Lifted by a US$672m profit, group eyes opportunities in China and Indonesia Jardine Matheson Holdings expects steady growth for the rest of the year after boosting net profit in the first six months and is eyeing expansion opportunities in China and Indonesia, according to managing director Percy Weatherall. 'We are cautiously optimistic about the immediate future as economies in Hong Kong, China and Indonesia where we operate are doing reasonably well,' he said. 'We are looking at modest growth in the balance of 2005.' In the first half, net profit jumped 49.33 per cent to US$672 million and earnings per share rose 54 per cent to 194.5 US cents. The interim dividend was raised 10 per cent to 9.35 US cents per share. Excluding non-recurring gains of US$440 million largely from asset divestments, the conglomerate's underlying net profit rose 17.76 per cent to US$232 million, propelled by a recovery in its retailing arm Dairy Farm International and strong growth in luxury hotel unit Mandarin Oriental International and Indonesian conglomerate Astra International. The biggest contributor was Singapore-listed motor trading and property developer Jardine Cycle and Carriage, which accounted for US$74 million, or 31.89 per cent, of underlying net profit. The contribution jumped 42.3 per cent due largely to affiliate Astra's stellar performance. Jardine's core unit, Hongkong Land Holdings - the biggest landlord in Central - benefited little from the rental boom in the first half. Its underlying net profit barely changed at US$105 million, against US$104 million previously, as 30 per cent of its leases were not due for renewal until next year. Dairy Farm, which operates Maxim's restaurants and bakeries, 7-Eleven convenience stores and Wellcome supermarkets, continued its recovery and contributed US$48 million to underlying net profit, up 27 per cent. 'Over the last three to four years, in Jardine Matheson there has been an element of recovery. Dairy Farm was recovering from a very low profit and continues to do well,' Mr Weatherall said. Jardine's profit growth disguised poor operating units Jardine Pacific, which has non-listed businesses in Asia, and insurance arm Jardine Lloyd Thompson. The underlying net profit contribution of Jardine Pacific slipped 23 per cent to US$38 million, dragged down largely by losses at the construction joint-venture Gammon. Gammon, which lost US$5 million, has fallen victim to a protracted contraction in Hong Kong's construction sector. 'Over the past 30 years, Gammon has undergone major downturns in the construction sector and we felt the real pain,' Mr Weatherall said. 'But we are looking at a profitable second half this year.' Jardine Matheson's parent, Jardine Strategic Holdings, recorded a 56 per cent rise in net profit to US$784 million. Underlying net profit surged 29 per cent to US$245 million. Underlying earnings per share rose 31 per cent to 40.26 US cents. Interim dividend was raised 4 per cent to 5 US cents per share.