Jardine Matheson Holdings (JMH) says the group continued to face “challenging trading conditions” in the third quarter of 2020 due to the spread of Covid-19 and the ensuing measures taken to control it.
While the group registered “some improvement” in performance across its businesses compared to 2QFY2020, underlying net profits for the 3QFY2020 declined compared to 3QFY2019.
The group says it expects performance to remain weak for the remainder of the year amid the impact of Covid-19 on businesses and wider communities and the reduction of government support.
It adds that it is “resilient and well-positioned” to achieve its long-term growth objectives, and its balance sheet and liquidity position remain strong.
Of its businesses held directly by JMH, Jardine Pacific, which includes Jardine Restaurant Group’s Pizza Hut businesses in Hong Kong and Taiwan in its portfolio, saw an overall increase in earnings in 3QFY2020 compared to 2QFY2020.
Gammon’s order book “remained healthy” mainly due to the securing of the Hong Kong International Airport (HKIA) Terminal 2 expansion works project in August.
Other businesses saw weaker underlying trading performances.
JMH’s aviation services remained loss-making for the quarter due to the negative impact of the pandemic which saw low flight volumes.
Jardine Motors saw an improved performance q-o-q in 3QFY2020. Zung Fu China and Zhongsheng benefitted from a strong recovery in luxury new car sales after the lifting of shut down orders.
Hongkong Land, under Jardine Strategic (JSH), saw weaker overall performance particularly in relation to retail rent in the investment properties business, though contributions from the office portfolio remained stable during the quarter.
Dairy Farm, which oversees brands such as Guardian and Cold Storage, saw improvements q-o-q in 3QFY2020, although it remains negatively affected by the pandemic. Grocery retail performed strongly in North Asia, Singapore and Malaysia due to operational improvements and changing customer behaviours while performance in Indonesia was “significantly impacted” due to government restrictions.
Dairy Farm’s convenience and home furnishings businesses saw better performances q-o-q as well.
The group’s overall performance continued to be adversely affected by weaker results in its health and beauty segment. The latter was impacted by government restrictions in a number of markets and lack of overseas tourists in Hong Kong.
Mandarin Oriental also remains impacted by Covid-19 despite the reopening of all hotels in its portfolio. Business levels remain low in most locations due to national and regional pandemic restrictions.
Demand for city locations continue to be “modest” although performances from hotels on the Chinese mainland were “encouraging” during the quarter.
“A material recovery in business levels is not expected until the second half of 2021 at the earliest and the group will therefore report a substantial loss for the 2020 full year,” says the group.
While Jardine Cycle & Carriage saw some improvement q-o-q, its performance continued to be affected by challenging trading conditions, caused by weak business and consumer sentiment.
Astra reported higher 3Q earnings q-o-q, but says its businesses, especially its automotive, heavy equipment and mining and financial services divisions continue to be impacted by the pandemic and containment measures in Indonesia.
Shares in JMH closed 3 cents lower or 0.1% down at US$45.80, while shares in JSH closed 66 cents lower or 2.9% down at US$22. Shares in Jardine C&C closed 25 cents higher or 1.4% up at $18.25.
