Jardine Matheson profits crashed 56% to US$1.73b in 2018

It was hit by restructuring charges from Dairy Farm’s Southeast Asia Food business.

Jardine Matheson’s profits fell 56% from US$3.94b in 2017 to US$1.73b in 2018. According to its financial statement, revenue grew 10% from US$38.75b to US$42.53b.

Net profit included JMH’s US$613m share of the net gain in property valuations – principally arising from Hongkong Land’s investment properties in Hong Kong – offset by the Group’s US$296m share of a restructuring charge in respect of Dairy Farm’s Southeast Asia Food business and a net loss of US$316m due to unrealised fair value losses related to non-current investments.

Jardine Pacific saw higher contributions from Jardine Schindler and JEC, and a steady performance at Gammon, offset by weaker performances by Jardine Restaurants and HACTL. Jardine Motors’ business in Hong Kong and Macau produced steady earnings, but weaker performances were recorded in mainland China and the United Kingdom.

The contribution from development properties in mainland China to Hongkong Land was broadly in line with last year, whilst higher profits were recognised in Singapore.

At Dairy Farm, the structural challenges in Food continued to erode performance at an increased rate. “Results in 2018 benefitted from particularly strong results from the Health and Beauty business and an increased contribution from Convenience stores, which were offset by further deterioration in performance from the Food business led by the supermarket and hypermarket formats,” said JMH chairman and managing director Ben Keswick.

“A significant (largely non-cash) restructuring charge was incurred in respect of the Southeast Asia Food business following the completion of a detailed strategic review, which concluded that Southeast Asia Food was not viable in its current form,” Keswick added.

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The board proposed a final dividend of US$1.28 per share, which produces a full-year dividend of US$1.70 per share, up 6% from the prior year.