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MarketScreener Homepage  >  Equities  >  Singapore Stock Exchange  >  Jardine Strategic Holdings Limited    J37   BMG507641022

JARDINE STRATEGIC HOLDINGS LIMITED

(J37)
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End-of-day quote. End-of-day quote Singapore Stock Exchange - 01/25
27.39 USD   -0.07%
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Jardine Strategic : Half-Yearly Results for the Six Months ended 30th June 2020

07/30/2020 | 06:55am EST

To: Business Editor

30th July 2020

For immediate release

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

Jardine Strategic Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2020

Challenging first half, strong balance sheet and solid mid-term prospects

Highlights

  • All businesses faced challenging market conditions
  • Underlying profit of US$395 million for the period to 30th June 2020, down 49% against prior year
  • Some signs of business recovery in second quarter, but the outlook remains uncertain
  • Group's balance sheet and funding position remain strong
  • Interim dividend declared of US¢10.50 per share, unchanged from the same period in 2019

"As expected, COVID-19 had a significant impact on the Group's results in the first half, with Southeast Asia particularly affected. It is expected that the pandemic will continue to create uncertainty and volatility in the second half, making it difficult to predict full year performance.

On behalf of the Board, I would like to thank all my colleagues across the Group for their continuing dedication, hard work and professionalism during such challenging times.

The Group has a strong balance sheet and liquidity position and will remain vigilant for value-adding opportunities should they arise, despite the uncertain near-term outlook."

Ben Keswick, Executive Chairman

Results

(unaudited)

Six months ended 30th June

2020

2019

Change

US$m

US$m

%

Gross revenue including 100% of Jardine Matheson,

44,936

associates and joint ventures

50,274

−11

Revenue

12,748

15,999

−20

Underlying profit* attributable to shareholders

395

779

−49

(Loss)/profit attributable to shareholders

(961)

1,657

n/a

US$

US$

%

Underlying earnings per share*

0.71

1.38

−49

(Loss)/earnings per share

(1.72)

2.93

n/a

Net asset value per share#

48.71

57.98

−16

US¢

US¢

%

Interim dividend per share

10.50

10.50

-

* The Group uses 'underlying profit' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 9 to the condensed financial statements. Management considers this to be a key measure which provides additional information to enhance understanding of the Group's underlying business performance.

# At 30th June 2020 and 31st December 2019, respectively. Net asset value per share is calculated on a market value basis, details of which are set out in note 15 to the condensed financial statements.

The interim dividend of US¢10.50 per share will be payable on 14th October 2020 to shareholders on the register of members at the close of business on 21st August 2020 and will be available in cash with a scrip alternative.

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Jardine Strategic Holdings Limited

Half-Yearly Results for the Six Months ended 30th June 2020

CHAIRMAN'S STATEMENT

Overview

The Group's performance and profitability in the first half were significantly impacted by COVID-19 and the restrictions imposed to contain it. Greater China was mainly affected in the first quarter, while Southeast Asia felt the impact of the pandemic increasingly in the second quarter.

With the notable exception of Mandarin Oriental, the Group's major businesses remained profitable in the first half, although at materially lower levels than the same period last year. While there were some signs of recovery in certain of the Group's businesses in the second quarter (including the Group's property development and motors businesses on the Chinese mainland), the possibility of further waves of the pandemic makes it difficult to predict performance in the second half.

Jardines remains resilient and well-positioned to achieve its long-term growth objectives, reflecting the diversity of the Group's businesses, the strength of their underlying business models and the Group's clear strategic aims.

The Group also remains focussed on addressing changes in customer behaviours, some of which may be permanent, and the need for each of its businesses to adapt and align to new situations resulting from COVID-19. The pandemic has further accelerated change and disruption in our markets, and our people and businesses are aiming to respond with speed and agility.

The balance sheet and liquidity of the Group remain robust. Across the Group, extensive actions continue to be taken to manage costs and preserve cash, including operational improvements to ensure the long-term resilience of the business. The Group also has access to substantial undrawn liquidity from committed lending facilities.

Results

The Group's underlying profit for the first six months of 2020 was US$395 million,

US$384 million, or 49%, below the corresponding period last year, and underlying earnings per share were down 49% at US$0.71. The revenue of the Group for the period was 20% lower at US$12.7 billion, while revenue, including 100% of Jardine Matheson, associates and joint ventures, was down 11% at US$44.9 billion.

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Within Jardine Matheson's directly-held businesses, Jardine Pacific's performance was slightly down overall compared with the same period last year and it remains a resilient, cash-generative group of businesses. HACTL performed strongly, while the contributions from JEC and Jardine Restaurants were solid. Jardine Schindler and Gammon delivered weaker performances, and the contribution from Aviation Services was significantly lower due to the challenges facing the aviation sector.

Jardine Motors saw its results fall, with the UK business materially impacted by lockdown measures and a weaker performance from Zung Fu on the Chinese mainland and in Hong Kong in the first quarter. There was, however, a higher contribution in the period from the investment in Zhongsheng, relating to its performance for the six months from July to December 2019.

Hongkong Land's office portfolio remained resilient in Hong Kong and Singapore, but the provision of rent relief to tenants negatively impacted Hong Kong retail profit. Profit from Development Properties was lower in all the group's markets due to fewer scheduled completions in the period.

Dairy Farm saw its overall profits fall significantly due to reduced contributions from Health & Beauty, Maxim's and Convenience Stores, all of which have been impacted by the severe decline in tourism and pandemic-related restrictions. There were, however, strong performances from the group's Grocery Retail operations and Home Furnishings business.

Mandarin Oriental recorded a significant loss in the first half of the year, as the majority of the group's hotels were closed throughout the second quarter.

In Southeast Asia, Astra's performance was significantly weaker in the period, with lower contributions from automotive, financial services and heavy equipment and mining, and Jardine Cycle & Carriage ('JC&C') also saw reduced contributions from Thaco and its Motor businesses, which experienced declines in all markets due to the temporary closure of operations.

The Group recorded a non-trading net loss in the first half of US$1,356 million, compared with a non-trading net gain of US$878 million in the first half of 2019. This was as a result of the biannual revaluations of investment properties in Hongkong Land - which produced a net revaluation loss of US$1,099 million as values were suppressed due to lower open market rents

  • and The Excelsior site, which led to a US$261 million revaluation loss. In the first half of 2019, a US$2.3 billion gain was recognised in the asset revaluation reserves when the site was reclassified as a commercial investment property. The Group recorded a loss attributable to shareholders for the period of US$961 million, compared with a profit of US$1,657 million in 2019.
    • more -

Page 4

Financial Position

The balance sheet and liquidity of the Group remain strong. Across the Group, extensive actions continue to be taken to manage costs, preserve cash and increase liquidity, including the reduction, suspension or deferral of non-essential operating and capital expenditure.

Shareholders' funds were US$34.4 billion at 30th June 2020, compared with US$35.8 billion at 31st December 2019. Consolidated net debt excluding financial services companies was US$6.1 billion at 30th June 2020, representing gearing of 10%, compared with 9% at

31st December 2019. The Group had liquidity of US$12.7 billion, consisting of US$6.8 billion in cash reserves and US$5.9 billion in unused, committed debt facilities.

Dividend

The Board has declared an interim dividend of US¢10.50 per share, in line with last year. The Board will review the final dividend for the year at the end of the second half.

Business Developments

Planning of Hongkong Land's prime mixed-use site in the West Bund area of Shanghai is underway, with completion expected in multiple phases through to 2027. Subject to relevant approvals by the authorities, the group has conditionally reached agreements with two strategic partners to jointly develop the site and received a prepayment of US$2.3 billion in the first half, with a further amount of US$320 million received in July. The land premium and related costs of US$4.5 billion were paid in the first half.

Dairy Farm's multi-year programme to reshape and reorganise the business, adapting to the changing needs of customers, has never been more relevant and continued to progress during the first half of the year, despite the impact of the pandemic.

