Chairman's Statement

Overview

The Group’s underlying net profit attributable to shareholders for the first half of 2024 was US$550 million, 33% below the same period last year. This significant drop principally reflected a weaker contribution from Hongkong Land, mainly due to non-recurring impairments taken against certain development projects on the Chinese mainland.

The Group’s underlying profit before the impairments at Hongkong Land was down 14% (9% at constant exchange rates). This more modest drop reflected:

• expected headwinds from lower commodity prices at Astra and lower new car margins on the Chinese mainland; and
• marginally lower underlying profits in most other businesses amid challenging conditions; partially offset by
• significantly improved performance at DFI Retail.

Underlying earnings per share decreased by 33% to US$1.91.

The Group recorded a net non-trading loss attributable to shareholders in the first half of US$590 million, mainly as a result of net fair value losses on investment properties, compared with a net non-trading loss of US$257 million in the first half of 2023. The Group recorded a loss attributable to shareholders for the period of US$40 million, compared with a net profit of US$566 million in the first half of 2023.

Dividend

The Board has announced an interim dividend of US$0.60 per share, unchanged from the prior year.

Significant Developments

The Group continued to progress its strategic objectives in the first half of the year.

Evolving the Group Portfolio

The continuing evolution of the Group's portfolio is crucial to ensuring the long-term growth and sustainability of our business. We allocate capital towards strategic growth initiatives, both at the Group level and within our Group companies, while divesting non-strategic and lower yielding assets.

In June 2024, Hongkong Land announced a US$1 billion transformation project for the LANDMARK retail portfolio in the heart of Hong Kong. The project combines a US$400 million investment by Hongkong Land with an estimated US$600 million investment from the group’s retail tenants – including premier global luxury brands – and reflects the Group’s confidence in the future of Hong Kong as a luxury retail, lifestyle and financial hub.

Mandarin Oriental achieved the topping-out of One Causeway Bay, its Grade A office development, during the first half of the year. The project is due to be completed by the second quarter of 2025. Mandarin Oriental continued to execute its strategy, opening four new hotels and bringing the total number of hotels under its management to 40.

The Group continued to simplify its portfolio in the period, by divesting a number of businesses which were no longer aligned to its strategic objectives. The disposal of the Group’s 50% shareholding in Jardine Aviation Services was completed in March 2024. DFI Retail completed the sale of its Hero supermarket business in Indonesia in June 2024. In the first half Mandarin Oriental sold its Paris hotel and adjoining retail interests.

During the period, the Group increased its shareholdings in Mandarin Oriental (in which it now has an 85% interest) and Jardine Cycle & Carriage (‘JC&C’) (in which it now has an 83% interest). JC&C also launched a public tender offer to increase its shareholding in REE Corporation in Vietnam, subject to regulatory approval.

Driving Innovation and Operational Excellence

Many of the Group’s companies made strong progress in the period in driving greater efficiency and productivity in their businesses, with a positive impact on results.

Our businesses are exploring the opportunities presented by Generative AI, and in the first half of the year they all developed policies, to ensure a consistent approach to this rapidly developing area. Many of our businesses introduced secure GenAI environments and tested the technology in areas including marketing and customer engagement, and there was also a focus on enhancing productivity, by making policies and procedures simpler and easier to carry out.

Mandarin Oriental is modernising its systems and processes to support evolving business needs, by implementing a new Guest Experience Programme, which will greatly improve the group’s ability to recognise, understand and engage guests, while a redesign of Fans of M.O. will enhance Mandarin Oriental’s ability to attract and retain guests.

DFI Retail has relaunched its Wellcome app and website in Hong Kong and will be refreshing and relaunching apps for its other major brands in the second half of the year. The group has also expanded click-and-deliver and click-and-collect service coverage in its Food and Convenience networks, while the yuu Rewards programme continues to grow, with close to 3 million monthly active members in Hong Kong, and 1.7 million members in Singapore. DFI Retail has a strong focus on leveraging the rich data from the loyalty programme to enhance in-store operations, particularly in areas such as improving range and assortment.

The implementation of an in-house Global Business Services function has continued, supporting the Group’s businesses with process-based back-office services for Finance, IT and People and Culture functions. DFI Retail, JEC, Jardine Restaurant Group, Zung Fu and Jardine Matheson are now all leveraging this service, which delivers economies of scale, and accelerates transformation by allowing our businesses to focus more on strategic, value adding activities.

Our businesses continue to seek new inorganic growth opportunities in the digital economy, emerging industries and new geographies. This is well illustrated by Astra’s partnership with Equinix, one of the world’s largest digital infrastructure companies, to develop data centres in Indonesia, as well as United Tractors’ acquisition of interests in Supreme Energy Sriwijaya, Nickel Industries and Stargate.

Driving Leadership and Entrepreneurialism

Attracting, developing and retaining exceptional leaders is a key priority for the Group and its businesses and is critical to achieving our strategic ambitions. Over the last 12 months, we have strengthened the boards and the executive management teams of our listed subsidiaries. New chief executive officers have been appointed at DFI Retail, Hongkong Land, Mandarin Oriental and Jardine Pacific and, on 28 June 2024, DFI Retail announced the appointment of Tom van der Lee as Group Chief Financial Officer with effect from 1 October 2024, succeeding Clem Constantine, who is retiring.

