SINGAPORE (Feb 28): Jardine Strategic Holdings and Jardine Matheson Holdings, both members of the Jardines group of companies, reported 57% and 56% lower FY18 earnings of US$1.84 billion and US$1.73 billion respectively.

However underlying net profit for Jardine Strategic and Jardine Matheson were up 14% to US$1.78 billion and 10% to US$1.7 billion respectively compared with the prior year.

These were supported by strong performances from Astra and Hongkong Land, as well as an improved performance from Jardine Cycle & Carriage’s non-Astra businesses, while Jardine Pacific, Jardine Motors and Dairy Farm were relatively flat against the prior year.

2018 revenues for Jardine Strategic and Jardine Matheson were up 11% and 10% to US$34.1 billion and US$42.5 billion respectively. Gross revenue, which included 100% of associates and joint ventures, rose by 11% to US$92.3 billion.

Non-trading items for the year for each group included share of net gain in property valuations – mainly arising from Hongkong Land’s investment properties in Hong Kong – offset by share of a restructuring charge in respect of Dairy Farm’s Southeast Asia Food business and a net loss due to unrealised fair value losses related to non-current investments.

Within Jardine Matheson’s directly-held businesses, Jardine Pacific saw higher contributions from Jardine Schindler and JEC, and a steady performance at Gammon. Jardine Motors’ business in Hong Kong and Macau produced steady earnings, but weaker performances were recorded in mainland China and the United Kingdom. Jardine Lloyd Thompson delivered both revenue and profit growth, with particularly good organic growth in its Global Specialty division.

Within the group's wider busineses, Hongkong Land achieved a second consecutive year of record underlying profit which was up 9% to a record US$1.04 billion on strength from investment properties. The contribution from development properties in mainland China was broadly in line with last year, while higher profits were recognised in Singapore.

Dairy Farm posted a 4% rise in sales to US$11.7 billion while underlying profit rose 5% to US$424 million, benefitting from particularly strong results from the Health and Beauty business and higher contribution from Convenience stores. But these were offset by further deterioration in performance from the Food business led by the supermarket and hypermarket formats.

Net non-trading charge totalled US$332 million which included a US$453 million restructuring charge for the Food business in Southeast Asia but was partially offset by a net gain of US$121 million principally in relation to business and property disposals. Following the completion of a detailed strategic review, it was concluded that Southeast Asia Food was not viable in its current form.

Mandarin Oriental delivered a good performance for the year, notably in Hong Kong and Singapore. Underlying profit rose 10% to US$65.1 million while combined total revenue of hotels under management rose 1% to US$1.4 billion.

Jardine Cycle & Carriage’s underlying profit attributable to shareholders rose 12% to US$858 million, but earnings fell by 55% to US$420 million, after accounting for net non-trading losses of US$438 million, principally unrealised fair value losses related to non-current investments. Astra’s contribution to underlying profit of US$719 million was up 15%.

In its outlook, the Jardines group expects to face more challenging conditions in 2019 due to economic uncertainties affecting consumer sentiment and commodity prices.

The board is recommending a final dividend of US$1.28 per share for Jardine Matheson, giving a full-year dividend of US$1.70 per share, up 6% from last year. For Jardine Strategic, a final dividend of 24 US cents per share was proposed, giving a full-year dividend of 34 US cents per share, up 6% from the prior year.

On Thursday, Jardine Matheson closed US$2.67, or 3.8% lower at US$68.56 while Jardine Strategic fell 75 US cents, or 1.9%, to close at US$39.50.