Hong Kong-based conglomerate Jardine Matheson has reported FY2022 earnings of US$354 million, down 81% from FY2021. However, its underlying earnings, which the company says is a more accurate measurement of its operational performance, was up slightly by 5% to US$1.58 billion.
Revenue in the same period was up 5% to US$37.7 billion; total revenue including the total generated by its various associates and joint ventures, similarly grew by 5% to US$114.8 billion.
In its earnings commentary, Jardine Matheson calls its FY2022 set of results a "strong" one, given how much of its core interests, operating out of Hong Kong and mainland China, were still "materially" impacted by pandemic-related restrictions.
"This is a testament to the value of the group’s diversified portfolio, as well as the resilience which our businesses has," says chairman Ben Keswick.
"The group is likely to continue to face challenges in the coming year from global economic headwinds, but it is well-positioned to take advantage of opportunities, as our key markets in Southeast Asia and China return to growth following their emergence from the pandemic," he adds.
According to Jardine Matheson, a key driver of the improvement was its stake in Indonesia-based conglomerate Astra, held via its separately-listed subsidiary Jardine Cycle & Carriage.
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Mandarin Oriental, the hotel arm, enjoyed better operations but other larger units, real estate arm Hongkong Land and retail unit DFI Retail Group reported results that were "materially lower".
Jardine Matheson plans to pay a final dividend of US$1.60 per share, bringing its full-year payout to US$2.15, up 8% over FY2021.
In its separate earnings announcement on March 2, Hongkong Land Holdings has returned back to the black, with earnings of US$203 million for FY2022, versus a loss of US$349 million.
However, its underlying earnings, which the company says is a more accurate measurement of its performance, dropped 20% to US$776 million.
The company, which is known for its portfolio of commercial estates in prime Hong Kong neighbourhoods, has maintained a final dividend at 16 US cents per share, bringing the full-year payout to 22 US cents.
While rental rates of its office properties in Hong Kong dropped, the company managed to lower its operating costs correspondingly.
Hongkong Land continues to acquire land for development, including a 49% interest in a residential site in the Jalan Tembusu area in Singapore, with a total developable area of 60,000 sqm., which is expected to be completed by 2025.
In total, it has an attributable developable area under development across all projects of some 4.9 million sqm.
Its NAV, as at Dec 31 2022, was US$14.95, slightly lower from US$15.05 as at end 2021.
"Results in 2023 will principally depend on the pace of recovery of the property sector on the Chinese mainland. Stable contributions are expected to continue from the group’s investment properties business, although rental reversions for the Hong Kong office portfolio are expected to remain negative," says Keswick.
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"The extent of improvement in performance from the development properties business will depend on policy support measures implemented on the Chinese mainland," he adds.
The recovery in the regional travel industry is apparent on Mandarin Oriental’s FY2022 results, where losses narrowed to US$49.5 million from US$141.4 million in the preceding FY2021.
Revenue in the same period grew by 43% to US$454.1 million, while the combined total revenue of hotels under management surged by 49% to US$1.6 billion.
While the company's hotels largely enjoyed recovery during the year, its properties in Hong Kong and Tokyo - cities that did not reopen as earlier - weighed down on the results.
The company has two new hotels and two new residences opened and seven new projects announced.
"The group expects to see a strong improvement in its results in 2023, particularly as restrictions in East Asia continue to ease," says Keswick.
"With a robust pipeline of new developments and a globally recognised brand, we also remain confident in the long-term success of the group," he adds.
DFI Retail Group, which has been struggling for years, has reported a loss of US$115 million for FY2022, versus earnings of US$103 million recorded for the preceding year ended Dec 31 2021.
Revenue in the same period dipped by 1% to US$27.6 billion, as the grocery chain, supermarket, and F&B outlet operator continued to feel the weight of the pandemic.
The company plans to pay a final dividend of 2 US cents, bringing full-year payout to 3 US cents, versus 9.5 US cents paid in the preceding FY2021.
While the full-year numbers ended in the red, DFI notes that there has been a "substantial improvement" in profitability in its 2HFY2022, with so-called underlying profit of US$80 million for the period, compared with an underlying loss of US$52 million in the first half.
DFI says that besides the pressures from the pandemic, it has been investing in new digital capabilities that are "required to meet customers’ evolving needs and to drive long-term shareholder value."
"The group’s overall results will largely depend on the recovery in Hong Kong of its health and beauty and restaurants businesses, and an improved performance by its associate Yonghui on the Chinese mainland," says Keswick.
"We remain confident in the medium- to long-term growth prospects of the group," he adds.
On Feb 28, Jardine Cycle and Carriage reported earnings of US$252.3 million for 2HFY2022, down 42% y-o-y. While revenue increased by 18% to US$11.1 billion, the company incurred higher cost of sales too.
For the whole of FY2022, the company reported earnings of US$739.8 million, up 12% y-o-y. Revenue for the year was up 23% to US21.8 billion.
Jardine C&C plans to pay a full-year dividend of 111 US cents, up 39% over the amount paid for FY2021. Its NAV, as at Dec 31 2022, dipped slightly by 3% to US$18.07.
The company holds interests in other companies operating in industries ranging from heavy equipment to mining to construction and energy. Net income from this division, in particular, enjoyed a gain from US$427 million to US$850 million, buoyed by higher coal prices.
Astra, Jardine CYC’s key Indonesia-based subsidiary, achieved a record profit of its own as it rode on the country’s strong economic recovery and higher commodity prices.
Other non-Astra interests made record contributions too, such as Thaco and Direct Motor.
Despite the healthy numbers, chairman Keswick prefers to stay cautious, warning of “challenges ahead” from the wider global economic outlook.
“We remain confident in the group’s prospects and it is well-positioned to achieve sustainable growth through the opportunities in southeast Asia,” he adds.
Jardine Matheson shares closed on March 2 at US$49.88, down 0.34%.
Hongkong Land closed at US$4.63, down 0.43%.
DFI Retail Group closed at US$3.24, up 1.57%.
Jardine C&C closed at $30.96, up 3.96%.
Mandarin Oriental last traded at US$1.90.
