Jardine Matheson slides into full-year net loss of US$394m

JARDINE Matheson Holdings (JMH) on Thursday reported a full-year net loss of US$394 million, reversing from a net profit of US$2.84 billion a year ago, largely due to weaker performances by Astra and Jardine Cycle & Carriage, as well as decreases in property valuations.

Without the decreases in property valuations totalling some US$1.4 billion, the group would have recorded a US$1.09 billion net profit for the year ended Dec 31, 2020, 32 per cent lower than the year ago.

Astra, one of JMH's largest profit contributors, recorded full-year net profit of 16.2 trillion rupiah (S$1.47 billion) which is 26 per cent lower than that for FY2019. Excluding a one-off gain from the sale of the group's investment in Permata Bank, net profit would have decreased 53 per cent year on year to 10.3 trillion rupiah.

This was mainly due to weaker performances by its automotive, heavy equipment and mining, and financial services divisions, as a result of the impact of the pandemic and related containment measures, JMH said.

Similarly, Jardine Cycle & Carriage's net profit was US$540 million, 39 per cent lower than the same period last year. Among other factors, this was due to lower contributions from Astra; the group also recorded an impairment loss of US$182 million in respect of its investment in Siam City Cement, "reflecting several years of challenging market conditions".

JMH group managing director John Witt said that the group's performance in the first part of 2021 is expected to be affected in particular by the continuing headwinds faced by its businesses in South-east Asia and the ongoing low levels of Chinese mainland and other visitors to Hong Kong. "There is continued robust economic activity on the Chinese mainland, but it is uncertain whether this will be maintained," he added.

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JMH also noted that its gearing has come down to 6 per cent, from 7 per cent at the end of December 2019. However, the group will take on additional debt in order to acquire the roughly 15 per cent of Jardine Strategic Holdings (JSH) shares it does not already own, sending its gearing up from the current 6 per cent to 16 per cent upon the completion of the acquisition.

Earlier this week, JMH had announced that it would delist JSH, its next largest unit, in a US$5.5 billion buyout deal to simplify its structure.

Separately on Thursday, JSH announced a full-year net loss of US$863 million, reversing from a net profit of US$2.18 billion a year ago. 

This worked out to a loss per share of US$1.54, versus earnings per share of US$3.86 previously. 

Shares of JMH closed up 1.25 per cent at US$65.57 on Thursday, while shares of JSH closed up 0.15 per cent at US$32.86.