With these changes, we have also clarified lines of accountability. The executive teams of our companies are fully responsible for creating and executing their business strategy and delivering on performance. These executive teams are directly accountable to their company boards, which provide challenge, support and guidance – bolstered by extensive industry specific expertise from independent non-executive directors.

As an engaged significant shareholder in its businesses, Jardines will drive long-term growth and value creation through its representatives on its company boards. Our focus in each of our companies will continue to be on critical areas: strategy and performance, balance sheet strength and capital investments, senior talent and succession, and sustainability.

The reframing of the Group’s relationship with its businesses will see individual businesses take primary accountability for supporting the development of their colleagues as a whole. Jardines will refocus its efforts to support key executives across our businesses in developing them according to their potential and ambitions. This will include encouraging increased accountability and introducing suitable long-term reward structures. We will also continue to promote a work environment that is diverse and inclusive.

Progressing Sustainability

Sustainability is a key driver of the Group’s strategy: it underpins our continuing focus on making the Group stronger for the future and is a key element of our businesses’ licence to operate. The Group and its businesses continued to progress their sustainability agendas during the period, and most of our businesses published sustainability reports in the first half of the year.

Jardines published its annual Sustainability Report at the end of May 2024, highlighting the strong progress made by the Group’s businesses in 2023. In the area of Climate Action, all subsidiaries have developed scope 1 and 2 decarbonisation targets and pathways to 2030, most of which are 1.5°C-aligned. Our businesses have started to implement their decarbonisation pathways and are already seeing lower GHG emissions, as well as an increasing proportion of total energy consumption coming from renewable sources.

Under Responsible Consumption, our businesses have focussed during the period on reducing waste, by strengthening waste management and exploring circular solutions to transform waste into valuable resources. Across the Group, the level of waste generated has fallen by 4% since 2022, with 94% of waste now diverted, and 25% less waste disposed of than in 2022.

Within the context of a focus on long-term growth, many of our businesses are actively participating in initiatives which support social inclusion. There is a particular focus on promoting education and health initiatives. Our businesses have enhanced learning and development opportunities for colleagues and the Group and several businesses have continued to provide valuable financial support for students from less affluent backgrounds to access higher education. There is also a strong focus on advocacy for greater awareness of mental health and significant investment in mental health support. The Group’s investment in positive changes to livelihoods and building stronger communities totalled US$64 million in 2023.

Our colleague volunteering programme aims to facilitate participation by colleagues across our Group companies in a range of social inclusion and other activities. The programme continued to gather momentum over the past year, with over 95,000+ volunteer hours contributed to the community in 2023.

The Group operates some businesses in Indonesia which are the focus of stakeholders in relation to environmental and biodiversity-related issues. We believe that our businesses are taking appropriate and extensive steps to protect nature and biodiversity and the environment, while at the same time supporting the communities where they operate. This was demonstrated by the announcement, in July 2024, of the application by Astra Agro Lestari, which operates the Group’s palm oil business, to join the Roundtable on Sustainable Palm Oil (‘RSPO’). RSPO is the pre-eminent global organisation focussed on developing universal standards for sustainable palm oil.

Governance

As previously announced, the Company appointed Dr Keyu Jin as an Independent Non executive Director with effect from 31 January 2024, supporting our aim of enhancing our approach to governance and our ambition to increase the breadth and diversity of experience and backgrounds on the Company’s board.

Anthony Nightingale stepped down from the Board and Audit Committee of the Company with effect from 31 January 2024, and YK Pang and David Hsu stepped down from the Board of the Company with effect from 31 March 2024. We thank Anthony, YK and David for their significant contributions to the Group over many years.

As part of the ongoing enhancements to the Group’s governance approach, a number of changes were announced by Mandarin Oriental and DFI Retail on 16 July 2024. These changes ensure that the composition and operation of the board of each company are further strengthened and that the Group has clearly defined shareholder representatives on each board. The changes will also enhance the effectiveness of remuneration and nominations committees and ensure that there are clear responsibilities for reporting to the Jardine Matheson Board.

Outlook

We continue to expect the Group’s full-year results to be modestly below those of 2023. The Group has a strong balance sheet and under leadership strengthened by new CEOs in four of its portfolio companies, will focus on delivering sustainable long-term value and growth from its growing markets in Asia.

Ben Keswick, Executive Chairman 

Click here for the full announcement. 

^{* The Group uses ‘underlying profit’ in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 7 to the condensed financial statements. Management considers this to be a key measure which provides additional information to enhance understanding of the Group’s underlying business performance.
# At 30 June 2024 and 31 December 2023, respectively. Net asset value per share is based on the book value of shareholders’ funds.
Ω The 2023 financials have been restated for comparability with IFRS 17 restatements made in the 2023 Annual Report.  
The interim dividend of US$0.60 per share will be payable on 16 October 2024 to shareholders on the register of members at the close of business on 23 August 2024 and will be available in cash with a scrip alternative.}