect of exchange rate changes 1 20 45 ________ ________ ________Net (decrease)/increase in cash and cash equivalents (1) 161 807Cash and cash equivalents at beginning of period 2,491 1,684 1,684 ________ ________ ________Cash and cash equivalents at end of period 2,490 1,845 2,491 ________ ________ ________ ________________________________________________________________________________Jardine Matheson Holdings LimitedAnalysis of Profit Contribution________________________________________________________________________________ Year (unaudited) ended Six months ended 31st 30th June December 2007 2006 2006 US$m US$m US$m ____________________________________Group contribution Jardine Pacific 52 46 103Jardine Motors Group 34 31 67Jardine Lloyd Thompson 20 18 28Hongkong Land 58 39 85Dairy Farm 63 53 131Mandarin Oriental 21 8 27Jardine Cycle & Carriage 10 6 16Astra 71 46 101Corporate and other interests (9) (19) (25) _________ _________ _________Underlying net profit 320 228 533Increase in fair value of investment properties 396 287 671Other non-trading items 77 35 144 _________ _________ _________Profit attributable to shareholders 793 550 1,348 Analysis of Jardine Pacific's contribution Gammon 9 6 14HACTL 14 14 33Jardine Aviation Services 3 4 9JEC 4 3 12JOS 6 5 11Jardine Property Investment 1 1 3Jardine Restaurants 10 8 14Jardine Schindler 9 8 12Jardine Shipping Services 2 2 4Corporate and other interests (5) (6) (12) _________ _________ _________Continuing businesses 53 45 100Discontinued businesses (1) 1 3 _________ _________ _________ 52 46 103 _________ _________ _________Analysis of Jardine Motors Group's contribution Hong Kong and Mainland China 20 21 36United Kingdom 15 8 29Corporate (1) (1) (2) _________ _________ _________Continuing businesses 34 28 63Discontinued businesses - 3 4 _________ _________ _________ 34 31 67 _________ _________ _________ ________________________________________________________________________________Jardine Matheson Holdings LimitedNotes________________________________________________________________________________ 1. Accounting Policies and Basis of Preparation The financial information contained in this announcement has been based on the unaudited interim condensed financial statements, which have been prepared in accordance with IAS 34, Interim Financial Reporting. In 2007, the Group adopted the following standards and interpretations to existing standards which are relevant to its operations: _____________________________________________________________________________ IFRS 7 Financial Instruments: Disclosures IAS 1 (amended 2005) Presentation of Financial Statements - Capital Disclosures IFRIC 8 Scope of IFRS 2 IFRIC 9 Reassessment of Embedded Derivatives IFRIC 10 Interim Financial Reporting and Impairment _____________________________________________________________________________ There have been no changes to the accounting policies described in the 2006 annual financial statements as a result of adoption of the above standards and interpretations. The comparative figures for the six months ended 30th June 2006 have been restated to reflect revisions to the provisional fair value of certain liabilities in Rothschilds determined at the date of acquisition, which were reflected in the 2006 annual financial statements. Certain comparative figures have been reclassified to conform with the current period presentation. The Group's reportable segments are set out in note 2 and are described above in the Operating Review. 2. Revenue Six months ended 30th June 2007 2006 US$m US$m __________________________ By business: Jardine Pacific 535 472 Jardine Motors Group 1,479 1,185 Dairy Farm 2,796 2,496 Mandarin Oriental 250 183 Jardine Cycle & Carriage 642 558 Astra 3,486 2,980 Other activities 1 4 ___________ ___________ 9,189 7,878 ___________ ___________ 3. Net Operating Costs Six months ended 30th June 2007 2006 US$m US$m __________________________ Cost of sales (7,081) (6,046) Other operating income 179 182 Selling and distribution costs (1,072) (1,030) Administration expenses (465) (436) Other operating expenses (10) (12) ___________ ___________ (8,449) (7,342) ___________ ___________ 4. Operating Profit Six months ended 30th June 2007 2006 US$m US$m __________________________ By business: Jardine Pacific 37 28 Jardine Motors Group 59 43 Dairy Farm 113 97 Mandarin Oriental 70 92 Jardine Cycle & Carriage 21 18 Astra 415 267 ___________ ___________ 715 545 Corporate and other interests 25 (9) ___________ ___________ 740 536 ___________ ___________ Operating profit included the following gains from non-trading items: Sale and closure of businesses 30 84 Sale of investments 47 11 Realization of exchange gains* 7 - Discount on acquisition of businesses 9 - Other 1 2 ___________ ___________ 94 97 ___________ ___________ * Arising on repatriation of capital from a foreign subsidiary undertaking. 