Jardine Pacific

Strategic developments

Within our private JP group of companies, there has been a focus on portfolio simplification and turning round the group’s B2C businesses, as they lay the foundations for the next stage of their growth. Following the sale of Greatview in 2023, JP’s 50% stake in Jardine Aviation Services was sold in March 2024 and, in September 2024, Jardine Schindler disposed of its Taiwan lifts business.

Business performance

The JP group of companies reported underlying net profit of US$149 million, 9% lower than 2023. There were resilient performances by most businesses. JEC, Gammon and Hactl delivered improved profit compared with last year, Jardine Schindler saw a fall in profit. The group’s consumer businesses, however, continued to be affected by the weaker consumer market in Hong Kong, with Zung Fu particularly impacted and Jardine Restaurants recording a second year of losses (although lower than 2023).

JEC

Overall, JEC reported a better year with higher sales, despite lower gross margins. The Hong Kong businesses performed satisfactorily, although E&MC reported a loss due to challenges with one material project. JEC’s Thailand and Philippines businesses reported lower contributions, driven by lower sales. The Trane joint ventures performed well, while the initial contribution from Krueger, JEC’s newly acquired associate, was encouraging. JEC’s order book remained robust and orders secured, by value, rose 18%.

Gammon

Gammon performed well, driven by higher sales and good cost control. The Hong Kong airport projects continued to progress, and the order book improved in the year, benefitting in particular from new awards in the Building division and Singapore operations. Gammon’s operational improvement projects continued to deliver results.

Jardine Schindler

Jardine Schindler’s profit contribution was lower than last year, driven by additional cost provisions on specific projects in Hong Kong and Singapore, despite stronger sales and an overall increase in margins. The competitive environment made securing new orders challenging. The disposal of Jardine Schindler’s wholly-owned Taiwan business was completed in September and recorded as a net non-trading gain.

Hactl

Hactl reported a rise in profit, driven by higher cargo volume handled (especially exports), partially offset by increased staff costs. Hactl’s market share remains strong, and the business continued to focus on maintaining operational standards, despite the challenging labour environment. In line with the industry as a whole, the business continues to face labour shortages, although this challenge is lessening as the amount of imported labour increases.

Jardine Pacific’s consumer businesses continued to face difficult conditions.

Jardine Restaurants

Jardine Restaurants recorded a second year of losses, although at a lower level than last year, as its businesses in all markets faced a range of macro challenges. Both Pizza Hut and KFC Hong Kong are, however, seeing a gradual improvement in business, as sales recover and cost control tightens. The Taiwan operations faced increasing competition and the Vietnam businesses remained subdued.

Zung Fu

Zung Fu faced a challenging trading environment, reporting a net loss for the year. The changes in the tax concession on electric vehicles, which came into effect on 1 April 2024, adversely impacted the sales of both Mercedes (MB) and Hyundai passenger cars. As a result, both divisions saw fewer deliveries, and at lower margins, as the market adjusted to the impact of the tax change and stock clearance efforts progressed. Encouraging results were reported from Zung Fu’s new brands, smart and Denza. These brands, together with the improvement in MB aftersales, partially offset the weaker performances from the rest of the business.

Non-trading items

Jardine Pacific recorded a net non-trading loss of US$13 million in the year, compared to a net non-trading gain of US$23 million in 2023, as a result of a decrease in the fair value of investment properties, a goodwill impairment in respect of Pizza Hut Vietnam and a loss on the disposal of the group’s shareholding in Jardine Aviation, which was completed in March 2024, offset by a gain on the disposal of Jardine Schindler’s Taiwan business and the write-back of the closure costs in respect of Kloud in the Jardine Restaurants business.