This week's launch of Yuu, expected to become Hong Kong's largest loyalty programme, is an important milestone in Dairy Farm's drive to modernise its business and achieve a digital transformation of the group. The Yuu programme will be a key enabler of Dairy Farm's objective of adopting a more customer-centric approach across all its banners and driving enhanced levels of consumer engagement. The divestment of Wellcome Taiwan is expected to complete by the end of the year.

Mandarin Oriental signed one new management contract in the period, for a hotel and residences in Vienna, which are scheduled to open in 2023.

In May 2020, Astra completed the sale of its 44.56% stake in Permata Bank for net consideration of US$1.1 billion. The disposal, which followed the sale of Jardine Matheson's

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Page 5

interest in Jardine Lloyd Thompson in 2019, has further reduced our exposure to a high risk sector, realised a significant gain for the Group and helped ensure that the business remains well-capitalised at both the Astra and Jardine Matheson levels.

People

Ensuring the safety and wellbeing of employees during the pandemic is a top priority and the Group's businesses have adopted a range of appropriate health and safety measures.

Support from governments in a number of our key markets has helped maintain employment. We would like to thank all our colleagues for their continuing dedication, hard work and professionalism during this challenging time.

As planned and announced earlier in the year, I stepped down as Group Managing Director on 15th June 2020 and was succeeded by John Witt, formerly Chief Financial Officer. Graham Baker was appointed as Chief Financial Officer with effect from 15th June 2020. I will continue as Group Chairman and look forward to working with John, Graham and the wider leadership team in the coming years.

Outlook

The pandemic continues to create uncertainty and volatility and trading conditions in the second half are expected to continue to be challenging. While there were some signs of recovery in certain of the Group's businesses in the second quarter, the possibility of further waves of the pandemic make it difficult to predict performance in the second half.

The Group is focussed both on driving operational performance across its businesses and on identifying and taking the potential opportunities which are emerging from the pandemic to drive future growth. The Group's strong balance sheet, long-term perspective and liquidity will position it well to take advantage of these opportunities as they arise.

Ben Keswick

Executive Chairman

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Page 6

OPERATING REVIEW

Jardine Pacific

Jardine Pacific reported an underlying net profit of US$53 million in the first half, compared with US$56 million in the equivalent period in 2019. The group remains resilient and cash-generative. HACTL performed strongly and saw cargo throughput maintained, and JEC had a solid start to the year, with improved performances both in Hong Kong and regionally. Jardine Restaurants saw mixed results across its banners, with strong delivery sales for Pizza Hut in Hong Kong and Taiwan - thanks to a quick pivot towards this by management - but weaker performances in its other banners due to the impact of the pandemic. Gammon's contribution was lower, with slower progress on several projects, while Jardine Schindler also saw a number of projects in Southeast Asia delayed, leading to a reduced contribution in the period. Jardine Aviation Services delivered significantly lower results due to the substantial fall in flight volumes, which is expected to continue in the second half.

Jardine Motors

Jardine Motors saw its underlying net profit for the first half fall by 43% to US$61 million. Zung Fu on the Chinese mainland experienced a challenging first quarter, as factories and showrooms closed due to the pandemic, the supply chain was disrupted and there were lower margins from aftersales services. The second quarter saw some recovery in demand, but it is difficult to predict future performance given the uncertainty over the future impact of the pandemic. Zung Fu in Hong Kong also saw poor margins in the period due to weaker consumer sentiment. The United Kingdom business was materially impacted by lockdown measures and made a loss in the first half. Conditions in the UK market are expected to remain challenging in the second half.

There was a higher contribution from the investment in Zhongsheng, relating to its performance for the six months from July to December 2019.

Hongkong Land

Hongkong Land's underlying profit attributable to shareholders for the first six months was

US$353 million, down 24% from the equivalent period in 2019. There was a loss attributable to shareholders of US$1,828 million after accounting for a net non-cash loss of US$2,180 million arising on the bi-annual revaluation of investment properties, due to lower open market rents. This compares with a profit attributable to shareholders of US$411 million in the first half of 2019, which included a net revaluation loss of US$55 million. The group's financial position remains robust, with a strong balance sheet and liquidity.

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Page 7

The group's office portfolio in Hong Kong remained resilient, despite subdued leasing activity, with vacancy at 5% at the end of June 2020 (4.5% on a committed basis), compared to 2.9% at the end of 2019. The Central retail portfolio was negatively impacted in the first half by deteriorating consumer sentiment and various measures introduced in Hong Kong to contain the pandemic. Vacancy of 0.4% on both a physical and committed basis was virtually unchanged compared to 0.3% at the end of 2019.

In Singapore, rental reversions remained positive in the group's office portfolio in the first half and vacancy was 1.5% at the end of June 2020 (1% on a committed basis), compared with 5% at the end of 2019.

In Shanghai, planning of Hongkong Land's prime mixed-use site along the Huangpu River in the Xuhui District is underway, with completion expected in multiple phases through to 2027. The project will substantially expand Hongkong Land's portfolio and provide it with a significant presence in the predominant commercial hub of the Chinese mainland, complementing its large-scale presence in the other key Asian financial centres of Hong Kong and Singapore.

Since securing the site and subject to relevant approvals by the authorities, the group has conditionally reached agreements with two strategic partners to jointly develop the site, receiving a prepayment of US$2.3 billion in the first half with a further amount of US$320 million received in July. The land premium and related costs of US$4.5 billion were paid in the first half. The project will be funded by a combination of internal resources and external funding.

On the Chinese mainland, as anticipated the profit contribution from Development Properties in the first half of 2020 decreased compared to the first half of 2019 due to fewer sales completions. Market sentiment in the group's core markets started to recover in the second quarter, following the temporary closure of all sales galleries and the suspension of construction activities for some two months in the first quarter as a result of the impact of the pandemic. At 30th June 2020, the Group had US$2,183 million in sold but unrecognised contracted sales, compared with US$1,860 million at the end of 2019.

The profit contribution from the Singapore business in the first half of 2020 was lower than in the first half of 2019, as sales galleries and construction activities there were also suspended as a result of the pandemic. The 309-unit Margaret Ville development is 92% pre-sold, whilst pre-sales at the 1,404-unit Parc Esta and the 638-unit Leedon Green projects have performed well under current market conditions. The group's attributable interest in contracted sales was US$301 million in the first half of 2020, compared to US$255 million and US$414 million in the first and second halves of 2019, respectively.

In the rest of Southeast Asia, construction activities at the group's projects have largely been suspended or curtailed since April and market sentiment remains subdued.

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Page 8

Dairy Farm

Dairy Farm saw sales of US$5.2 billion for the period by its subsidiaries, 9% lower than the prior year. Underlying profit was US$105 million, 40% lower than the same period last year.

In Health and Beauty, performance in North Asia was materially affected by a continuing lack of overseas tourist customers in Hong Kong, despite the business initially seeing strong demand for personal protection equipment. The Southeast Asia business performed well in the first quarter but was then impacted as social distancing requirements began to take effect towards the end of the first quarter.

The Convenience Stores business was impacted in the period by movement restrictions and physical distancing requirements, as well as temporary store closures on the Chinese mainland and reduced customer numbers in Hong Kong and Singapore. Performance improved over the course of the first half in Hong Kong and on the Chinese mainland in particular, as various lockdown restrictions eased, but it is difficult to predict performance for the rest of the year given uncertainty over the future impact of the pandemic. Recovery in Singapore has lagged behind that in North Asia.

Maxim's, the group's 50%-owned associate, saw a significant reduction in customer numbers and a number of temporary store closures, and reported a loss for the first half. The performance of the business improved over the course of the second quarter, as pandemic-related restrictions eased, but any return of restrictions which reduce customer levels or require further temporary closures of its outlets will impact future performance.

The Grocery Retail business saw improved profits. The strong performance was underpinned by the ongoing execution of the group's transformation plan and improvement programmes, as well as changing customer behaviours as a result of the pandemic. The strong turnaround momentum continued in Singapore and Malaysia as the execution of improvement programmes and the group's space optimisation plan both made a positive contribution, and there were encouraging performances from new upscale formats and refreshed stores. Market conditions in Indonesia remained challenging. The divestment of Wellcome Taiwan is expected to complete by the end of the year.

