Jardine Strategic Holdings Limited’s Latest Earnings: What You Need to Know

The investment-holding conglomerate Jardine Strategic Holdings Limited (SGX: J37) released its fiscal second-half results for the year ended 31 December 2014 last Friday.

As an investment-holding company, Jardine Strategic’s revenue and profit actually comes from the revenues and profits of the various companies of which it has a stake in. These companies include Hongkong Land Holdings Limited (SGX: H78), Dairy Farm International Holdings Ltd (SGX: D01), Mandarin Oriental International Limited (SGX: M04), and Jardine Cycle & Carriage Limited (SGX: C07).

With that, let’s move onto Jardine Strategic’s latest set of financials.

The conglomerate’s total revenue for the full-year inched up slightly by 2% year-on-year to US$62.78 billion while net profit advanced by a bigger amount of 8% to US$1.83 billion.

But despite the growth in net profit, Jardine Strategic’s underlying profit (a “key measure” that the firm’s management uses to enhance understanding of the company’s underlying business performance; underlying profit removes the effects of non-trading items) had inched down very slightly from US$1.616 billion in 2013 to US$1.613 billion.

Let’s dig into each individual company for a quick look at how they fared.

Hongkong Land

On the whole, Hongkong Land saw its revenue and net profit grow by 1% and 12% respectively for 2014; revenue came in at US$1.8 billion for the year while profit was at US$1.3 billion.

As my colleague Chin Hui Leong wrote, Hongkong Land’s “business can be segmented into the commercial office rental market and residential real estate development.”

In 2014, Hongkong Land’s commercial properties in Hong Kong had experienced growth in average rent as well as a decrease in vacancy rates. In Singapore, Hongkong Land’s vacancy rates had inched up, but they had done so from a very low base – the company’s commercial properties in Singapore have a vacancy rate of just 1.4% 1.7% at end-2014.

Dairy Farm

Pan-Asian retailer Dairy Farm managed to eke out a 4% gain in underlying profit on the back of a 6.3% increase in revenue. The company’s revenue increase was driven by broad-based growth across all its segments, namely Food (Supermarkets, hypermarkets, and convenience stores), Health and Beauty, Home Furnishings, and Restaurants.

Mandarin Oriental

Hotelier Mandarin Oriental saw its net profit for 2014 inch up by 4% to US$97 million from US$96 million seen a year ago..

Mandarin Oriental had experienced “challenging conditions in some markets,” but “resilient demand from the leisure sector” and the geographic diversity of the firm’s portfolio of hospitality assets had gone some way in helping the firm maintain its profitability.

Jardine Cycle & Carriage

Jardine Cycle & Carriage derives the bulk of its revenue and profit (more than 90%) from Indonesia-based conglomerate Astra; Jardne Cycle & Carriage owns just over 50% of Astra.

In 2014, Jardine Cycle & Carriage’s s underlying profit declined 11% to US$793m mainly due to Astra’s lower earnings and a weaker Indonesian rupiah in relation to the U.S. dollar.

Wrapping things up

Sir Henry Keswick, Chairman of Jardine Strategic, had the following comments about the firm’s latest results and possible fuure:

“While a number of our businesses continue to face difficult markets as regional economies remain under pressure, most are trading well. With our Group companies well financed and possessing significant opportunities for growth, we continue to view the future with confidence.”

Jardine Strategic had declared a final dividend of US$0.19 per share, which adds up to a total dividend of US$0.27 for 2014, up 6% from 2013’s dividend of US$0.255 per share.

Shares of Jardine Strategic last traded at US$35.35 on Friday. At that price, the conglomerate has a trailing PE (price to earnings) ratio of 11.7 and a dividend yield of 0.76% based on 2014’s total dividend.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool's free investing newsletter. Written by David KuoTake Stock Singapore tells you exactly what's happening in today's markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook  to keep up-to-date with our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.