Jardine Matheson warns of hard year despite profit rise
Pan-Asian conglomerate Jardine Matheson Holdings said underlying profit grew 15 per cent to US$533 million last year but warned it would be hard pressed to repeat the performance this year.
Including revaluations of US$815 million largely due to a change in the value of its property flagship Hongkong Land Holdings, Jardine's net profit rose 8 per cent to US$1.34 billion. Revenue climbed 36.57 per cent to US$16.28 billion.
Hongkong Land, supermarket and pharmacy operator Dairy Farm, luxury hotel group Mandarin Oriental and transport and restaurant arm Jardine Pacific performed strongly but car dealerships Jardine Cycle & Carriage and Astra were hit hard by inflation and interest rates in Indonesia.
'The Indonesian motor market has improved as interest rates are coming down quite fast from the sharp rises in 2005,' managing director Anthony Nightingale said. 'But following several earthquakes I won't be sounding too bullish on this market.'
Jardine Cycle & Carriage's underlying profit contribution tumbled 30.43 per cent to US$16 million while Astra's fell 20.47 per cent to US$101 million.
Hongkong Land, Central's biggest landlord, showed the best gains. Its profit contribution jumped 30.76 per cent to US$85 million. Dairy Farm, which operates 7-Eleven stores in southern China and Wellcome supermarkets, was the biggest contributor at US$131 million, or about 25 per cent of the parent's total.
Despite a comparatively smaller contribution from the mainland last year, Mr Nightingale expected healthy growth in China from sales of Mercedes-Benz cars, the opening of Mandarin Oriental hotels and new retail operations and property development in the next three to five years.
However, he dismissed suggestions that imminent management changes signalled a stronger push into the mainland market.
On April 1, Y.K. Pang, who chairs Jardine Matheson's mainland operations, will take on extra duties as chief executive of Hongkong Land, replacing Nicholas Sallnow-Smith. Dairy Farm regional director Michael Kok will be promoted to chief executive of the retail arm, replacing Ron Floto, who is retiring.
The appointments mean that for first time ethnic Chinese will be at the helm of the core Jardine units, said Mr Nightingale.
Jardine Strategic Holdings' underlying profit climbed 10 per cent to US$526 million while the firm's net profit rose 1 per cent to US$1.41 billion.