There was also a good performance from Home Furnishings, which saw strong contributions from new stores, enhancements in the margin mix and lower cost of goods in the period outweigh the impact on customer visits of pandemic-related restrictions, including temporary store closures.

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Page 9

Mandarin Oriental

Mandarin Oriental recorded a significant underlying loss of US$102 million for the first half of the year, compared with a profit of US$11 million in the equivalent period in 2019, despite implementing a number of cost containment measures. In Europe and America, all of the group's hotels were closed from late March onwards. Hotels in Asia and the Middle East mostly remained open during the first half but operated at very low occupancy levels once anti-pandemic restrictions and border controls were imposed. Combined total revenue of hotels under management fell by 57% in the first half compared to the equivalent period last year, with the majority of this decline occurring in the second quarter, which saw an 86% decline against the prior year.

The group's flagship Hong Kong hotel remained open, but with single-digit percentage occupancy levels for most of the second quarter, and it made a loss during the first half. It did, however, benefit from a partial recovery in food and beverage business when government anti-pandemic measures were relaxed.

The group's hotels on the Chinese mainland saw a recovery in occupancy levels in June to around 40%, and elsewhere a number of the group's hotels have begun to reopen in anticipation of some demand but, in many cases, this demand is expected to remain low and not in line with normal market conditions. Overall a material recovery in business levels is not expected until 2021 at the earliest and a significant further loss is likely in the second half of the year.

Jardine Cycle & Carriage

Jardine Cycle & Carriage reported an underlying profit for the period of US$138 million, 66% lower than the equivalent period last year. Profit attributable to shareholders fell by 30% to US$301 million. The pandemic is expected to continue to adversely impact performance for the rest of the year.

Astra's contribution to underlying profit fell by 47% to US$171 million. There were significantly weaker performances from its automotive, financial services and heavy equipment and mining operations.

The contribution from JC&C's Direct Motor Interests and Thaco fell materially as automotive operations were forced to close during the second quarter due to lockdown restrictions.

Thaco saw sales and margins impacted as a result of the difficult market conditions. The contribution by Cycle & Carriage Singapore was 95% lower than the same period last year, as the business was impacted by a material reduction in the overall passenger car market in Singapore and its market share also fell. Tunas Ridean's contribution was 70% lower due to

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Page 10

weaker performances across its automotive, consumer finance and rental operations. In Malaysia, Cycle & Carriage Bintang reported a higher loss than in the same period last year, as sales and margins both fell. Market conditions are expected to remain difficult for the remainder of the year.

There was a 5% lower contribution from Siam City Cement in Thailand, reflecting weaker domestic performance, which was partially offset by an improved contribution from its regional operations, primarily in Vietnam. The contribution from Refrigeration Electrical Engineering Corporation in Vietnam was also lower, with weaker performances from its power and water investments and its M&E business, partially offset by stronger real estate contributions.

Vinamilk produced dividend income of US$12 million in the period, compared to US$28 million in the same period last year, which included the 2019 interim dividend. Vinamilk's 2020 interim dividend will be recognised later in the year. The business reported a slightly higher profit in the first half, in local currency terms, as domestic dairy and exports continued to grow.

Astra

Excluding the gain on the disposal of its investment in Permata Bank, Astra reported net profit equivalent to US$372 million, under Indonesian accounting standards, 44% lower in its reporting currency. This was mainly due to significantly lower contributions from its automotive, financial services and heavy equipment and mining businesses, partially offset by its agribusiness.

The pandemic containment measures implemented across Indonesia caused severe disruption to Astra's operations, including the temporary closure of its automotive manufacturing and distribution operations. There was also a significant rise in the number of restructured loans in its financial services businesses, in response to government operating requirements. In addition, depressed coal prices led to a deterioration in Astra's heavy equipment, mining contracting and mining businesses.

Net income from Astra's automotive business fell by 79% to US$48 million, mainly due to a substantial fall in sales volumes, especially in the second quarter. The overall wholesale car market declined by 46% in the first half and Astra's car sales were 45% lower, although it maintained its market share. The wholesale motorcycle market declined by 42% in the period. Astra's Honda motorcycle sales fell by 40%, but its market share increased from 75% to 77%. Components business Astra Otoparts reported a net loss of US$20 million, compared with a profit of US$17 million in the same period last year, mainly due to lower revenues from the original equipment manufacturer and replacement market segments. Market conditions are expected to remain difficult for the remainder of the year.

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Net income from Astra's financial services division fell by 25% to US$142 million, primarily due to increased loan loss provisions to cover higher non-performing loan losses in the consumer and heavy equipment-focused finance businesses. Consumer finance businesses saw a 16% decrease in the amounts financed and the net income contribution from the car-focused finance companies decreased by 24%, while the contribution from the motorcycle-focused financing business fell by 25%. In both cases this was caused by higher loan loss provisioning, as non-performing loans increased. Heavy equipment-focused finance operations saw a 14% decrease in the amounts financed. General insurance company Asuransi Astra Buana reported a 4% decrease in net income to US$35 million, caused by lower underwriting income.

In May 2020, Astra completed its sale of its 44.56% stake in Permata Bank for a net consideration of US$1.1 billion.

Net income from Astra's Heavy Equipment, Mining, Construction and Energy division decreased by 29% to US$160 million, mainly due to lower heavy equipment sales and mining contracting volume caused by weaker coal prices. Market conditions are expected to remain challenging for the rest of the year. United Tractors reported a 28% decrease in net income, while Komatsu heavy equipment sales fell by 56%, and parts and service revenues were also lower. Mining contracting operations reported lower overburden removal volume and lower coal production. Coal mining subsidiaries achieved higher coal sales but were affected by lower coal prices. Agincourt Resources saw 4% lower gold sales. General contractor Acset Indonusa, however, reported a 38% lower net loss of US$17 million, mainly due to reduced funding costs.

Astra's infrastructure and logistics division reported a net loss of US$6 million for the first half, compared to a net profit of US$6 million for the same period in 2019, mainly due to lower toll road revenues caused by lower traffic volumes. Serasi Autoraya's net income decreased by 62% to US$2 million, primarily as a result of lower operating margins, despite a 3% increase in vehicles under leasing contract and higher used car sales.

Net income from Astra's Agribusiness division increased significantly to US$21 million, due to higher crude palm oil prices, especially in the first quarter.

Net income from Astra's information technology division was 64% lower, primarily due to lower revenues in Astra Graphia's document solution and office service businesses.

The group's property division saw net income increase, mainly due to higher occupancy at Menara Astra and earnings recognised from its development project, Asya Residences.

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Jardine Strategic Holdings Limited

Consolidated Profit and Loss Account

(unaudited)

2020

Six months ended 30th June

2019

Year ended 31st December

2019

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)

12,748

-

12,748

15,999

-

15,999

32,665

-

32,665

Net operating costs (note 3)

(11,642)

325

(11,317)

(14,281)

47

(14,234)

(28,930)

39

(28,891)

Change in fair value of investment

-

(2,397)

(2,397)

properties

-

(65)

(65)

-

(915)

(915)

Operating profit

1,106

(2,072)

(966)

1,718

(18)

1,700

3,735

(876)

2,859

Net financing charges

- financing charges

(327)

-

(327)

(376)

-

(376)

(751)

-

(751)

- financing income

105

-

105

104

-

104

221

-

221

Share of results of Jardine Matheson

(222)

-

(222)

(272)

-

(272)

(530)

-

(530)

42

5

47

91

880

971

187

946

1,133

(note 4)

Share of results of associates and joint

ventures (note 5)

- before change in fair value of

199

(57)

142

investment properties

502

2

504

1,108

12

1,120

- change in fair value of investment

-

(135)

(135)

properties

-

(10)

(10)

-

(11)

(11)

199

(192)

7

502

(8)

494

1,108

1

1,109

Profit/(loss) before tax

1,125

(2,259)

(1,134)

2,039

854

2,893

4,500

71

4,571

Tax (note 6)

(226)

11

(215)

(378)

(2)

(380)

(902)

(18)

(920)

