Jardine forecasts mixed outlook for group units

One of Hong Kong's oldest conglomerates, Jardine Matheson Holdings, has predicted mixed prospects for its core business arms because of the hostile economic conditions.

The warning came even though the company reported a 14 per cent rise in underlying earnings to a record US$822 million last year.

Taking into account a deficit in property revaluation and non-trading items, attributable profit fell 64 per cent to US$666 million on a 14 per cent rise in revenue to US$36.15 billion last year. With the revaluation of properties - primarily from Hongkong Land, the biggest landlord in Central - the 177-year-old group realised a US$214 million fall in fair value of investment properties against a US$1.01 billion increase in 2007.

Jardine Matheson's bread and butter - 81 per cent-owned subsidiary Jardine Strategic, which in turn holds 53 per cent of Jardine Matheson, did well. Jardine Strategic's underlying earnings were up 19 per cent at US$859 million on the back of 14 per cent growth in revenue to US$36.15 billion last year.

Jardine Matheson chairman Henry Keswick stated yesterday that it was impracticable to predict the future, but some of the group's businesses were 'facing greater impact' than others from the deteriorating market conditions. He did not elaborate the statement.

Jardine, which operates Wellcome supermarkets, Mandarin Oriental hotels and air cargo services and sells Mercedes-Benz limousines in southern China, said retailing arm Dairy Farm was the group's best performer last year. Diary Farm's profit contribution to Jardine Matheson jumped 25.46 per cent to US$202 million last year. The conglomerate's Indonesia-based car distributor and financing arm, Astra, was the biggest profit contributor with earnings up 33.7 per cent at US$238 million.