5. Share of Results of Associates and Joint Ventures Six months ended 30th June 2007 2006 US$m US$m ___________________________ By business: Jardine Pacific 39 39 Jardine Motors Group - 3 Jardine Lloyd Thompson 38 18 Hongkong Land 569 406 Dairy Farm 11 10 Mandarin Oriental 8 6 Jardine Cycle & Carriage 4 2 Astra 86 70 Corporate and other interests 12 14 ____________ ____________ 767 568 ____________ ____________ Share of results of associates and joint ventures included the following gains/(losses) from non-trading items: Increase in fair value of investment properties 496 360 Sale and closure of businesses (3) 1 Sale of investments - 5 Restructuring of SIACI in Jardine Lloyd Thompson 18 - Other (1) (3) ____________ ____________ 510 363 ____________ ____________ Results are shown after tax and minority interests in the associates and joint ventures. 6. Tax Six months ended 30th June 2007 2006 US$m US$m ___________________________ United Kingdom 7 5 Other jurisdictions 178 152 ____________ ____________ 185 157 ____________ ____________ 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$166 million (2006: US$130 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$793 million (2006: US$550 million) and on the weighted average number of 354 million (2006: 350 million) shares in issue during the period. Diluted earnings per share are calculated on profit attributable to shareholders of US$777 million (2006: US$537 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of subsidiary undertakings, associates or joint ventures, and on the weighted average number of 355 million (2006: 352 million) shares after adjusting for the number of shares which are deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes based on the average share price during the period. The weighted average number of shares is arrived at as follows: Ordinary shares in millions 2007 2006 __________________________ Weighted average number of shares in issue 617 607 Shares held by the Trustee under the Senior Executive Share Incentive Schemes (2) (2) Company's share of shares held by subsidiary undertakings (261) (255) _________ _________ Weighted average number of shares for basic earnings per share calculation 354 350 Adjustment for shares deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes 1 2 _________ _________ Weighted average number of shares for diluted earnings per share calculation 355 352 _________ _________ Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below: Six months ended 30th June 2007 2006 Basic Diluted Basic Diluted earnings earnings earnings earnings per share per share per share per share US$m US$ US$ US$m US$ US$ _____________________________________________________________________________ Profit attributable to shareholders 793 2.24 2.19 550 1.57 1.53 Non-trading items (note 8) (473) (322) _____ _____ Underlying profit attributable to shareholders 320 0.90 0.90 228 0.65 0.65 _____ _____ 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; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance. An analysis of non-trading items after interest, tax and minority interests is set out below: Six months ended 30th June 2007 2006 US$m US$m ______________________ Increase in fair value of investment properties in Hongkong Land 396 287 Sale and closure of businesses ______ ______ - 25% interest in Mandarin Oriental, New York 9 - - The Mark - 21 - other 4 1 ______ ______ 13 22 Sale of investments 37 15 Restructuring of SIACI in Jardine Lloyd Thompson 18 - Realization of exchange gains* 7 - Discount on acquisition of businesses 2 - Other - (2) ______ ______ 473 322 ______ ______ * Arising on repatriation of capital from a foreign subsidiary undertaking. 9. Non-current Assets Classified as Held for Sale The major classes of assets and liabilities classified as held for sale are set out below: At 31st At 30th June December 2007 2006 2006 US$m US$m US$m ______________________________ Tangible assets 3 11 4 Investment properties 7 - 2 Associates and joint ventures - 28 14 Non-current debtors - - 31 Current assets - - 9 _____ _____ _____ Total assets 10 39 60 _____ _____ _____ Deferred tax liabilities - 1 - _____ _____ _____ Total liabilities - 1 - _____ _____ _____ At 30th June 2007, the non-current assets classified as held for sale included certain of Jardine Motors Group's properties in the United Kingdom and Jardine Cycle & Carriage's investment properties in Malaysia. Non-current assets classified as held for sale at 31st December 2006 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$25 million, which was included in other operating income. 10.Shareholders' Funds Six months ended 30th June 2007 2006 US$m US$m __________________________ At 1st January - as previously reported 6,594 4,999 - revision of fair value adjustments on acquisition of Rothschilds - (1) ____________ ____________ - as restated 6,594 4,998 Recognized income and expense attributable to shareholders 861 777 Dividends (note 11) (141) (125) Employee share option schemes - value of employee services 3 4 - exercise of share options 1 2 Scrip issued in lieu of dividends 78 144 Change in attributable interests 1 1 Increase in own shares held (35) (92) ____________ ____________ At 30th June 7,362 5,709 ____________ ____________ 11.Dividends Six months ended 30th June 2007 2006 US$m US$m __________________________ Final dividend in respect of 2006 of USc40.00 (2005: USc35.65) per share 246 216 Company's share of dividends paid on the shares held by subsidiary undertakings (105) (91) ____________ ____________ 141 125 ____________ ____________ An interim dividend in respect of 2007 of USc20.00 (2006: USc10.00) per share amounting to a total of US$124 million (2006: US$61 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on the shares held by subsidiary undertakings of US$53 million (2006: US$26 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2007. 