Profit/(loss) after tax

899

(2,248)

(1,349)

1,661

852

2,513

3,598

53

3,651

Attributable to:

Shareholders of the Company

395

(1,356)

(961)

779

878

1,657

1,681

497

2,178

(notes 7 & 9)

Non-controlling interests

504

(892)

(388)

882

(26)

856

1,917

(444)

1,473

899

(2,248)

(1,349)

1,661

852

2,513

3,598

53

3,651

US$

US$

US$

US$

US$

US$

Earnings/(loss) per share (note 8)

- basic

0.71

(1.72)

1.38

2.93

2.98

3.86

- diluted

0.71

(1.72)

1.38

2.93

2.98

3.86

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Page 13

Jardine Strategic Holdings Limited

Consolidated Statement of Comprehensive Income

(unaudited)

Year ended

Six months ended

31st

2020

30th June

December

2019

2019

US$m

US$m

US$m

(Loss)/profit for the period

(1,349)

2,513

3,651

Other comprehensive (expense)/income

Items that will not be reclassified to profit or loss:

Remeasurements of defined benefit plans

(1)

(1)

(8)

Net revaluation surplus before transfer to

investment properties

-

- right-of-use assets

2,943

2,943

Tax on items that will not be reclassified

(1)

-

4

Share of other comprehensive income

(2)

2,942

2,939

-

of Jardine Matheson

-

12

Share of other comprehensive expense of

(3)

associates and joint ventures

-

(13)

Items that may be reclassified subsequently to

(5)

2,942

2,938

profit or loss:

Net exchange translation differences

- net (loss)/gain arising during the period

(108)

256

486

- transfer to profit and loss

5

-

3

Revaluation of other investments at fair value

(103)

256

489

through other comprehensive income

- net (loss)/gain arising during the period

(3)

14

20

- transfer to profit and loss

(3)

-

(1)

Cash flow hedges

(6)

14

19

- net loss arising during the period

(58)

(52)

(93)

- transfer to profit and loss

4

(4)

(4)

(54)

(56)

(97)

Tax relating to items that may be reclassified

1

18

29

Share of other comprehensive (expense)/income

(11)

of Jardine Matheson

67

74

Share of other comprehensive (expense)/income

(401)

of associates and joint ventures

143

211

(574)

442

725

Other comprehensive (expense)/income for the

(579)

period, net of tax

3,384

3,663

Total comprehensive (expense)/income for the

(1,928)

period

5,897

7,314

Attributable to:

(1,210)

Shareholders of the Company

4,209

4,872

Non-controlling interests

(718)

1,688

2,442

(1,928)

5,897

7,314

- more -

Page 14

Jardine Strategic Holdings Limited

Consolidated Balance Sheet

(unaudited)

At 31st

2020

At 30th June

December

2019

2019

US$m

US$m

US$m

Assets

2,632

Intangible assets

2,615

2,693

Tangible assets

6,476

6,727

6,841

Right-of-use assets

4,326

4,468

4,406

Investment properties

39,142

37,557

36,817

Bearer plants

483

499

503

Investment in Jardine Matheson

3,326

3,668

3,703

Associates and joint ventures

13,769

14,780

15,288

Other investments

2,538

2,752

2,675

Non-current debtors

3,303

3,135

3,023

Deferred tax assets

395

381

415

Pension assets

1

-

2

Non-current assets

76,391

76,582

76,366

Properties for sale

2,358

2,424

2,441

Stocks and work in progress

2,477

2,854

2,811

Current debtors

6,067

7,372

7,424

Current investments

40

37

29

Current tax assets

169

207

252

Bank balances and other liquid funds

- non-financial services companies

6,521

4,552

5,346

- financial services companies

241

241

256

6,762

4,793

5,602

Current assets

17,873

17,687

18,559

Total assets

94,264

94,269

94,925

(Consolidated Balance Sheet continued on page 15)

- more -

Page 15

Jardine Strategic Holdings Limited

Consolidated Balance Sheet (continued)

(unaudited)

At 31st

2020

At 30th June

December

2019

2019

US$m

US$m

US$m

Equity

56

Share capital

56

56

Share premium and capital reserves

941

941

941

Revenue and other reserves

35,706

36,428

37,054

Own shares held

(2,298)

(2,278)

(2,294)

Shareholders' funds

34,405

35,147

35,757

Non-controlling interests

28,763

29,386

29,903

Total equity

63,168

64,533

65,660

Liabilities

Long-term borrowings

- non-financial services companies

8,721

6,992

6,976

- financial services companies

1,426

1,803

1,697

10,147

8,795

8,673

Non-current lease liabilities

2,777

2,945

2,842

Deferred tax liabilities

702

696

767

Pension liabilities

375

327

364

Non-current creditors

407

349

356

Non-current provisions

280

267

289

Non-current liabilities

14,688

13,379

13,291

Current creditors

9,182

8,954

8,287

Current borrowings

- non-financial services companies

3,860

4,205

4,368

- financial services companies

2,049

1,820

1,853

5,909

6,025

6,221

Current lease liabilities

823

834

795

Current tax liabilities

331

358

507

Current provisions

163

186

164

Current liabilities

16,408

16,357

15,974

Total liabilities

31,096

29,736

29,265

Total equity and liabilities

94,264

94,269

94,925

- more -

Page 16

Jardine Strategic Holdings Limited

Consolidated Statement of Changes in Equity

Attributable to

Attributable

Asset

Own

shareholders

to non-

Share

Share

Capital

Revenue

Contributed

revaluation

Hedging

Exchange

shares

of the

controlling

Total

capital

premium

reserves

reserves

surplus

reserves

reserves

reserves

held

Company

interests

equity

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Six months ended 30th June 2020 (unaudited)

65,660

At 1st January 2020

56

816

125

36,085

304

2,566

(27)

(1,874)

(2,294)

35,757

29,903

Total comprehensive expense

-

-

-

(965)

-

-

(57)

(188)

-

(1,210)

(718)

(1,928)

Dividends paid by the Company (note 10)

-

-

-

(140)

-

-

-

-

-

(140)

-

(140)

Dividends paid to non-controlling interests

-

-

-

-

-

-

-

-

-

-

(401)

(401)

Employee share option schemes

-

-

1

-

-

-

-

-

-

1

-

1

Scrip issued in lieu of dividends

-

-

-

4

-

-

-

-

-

4

-

4

Increase in own shares held

-

-

-

-

-

-

-

-

(4)

(4)

-

(4)

Subsidiaries disposed of

-

-

-

-

-

-

-

-

-

-

(14)

(14)

Capital contribution from non-controlling interests

-

-

-

-

-

-

-

-

-

-

1

1

Change in interests in subsidiaries

-

-

-

5

-

-

-

-

-

5

(5)

-

Change in interests in associates and joint ventures

-

-

-

(8)

-

-

-

-

-

(8)

(3)

(11)

Transfer

-

-

(1)

1

-

-

-

-

-

-

-

-

At 30th June 2020

56

816

125

34,982

304

2,566

(84)

(2,062)

(2,298)

34,405

28,763

63,168

Six months ended 30th June 2019 (unaudited)

At 1st January 2019

56

816

209

33,996

304

264

(13)

(2,261)

(2,139)

31,232

28,342

59,574

Total comprehensive income

-

-

-

1,658

-

2,302

(10)

259

-

4,209

1,688

5,897

Dividends paid by the Company (note 10)

-

-

-

(136)

-

-

-

-

-

(136)

-

(136)

Dividends paid to non-controlling interests

-

-

-

-

-

-

-

-

-

-

(654)

(654)

Employee share option schemes

-

-

2

-

-

-

-

-

-

2

-

2

Scrip issued in lieu of dividends

-

-

-

5

-

-

-

-

-

5

-

5

Increase in own shares held

-

-

-

-

-

-

-

-

(139)

(139)

-

(139)

Capital contribution from non-controlling interests

-

-

-

-

-

-

-

-

-

-

15

15

Change in interests in subsidiaries

-

-

-

(8)

-

-

-

-

-

(8)

-

(8)

Change in interests in associates and joint ventures

-

-

-

(18)

-

-

-

-

-

(18)

(5)

(23)

Transfer

-

-

(86)

86

-

-

-

-

-

-

-

-

At 30th June 2019

56

816

125

35,583

304

2,566

(23)

(2,002)

(2,278)

35,147

29,386

64,533

(Consolidated Statement of Changes in Equity continued on page 17)

- more -

Page 17

Jardine Strategic Holdings Limited

Consolidated Statement of Changes in Equity (continued)

Attributable to

Attributable

Asset

Own

shareholders

to non-

Share

Share

Capital

Revenue

Contributed

revaluation

Hedging

Exchange

shares

of the

controlling

Total

capital

premium

reserves

reserves

surplus

reserves

reserves

reserves

held

Company

interests

equity

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Year ended 31st December 2019

At 1st January 2019

56

816

209

33,996

304

264

(13)

(2,261)

(2,139)

31,232

28,342

59,574

Total comprehensive income

-

-

-

2,197

-

2,302

(14)

387

-

4,872

2,442

7,314

Dividends paid by the Company

-

-

-

(195)

-

-

-

-

-

(195)

-

(195)

Dividends paid to non-controlling interests

-

-

-

-

-

-

-

-

-

-

(905)

(905)

Unclaimed dividends forfeited

-

-

-

1

-

-

-

-

-

1

-

1

Employee share option schemes

-

-

2

-

-

-

-

-

-

2

-

2

Scrip issued in lieu of dividends

-

-

-

6

-

-

-

-

-

6

-

6

Increase in own shares held

-

-

-

-

-

-

-

-

(155)

(155)

-

(155)

Subsidiaries acquired

-

-

-

-

-

-

-

-

-

-

14

14

Capital contribution from non-controlling interests

-

-

-

-

-

-

-

-

-

-

18

18

Change in interests in subsidiaries

-

-

-

(7)

-

-

-

-

-

(7)

(8)

(15)

Change in interests in associates and joint ventures

-

-

-

1

-

-

-

-

-

1

-

1

Transfer

-

-

(86)

86

-

-

-

-

-

-

-

-

At 31st December 2019

56

816

125

36,085

304

2,566

(27)

(1,874)

(2,294)

35,757

29,903

65,660

Contributed surplus represents the excess in value of shares acquired in consideration for the issue of the Company's shares, over the nominal value of those shares issued. Under the Bye-Laws of the Company, the contributed surplus is distributable.

- more -

Page 18

Jardine Strategic Holdings Limited

Consolidated Cash Flow Statement

(unaudited)

Year ended

Six months ended

31st

2020

30th June

December

2019

2019

US$m

US$m

US$m

Operating activities

Cash generated from operations

2,402

2,228

4,728

Interest received

88

84

180

Interest and other financing charges paid

(341)

(371)

(744)

Tax paid

(477)

(525)

(927)

1,672

1,416

3,237

Dividends from Jardine Matheson

546

546

734

Dividends from associates and joint ventures

101

346

992

Cash flows from operating activities

2,319

2,308

4,963

Investing activities

Purchase of subsidiaries

(21)

-

(28)

Purchase of associates and joint ventures (note 12(a))

(151)

(639)

(1,088)

Purchase of other investments (note 12(b))

(220)

(279)

(409)

Purchase of intangible assets

(61)

(123)

(216)

Purchase of tangible assets

(312)

(615)

(1,129)

Additions to right-of-use assets

(8)

(51)

(60)

Additions to investment properties (note 12(c))

(4,557)

(72)

(168)

Additions to bearer plants

(16)

(21)

(44)

Advance to and repayment to associates and joint ventures

(139)

(410)

(1,025)

(note 12(d))

Advance from and repayment from associates and joint

340

ventures (note 12(e))

321

920

Advance received on conditional sale of a subsidiary in

2,252

Hongkong Land (note 12(c))

-

-

Sale of subsidiaries

48

-

-

Sale of associates and joint ventures (note 12(f))

1,138

3

3

Sale of other investments (note 12(g))

188

205

450

Sale of intangible assets

1

-

-

Sale of tangible assets

27

8

61

Sale of right-of-use assets

-

1

3

Cash flows from investing activities

(1,491)

(1,672)

(2,730)

Financing activities

Capital contribution from non-controlling interests

1

15

18

Change in interests in subsidiaries (note 12(h))

-

(8)

(15)

Drawdown of borrowings

4,436

4,508

7,336

Repayment of borrowings

(3,122)

(3,627)

(6,454)

Principal elements of lease payments

(440)

(443)

(893)

Dividends paid by the Company

(273)

(261)

(376)

Dividends paid to non-controlling interests

(251)

(654)

(905)

Cash flows from financing activities

351

(470)

(1,289)

Net increase in cash and cash equivalents

1,179

166

944

Cash and cash equivalents at beginning of period

5,583

4,555

4,555

Effect of exchange rate changes

(31)

56

84

Cash and cash equivalents at end of period

6,731

4,777

5,583

- more -

Page 19

Jardine Strategic Holdings Limited

Notes to Condensed Financial Statements

1. Accounting Policies and Basis of Preparation

The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' and on a going concern basis. The condensed financial statements have not been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.

The Group had early adopted the 'Interest Rate Benchmark Reform: Amendments to IFRS 9, IAS 39 and IFRS 7' (effective 1st January 2020) for the Group's annual reporting period commencing 1st January 2019.

There are no changes to the accounting policies as described in the 2019 annual financial statements other than the following changes in relation to rent concessions and government grants. Other amendments which are effective in 2020 and relevant to the Group's operations, do not have a significant effect on the Group's accounting policies. The Group has not early adopted any other standard or amendments that have been issued but not yet effective.

COVID-19 Related Rent Concessions: Amendment to IFRS 16 Leases

The Group has early adopted the Amendment, which is effective 1st June 2020, for the Group's annual reporting period commencing 1st January 2020. Where the Group is a lessee, the practical expedient is applied to account for the change in lease payments resulting from rent concessions granted as a direct consequence of the COVID-19 pandemic and elects not to assess these concessions as lease modifications when all of the following conditions are met:

  1. the revised lease payments are substantially the same as, or less than, the consideration for the lease immediately preceding the change;
  2. reduction in lease payments relates to payment due on or before 30th June 2021; and
  3. there is no substantive change to the other terms and conditions of the lease.

Rent concessions fulfilling the above conditions are recognised in the profit and loss over the period in which they cover.

Government grants

Grants from government are recognised at their fair values where there is reasonable assurance that the grants will be received, and the Group will comply with the conditions associated with the grants.

Grants that compensate the Group for expenses incurred are recognised in the profit and loss as other income on a systematic basis in the period in which the expenses are recognised. Unconditional grants are recognised in the profit and loss as other income when they become receivable.

Grants related to assets are deducted in arriving at the carrying value of the related assets.

- more -

Page 20

2. Revenue

Jardine

Hongkong

Dairy

Mandarin

Cycle &

Intersegment

Land

Farm

Oriental

Carriage

Astra

transactions

Group

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Six months ended 30th June 2020

By product and service:

Property

820

-

-

-

37

(2)

855

Motor vehicles

-

-

-

514

2,169

-

2,683

Retail and restaurants

-

5,240

-

-

-

-

5,240

Financial services

-

-

-

-

716

-

716

Engineering, heavy equipment,

2,245

mining, construction and energy

-

-

-

-

2,245

-

Hotels

-

-

96

-

-

-

96

Other

-

-

-

-

913

-

913

820

5,240

96

514

6,080

(2)

12,748

Revenue from contracts with

customers:

Recognised at a point in time

102

5,240

38

487

5,147

-

11,014

Recognised over time

184

-

50

27

123

-

384

Revenue from other sources:

286

5,240

88

514

5,270

-

11,398

Rental income from investment

469

properties

466

-

-

-

5

(2)

Revenue from financial services

713

companies

-

-

-

-

713

-

Other

68

-

8

-

92

-

168

534

-

8

-

810

(2)

1,350

820

5,240

96

514

6,080

(2)

12,748

Six months ended 30th June 2019

By product and service:

Property

804

-

-

-

21

(2)

823

Motor vehicles

-

-

-

966

3,503

-

4,469

Retail and restaurants

-

5,761

-

-

-

-

5,761

Financial services

-

-

-

-

710

-

710

Engineering, heavy equipment,

mining, construction and energy

-

-

-

-

3,026

-

3,026

Hotels

-

-

279

-

-

-

279

Other

-

-

-

-

931

-

931

804

5,761

279

966

8,191

(2)

15,999

Revenue from contracts with

customers:

Recognised at a point in time

34

5,761

104

934

7,190

-

14,023

Recognised over time

185

-

165

32

189

-

571

Revenue from other sources:

219

5,761

269

966

7,379

-

14,594

Rental income from investment

properties

509

-

-

-

3

(2)

510

Revenue from financial services

companies

-

-

-

-

710

-

710

Other

76

-

10

-

99

-

185

585

-

10

-

812

(2)

1,405

804

5,761

279

966

8,191

(2)

15,999

There was no interest income calculated using effective interest method included in revenue from contracts with customers for the six months ended 30th June 2020 and 2019.