12.Notes to Consolidated Cash Flow Statement Six months ended 30th June 2007 2006 (a) Purchase of subsidiary undertakings US$m US$m _________________________ Intangible assets 2 - Tangible assets 3 4 Current assets 31 15 Long-term borrowings - (1) Pension liabilities (1) (1) Non-current creditors (1) - Current liabilities (20) (9) Minority interests - (2) ___________ ___________ Fair value of net assets 14 6 Adjustment for minority interests - 4 ___________ ___________ Fair value of net assets acquired 14 10 Goodwill 6 3 ___________ ___________ Total consideration 20 13 Adjustment for carrying value of associates and joint ventures - (2) Cash and cash equivalents of subsidiary undertakings acquired (2) - ___________ ___________ Net cash outflow 18 11 Purchase of shares in Jardine Cycle & Carriage - 20 ___________ ___________ 18 31 ___________ ___________ Net cash outflow in 2007 of US$18 million principally related to Jardine Motors Group's acquisition of a dealership in the United Kingdom. Net cash outflow in 2006 of US$11 million included US$6 million for Jardine Motors Group's acquisition of dealerships in the United Kingdom (b) Purchase of associates and joint ventures for the six months ended 30th June 2007 included Jardine Strategic's increased interest in Hongkong Land of US$96 million. Purchase of associates and joint ventures for the six months ended 30th June 2006 included US$26 million for Astra's interest in Toyota Astra Financial Services and Jardine Strategic's increased interest in Hongkong Land of US$13 million. Six months ended 30th June 2007 2006 (c) Sale of subsidiary undertakings US$m US$m __________________________ Intangible assets 1 12 Tangible assets 1 92 Investment properties - 24 Associates and joint ventures - 35 Deferred tax assets - 1 Current assets 4 615 Long-term borrowings - (100) Deferred tax liabilities - (1) Current liabilities - (163) _________ _________ Net assets 6 515 Adjustment for minority interests - (261) _________ _________ Net assets disposed of 6 254 Cumulative exchange translation differences 1 (3) Profit on disposal - 83 _________ _________ Sale proceeds 7 334 Adjustment for carrying value of associates and joint ventures - (13) Closure and related costs - (1) Cash and cash equivalents of subsidiary undertakings disposed of - (48) _________ _________ Net cash inflow 7 272 _________ _________ Sale proceeds in 2006 of US$334 million included US$143 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 the sale of the Group's interest in MCL Land. (d) Sale of associates and joint ventures for the six months ended 30th June 2007 included US$22 million from Jardine Pacific's sale of its 50% interest in Colliers Halifax and US$75 million from Mandarin Oriental's sale of its 25% interest in Mandarin Oriental, New York. (e) Sale of other investments for the six months ended 30th June 2007 included US$50 million and US$12 million from Jardine Strategic's sale of its interest in The Bank of N.T. Butterfield & Son and CNAC respectively. Sale of other investments for the six months ended 30th June 2006 included US$31 million from Jardine Pacific's sale of its interest in BALtrans. 13.Capital Commitments and Contingent Liabilities At 31st At 30th June December 2007 2006 2006 US$m US$m US$m _________________________________________ Capital commitments 241 315 202 _____ _____ _____ Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the financial statements. ________________________________________________________________________________The interim dividend of USc20.00 per share will be payable on 24th October 2007to shareholders on the register of members at the close of business on 31stAugust 2007, and will be available in cash with a scrip alternative. Theex-dividend date will be on 29th August 2007, and the share registers will beclosed from 3rd to 7th September 2007, inclusive. Shareholders will receivetheir cash dividends in United States Dollars, unless they are registered on theJersey branch register where they will have the option to elect for Sterling.These shareholders may make new currency elections by notifying the UnitedKingdom transfer agent in writing by 5th October 2007. The Sterling equivalentof dividends declared in United States Dollars will be calculated by referenceto a rate prevailing on 10th October 2007. Shareholders holding their sharesthrough The Central Depository (Pte) Limited ('CDP') in Singapore will receiveUnited States Dollars unless they elect, through CDP, to receive SingaporeDollars or the scrip alternative.________________________________________________________________________________ -end- For further information, please contact: Jardine Matheson LimitedJames Riley (852) 2843 8229 Matheson & Co., LimitedPhilip Hawkins (020) 7816 8136 GolinHarrisKennes Young (852) 2501 7987 Weber Shandwick FinancialRichard Hews/ Georgia Dempsey (020) 7067 0700 This and other Group announcements can be accessed through the Internet at'www.jardines.com'. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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