- more -

Page 21

2. Revenue (continued)

Gross revenue, comprises revenue together with 100% of revenue from Jardine Matheson, associates and joint ventures, are analysed as follows:

Six months ended 30th June

2020

2019

US$m

US$m

By business:

14,803

Jardine Matheson

14,836

Hongkong Land

1,443

1,771

Dairy Farm

14,547

13,782

Mandarin Oriental

167

449

Jardine Cycle & Carriage

3,039

3,161

Astra

11,049

16,421

Intersegment transactions

(112)

(146)

44,936

50,274

3. Net Operating Costs

Six months ended 30th June

2020

2019

US$m

US$m

Cost of sales

(9,240)

(11,740)

Other operating income

731

389

Selling and distribution costs

(1,710)

(1,795)

Administration expenses

(960)

(1,041)

Other operating expenses

(138)

(47)

(11,317)

(14,234)

Included in other operating income were government grants, the majority of which were in support of employee retention, and rent concessions of US$49 million and US$33 million, respectively, in relation to the COVID-19 pandemic for the six months ended 30th June 2020.

Net operating costs included the following gains/(losses) from non-trading items:

Change in fair value of other investments Sale of other businesses

Closure of a hotel Other

  1. 76

418-

  • (32)
  1. 3
    32547

- more -

Page 22

4. Share of Results of Jardine Matheson

Six months ended 30th June

2020

2019

US$m

US$m

By business:

33

Jardine Pacific

35

Jardine Motors

1

37

Corporate and other interests

13

899

47

971

Share of results of Jardine Matheson included the

following gains/(losses) from non-trading items:

Change in fair value of investment properties

-

5

Change in fair value of other investments

(1)

(1)

Sale of Jardine Lloyd Thompson (note 9)

-

874

Sale of property interests

6

-

Other

-

2

5

880

Results are shown after tax and non-controlling interests in Jardine Matheson.

Included in share of results of Jardine Matheson were the Group's share of the government grants, the majority of which were in support of employee retention, and rent concessions of US$19 million and US$2 million, respectively, in relation to the COVID-19 pandemic for the six months ended 30th June 2020.

- more -

Page 23

5. Share of Results of Associates and Joint Ventures

Six months ended 30th June

2020

2019

US$m

US$m

By business:

8

Jardine Matheson

58

Hongkong Land

(89)

116

Dairy Farm

16

74

Mandarin Oriental

(14)

(2)

Jardine Cycle & Carriage

17

47

Astra

74

201

Corporate and other interests

(5)

-

7

494

Share of results of associates and joint ventures included

the following gains/(losses) from non-trading items:

Change in fair value of investment properties

(135)

(10)

Change in fair value of other investments

12

(6)

Asset impairment

(67)

-

Sale of businesses

-

8

Other

(2)

-

(192)

(8)

Results are shown after tax and non-controlling interests in the associates and joint ventures.

Included in share of results of associates and joint ventures were the Group's share of the government grants, the majority of which were in support of employee retention, and rent concessions of US$22 million and US$16 million, respectively, in relation to the COVID-19 pandemic for the six months ended 30th June 2020.

- more -

Page 24

6. Tax

Six months ended 30th June

2020

2019

US$m

US$m

Tax charged to profit and loss is analysed as follows:

Current tax

(256)

(429)

Deferred tax

41

49

(215)

(380)

Greater China

(64)

(101)

Southeast Asia

(150)

(275)

United Kingdom

1

(1)

Rest of the world

(2)

(3)

(215)

(380)

Tax relating to components of other comprehensive

income or expense is analysed as follows:

Remeasurements of defined benefit plans

(1)

-

Cash flow hedges

1

18

-

18

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.

Share of tax charge of Jardine Matheson of US$8 million and tax credit of US$1 million (2019: tax charge of US$7 million and Nil) are included in share of results of Jardine Matheson and share of other comprehensive expense of Jardine Matheson, respectively.

Share of tax charge of associates and joint ventures of US$93 million and tax credit of US$18 million (2019: tax charge of US$191 million and tax credit of US$12 million) are included in share of results of associates and joint ventures and share of other comprehensive expense of associates and joint ventures, respectively.

- more -

Page 25

7. (Loss)/profit Attributable to Shareholders

Six months ended 30th June

2020

2019

US$m

US$m

Operating segments:

117

Jardine Matheson

149

Hongkong Land

178

235

Dairy Farm

81

136

Mandarin Oriental

(80)

8

Jardine Cycle & Carriage

1

53

Astra

129

245

426

826

Corporate and other interests

(31)

(47)

Underlying profit attributable to shareholders*

395

779

Decrease in fair value of investment properties

(1,360)

(32)

Sale of Jardine Lloyd Thompson

-

874

Other non-trading items

4

36

(Loss)/profit attributable to shareholders

(961)

1,657

  • Underlying profit attributable to shareholders is the measure of profit adopted by the Group in accordance with IFRS 8 'Operating Segments'.

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Page 26

8. Earnings/(loss) per Share

Basic loss per share are calculated on loss attributable to shareholders of US$961 million (2019: profit of US$1,657 million) and on the weighted average number of 560 million (2019: 565 million) shares in issue during the period.

Diluted loss per share are calculated on loss attributable to shareholders of US$961 million (2019: profit of US$1,657 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of Jardine Matheson and subsidiaries, and on the weighted average number of 560 million (2019: 565 million) shares in issue during the period.

The weighted average number of shares is arrived at as follows:

Ordinary shares

2020

in millions

2019

Weighted average number of shares in issue

1,108

1,108

Company's share of shares held by Jardine Matheson

(548)

(543)

Weighted average number of shares for earnings per share

560

calculation

565

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

2020

2019

Basic

Diluted

Basic

Diluted

earnings

earnings

earnings

earnings

per share

per share

per share

per share

US$m

US$

US$

US$m

US$

US$

(Loss)/profit attributable to

(961)

(1.72)

(1.72)

1,657

2.93

2.93

shareholders

Non-trading items (note 9)

1,356

(878)

Underlying profit attributable to

395

0.71

0.71

shareholders

779

1.38

1.38

- more -

Page 27

9. Non-trading items

Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment properties and on equity investments which are fair value through profit and loss; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.

Six months ended 30th June

2020

2019

US$m

US$m

By business:

(63)

Jardine Matheson

880

Hongkong Land

(1,099)

(28)

Dairy Farm

8

1

Mandarin Oriental

(261)

(18)

Jardine Cycle & Carriage

(17)

15

Astra

140

-

Corporate and other interests

(64)

28

(1,356)

878

An analysis of non-trading items after interest, tax and

non-controlling interests is set out below:

Change in fair value of investment properties

- Hongkong Land

(1,099)

(44)

- other

(261)

12

(1,360)

(32)

Change in fair value of other investments

(74)

52

Asset impairment

(67)

-

Sale of Jardine Lloyd Thompson

-

874

Sale of other businesses

141

6

Sale of property interests

6

-

Closure of a hotel

-

(24)

Other

(2)

2

(1,356)

878

The sale of Jardine Matheson's 41% interest in Jardine Lloyd Thompson was completed in April 2019 with net proceeds of US$2.1 billion generating a profit on sale of US$0.9 billion to the Group.

- more -

Page 28

10. Dividends

Six months ended 30th June

2020

2019

US$m

US$m

Final dividend in respect of 2019 of US¢25.00

277

(2018: US¢24.00) per share

266

Company's share of dividends paid on the shares

(137)

held by Jardine Matheson

(130)

140

136

An interim dividend in respect of 2020 of US¢10.50 (2019: US¢10.50) per share

amounting to a total of US$116 million (2019: US$116 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on the shares held by Jardine Matheson of US$57 million (2019: US$57 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2020.

- more -

Page 29

11. Financial Instruments

Financial instruments by category

The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2020 and 31st December 2019 are as follows:

Fair value

Fair value

Financial

Fair value

through

through other

assets at

Other

Total

Fair

of hedging

profit and

comprehensive

amortised

financial

carrying

instruments

loss

income

costs

liabilities

amount

value

US$m

US$m

US$m

US$m

US$m

US$m

US$m

30th June 2020

Financial assets

measured at

fair value

Other investments

- equity investments

-

1,962

-

-

-

1,962

1,962

- debt investments

-

-

616

-

-

616

616

Derivative financial

instruments

109

-

-

-

-

109

109

109

1,962

616

-

-

2,687

2,687

Financial assets not

measured at

fair value

Debtors

-

-

-

7,326

-

7,326

7,352

Bank balances

-

-

-

6,762

-

6,762

6,762

-

-

-

14,088

-

14,088

14,114

Financial liabilities

measured at

fair value

Derivative financial

instruments

(153)

-

-

-

-

(153)

(153)

Contingent

consideration

payable

-

(9)

-

-

-

(9)

(9)

(153)

(9)

-

-

-

(162)

(162)

Financial liabilities

not measured at

fair value

(16,056)

(16,294)

Borrowings

-

-

-

-

(16,056)

Lease liabilities

-

-

-

-

(3,600)

(3,600)

(3,600)

Trade and other

payable excluding

non-financial

liabilities

-

-

-

-

(5,151)

(5,151)

(5,151)

-

-

-

-

(24,807)

(24,807)

(25,045)

- more -

Page 30

11. Financial Instruments (continued) Financial instruments by category

Fair value

Fair value

Fair value

Financial

Total

through

through other

assets at

Other

of hedging

profit and

comprehensive

amortised

financial

carrying

Fair

instruments

loss

income

costs

liabilities

amount

value

US$m

US$m

US$m

US$m

US$m

US$m

US$m

31st December 2019

Financial assets

measured at

fair value

Other investments

- equity investments

-

2,035

-

-

-

2,035

2,035

- debt investments

-

-

669

-

-

669

669

Derivative financial

instruments

48

-

-

-

-

48

48

48

2,035

669

-

-

2,752

2,752

Financial assets not

measured at

fair value

Debtors

-

-

-

7,953

-

7,953

8,039

Bank balances

-

-

-

5,602

-

5,602

5,602

-

-

-

13,555

-

13,555

13,641

Financial liabilities

measured at

fair value

Derivative financial

instruments

(144)

-

-

-

-

(144)

(144)

Contingent

consideration

payable

-

(19)

-

-

-

(19)

(19)

(144)

(19)

-

-

-

(163)

(163)

Financial liabilities not

measured at

fair value

Borrowings

-

-

-

-

(14,894)

(14,894)

(15,082)

Lease liabilities

-

-

-

-

(3,637)

(3,637)

(3,637)

Trade and other

payable excluding

non-financial

liabilities

-

-

-

-

(6,627)

(6,627)

(6,627)

-

-

-

-

(25,158)

(25,158)

(25,346)

- more -

Page 31

11. Financial Instruments (continued) Fair value estimation

  1. Financial instruments that are measured at fair value
    For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements are disclosed by level of the following fair value measurement hierarchy:
    1. Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
      The fair values of listed securities and bonds are based on quoted prices in active markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current bid price.
    2. Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly ('observable current market transactions')
      The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date. The rates for interest rate swaps and caps, cross-currency swaps and forward foreign exchange contracts are calculated by reference to market interest rates and foreign exchange rates.
      The fair values of unlisted investments mainly include club and school debentures, are determined using prices quoted by brokers at the balance sheet date.
    3. Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
      The fair values of other unlisted equity investments are determined using valuation techniques by reference to observable current market transactions (including price-to earnings and price-to book ratios of listed securities of entities engaged in similar industries) or the market prices of the underlying investments with certain degree of entity specific estimates or discounted cash flow by projecting the cash inflows from these investments.

There were no changes in valuation techniques during the six months ended 30th June 2020 and the year ended 31st December 2019.

- more -

Page 32

11. Financial Instruments (continued)

The table below analyses financial instruments carried at fair value at 30th June 2020 and 31st December 2019, by the levels in the fair value measurement hierarchy:

Quoted

Observable

prices in

current

active

market Unobservable

markets

transactions

inputs

Total

US$m

US$m

US$m

US$m

30th June 2020

Assets

Other investments

- equity investments

1,596

11

355

1,962

- debt investments

616

-

-

616

Derivative financial instruments

2,212

11

355

2,578

at fair value

81

- through other comprehensive income

-

81

-

- through profit and loss

-

28

-

28

2,212

120

355

2,687

Liabilities

(9)

Contingent consideration payable

-

-

(9)

Derivative financial instruments

at fair value

(153)

- through other comprehensive income

-

(153)

-

-

(153)

(9)

(162)

31st December 2019

Assets

Other investments

- equity investments

1,667

12

356

2,035

- debt investments

669

-

-

669

Derivative financial instruments at

2,336

12

356

2,704

fair value

- through other comprehensive income

-

37

-

37

- through profit and loss

-

11

-

11

2,336

60

356

2,752

Liabilities

Contingent consideration payable

-

-

(19)

(19)

Derivative financial instruments at

fair value

- through other comprehensive income

-

(140)

-

(140)

- through profit and loss

-

(4)

-

(4)

-

(144)

(19)

(163)

There were no transfers among the

three categories during

the six months

ended

30th June 2020 and the year ended 31st December 2019. - more -

Page 33

11. Financial Instruments (continued)

Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2020 and year ended 31st December 2019 are as follows:

Unlisted

equity

investments

US$m

At 1st January 2019

248

Exchange differences

10

Additions

112

Disposals

(16)

Net change in fair value during the year included in

profit and loss

2

At 31st December 2019 and 1st January 2020

356

Exchange differences

(9)

Additions

8

At 30th June 2020

355

  1. Financial instruments that are not measured at fair value
    The fair values of current debtors, bank balances and other liquid funds, current creditors, current borrowings and current lease liabilities are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
    The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates.

- more -

Page 34

12. Notes to Consolidated Cash Flow Statement

  1. Purchase of associates and joint ventures for the six months ended 30th June 2020 mainly included US$127 million for Hongkong Land's investments primarily in Chinese mainland.
    Purchase for the six months ended 30th June 2019 mainly included US$254 million for Hongkong Land's investments primarily in Chinese mainland; US$168 million for Jardine Cycle & Carriage's additional interest in Truong Hai Auto Corporation and US$85 million for Astra's investments in toll road concessions.
  2. Purchase of other investments for the six months ended 30th June 2020 mainly included Astra's acquisition of securities.
    Purchase for the six months ended 30th June 2019 comprised Astra's investment in GOJEK and other securities of US$100 million and US$179 million, respectively.
  3. Additions to investment properties for the six months ended 30th June 2020 primarily included Hongkong Land's acquisition of a mixed-use site along the Huangpu River in the Xuhui District in Shanghai ('West Bund project') for a cost of US$4.5 billion. Subject to relevant approvals by the authorities, Hongkong Land had conditionally finalised agreements with two partners to jointly develop the West Bund project, receiving an advance of US$2.3 billion in the first half of 2020 and a further advance of US$320 million in July 2020.
  4. Advance to and repayment to associates and joint ventures for the six months ended 30th June 2020 included US$116 million for Hongkong Land's advance to its property joint ventures and US$23 million for Mandarin Oriental's advance to its associate and joint venture hotels.
    Advance for the six months ended 30th June 2019 mainly included Hongkong Land's advance to its property joint ventures.
  5. Advance from and repayment from associates and joint ventures for the six months ended 30th June 2020 and 2019 mainly included advance from and repayment from Hongkong Land's property joint ventures.
  6. Sale of associates and joint ventures for the six months ended 30th June 2020 mainly included US$1,136 million for Astra's sale of Permata Bank.
  7. Sale of other investments for the six months ended 30th June 2020 and 2019 mainly included Astra's sale of securities.
  8. Change in interests in subsidiaries

Six months ended

30th June 2019

US$m

Increase in attributable interests

- Mandarin Oriental

(5)

- other

(3)

(8)

- more -

Page 35

  1. Capital Commitments and Contingent Liabilities
    Total capital commitments at 30th June 2020 and 31st December 2019 amounted to US$5,287 million and US$2,878 million, respectively. The capital commitments at 30th June 2020 included US$2,642 million for the West Bund project in Hongkong Land.
    Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.
  2. Related Party Transactions
    The ultimate holding company of the Group is Jardine Matheson Holdings Limited ('Jardine Matheson'), a company incorporated in Bermuda. As at 30th June 2020, the Company held a 58% (31st December 2019: 58%) interest in Jardine Matheson.
    In accordance with the Bye-laws of the Company, Jardine Matheson Limited, a wholly- owned subsidiary of Jardine Matheson has been appointed as General Manager of the Company under a General Manager Agreement. With effect from 1st January 2008, Jardine Matheson Limited has sub-delegated certain of its responsibilities under the agreement to a fellow subsidiary. Total fees payable for services provided to the Company for the six months ended 30th June 2020 amounted to US$50 million (2019: US$70 million).
    In the normal course of business the Group undertakes a variety of transactions with Jardine Matheson, and with certain of its associates and joint ventures.
    The most significant of such transactions relate to the purchases of motor vehicles and spare parts from the Group's associates and joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of motor vehicles and spare parts purchased for the six months ended 30th June 2020 amounted to US$1,550 million (2019: US$2,577 million). The Group also sells motor vehicles and spare parts to its associates and joint ventures in Indonesia including PT Astra Honda Motor, PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sales of motor vehicles and spare parts for the six months ended 30th June 2020 amounted to US$187 million (2019: US$312 million).
    There were no other related party transactions that might be considered to have a material effect on the financial position or performance of the Group that were entered into or changed during the first six months of the current financial year.
    Amounts of outstanding balances with Jardine Matheson, associates and joint ventures are included in debtors and creditors, as appropriate.

- more -

Page 36

15. Market Value Basis Net Assets

At 30th

At 31st

June

December

2020

2019

US$m

US$m

Jardine Matheson

8,641

8,973

Hongkong Land

4,859

6,765

Dairy Farm

4,881

5,993

Mandarin Oriental

1,492

1,799

Jardine Cycle & Carriage

4,289

6,622

Other holdings

552

610

24,714

30,762

Jardine Strategic Corporate

2,551

1,733

27,265

32,495

US$

US$

Net asset value per share

48.71

57.98

'Market value basis net assets' are calculated based on the market price of the Company's holdings for listed companies, with the exception of the holding in Jardine Matheson which has been calculated by reference to the market value of US$17,820 million (2019: US$23,738 million) less the Company's share of the market value of Jardine Matheson's interest in the Company. For unlisted companies a Directors' valuation has been used.

Net asset value per share is calculated on 'market value basis net assets' of US$27,265 million (2019: US$32,495 million) and on 560 million (2019: 561 million) shares outstanding at the period end which excludes the Company's share of the shares held by Jardine Matheson of 549 million (2019: 548 million) shares.

- more -

Page 37

Jardine Strategic Holdings Limited

Principal Risks and Uncertainties

The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.

  • Economic Risk
  • Commercial Risk and Financial Risk
  • Concessions, Franchises and Key Contracts
  • Regulatory and Political Risk
  • Terrorism, Pandemic and Natural Disasters

For greater detail, please refer to page 142 of the Company's 2019 Annual Report, a copy of which is available on the Company's website at www.jardines.com.

Responsibility Statement

The Directors of the Company confirm to the best of their knowledge that:

  1. the condensed financial statements have been prepared in accordance with IAS 34; and
  2. the interim management report includes a fair review of all information required to be disclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority of the United Kingdom.

For and on behalf of the Board

John Witt

Y.K. Pang

Directors

Dividend Information for Shareholders

The interim dividend of US¢10.50 per share will be payable on 14th October 2020 to shareholders on the register of members at the close of business on 21st August 2020. The shares will be quoted ex-dividend on 20th August 2020 and the share registers will be closed from 24th to 28th August 2020, inclusive. The dividend will be available in cash with a scrip alternative.

Shareholders will receive their cash dividends in United States Dollars, except when elections are made for alternate currencies in the following circumstances.

Shareholders on the Jersey branch register

Shareholders registered on the Jersey branch register will have the option to elect for their dividends to be paid in Sterling. These shareholders may make new currency elections for the 2020 interim dividend by notifying the United Kingdom transfer agent in writing by 25th September 2020. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing on 30th September 2020.

Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in Sterling only as calculated above.

- more -

Page 38

Dividend Information for Shareholders (continued)

Shareholders on the Singapore branch register who hold their shares through The Central Depository (Pte) Limited ('CDP')

Shareholders who are on CDP's Direct Crediting Service ('DCS')

For those shareholders who are on CDP's DCS, they will receive their cash dividends in Singapore Dollars unless they opt out of CDP Currency Conversion Service, through CDP, to receive United States Dollars.

Shareholders who are not on CDP's DCS

For those shareholders who are not on CDP's DCS, they will receive their cash dividends in United States Dollars unless they elect, through CDP, to receive Singapore Dollars.

Shareholders on the Singapore branch register who wish to deposit their shares into the CDP system by the dividend record date, being 21st August 2020, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar, by no later than 5.00 p.m. (local time) on 20th August 2020.

About Jardine Strategic

Jardine Strategic is a holding company which makes long-term strategic investments in multinational businesses, particularly those with an Asian focus, and in other high quality companies with existing or potential links with the Group. Its principal attributable interests are in Jardine Matheson (58%), Hongkong Land (50%), Dairy Farm (78%), Mandarin Oriental (78%) and Jardine Cycle & Carriage (75%), which in turn has a 50% interest in Astra. It also has minority interests in Greatview Aseptic Packaging and Zhongsheng. Jardine Strategic is 85% held by Jardine Matheson.

The Group companies operate in the fields of motor vehicles and related operations, property investment and development, food retailing, health and beauty, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining, energy and agribusiness.

Jardine Strategic Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. The Company's interests are managed from Hong Kong by Jardine Matheson Limited.

- end -

For further information, please contact:

Jardine Matheson Limited

Graham Baker

(852) 2843 8218

Brunswick Group Limited

David Ashton

(852) 3512 5063

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

Disclaimer

Jardine Strategic Holdings Ltd. published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 10:55:12 UTC


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Financials (USD)
Sales 2020 27 113 M - -
Net income 2020 954 M - -
Net Debt 2020 11 047 M - -
P/E ratio 2020 16,1x
Yield 2020 1,26%
Capitalization 15 350 M 15 350 M -
EV / Sales 2020 0,97x
EV / Sales 2021 0,86x
Nbr of Employees 464 000
Free-Float 15,1%
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 3
Average target price 32,17 $
Last Close Price 27,39 $
Spread / Highest target 33,3%
Spread / Average Target 17,4%
Spread / Lowest Target -5,07%
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Managers and Directors
NameTitle
John Raymond Witt Managing Director & Director
Benjamin William Keswick Executive Chairman
Graham Timothy Baker Chief Financial Officer
Edward Percy Keswick Weatherall Non-Executive Director
Anthony John Liddell Nightingale Non-Executive Director
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