Jardine C&C shares slump on earnings miss; 'slower growth' outlook

SINGAPORE - Jardine Cycle & Carriage shares fell as much as 10.7 per cent on Thursday (Feb 28) after full-year earnings missed street estimates.

On Wednesday evening, the group reported a core profit of US$858 million ($1.16 billion) for 2018, up 11.5 per cent from 2017. The shares last changed hands at S$33.30 as at 3.28pm, down $3.33 or 9.09 per cent.

In its outlook statement, chairman Ben Keswick cautioned that Jardine C&C's main profit contributor, Astra International "is likely to face a number of macroeconomic and commercial headwinds in 2019, while the group's direct motor interests and other strategic interests may also see slower growth".

Astra is South-east Asia's largest automotive group. It contributed US$718.7 million to Jardine C&C's bottom line in 2018, up 15.5 per cent from 2017.

But net income from Astra's automotive division dipped 4 per cent to US$597 million, owing to lower operating margins despite higher automotive sales.

The group said: "The wholesale market for cars was 7 per cent higher in the year compared to 2017 at 1.2 million units. Astra's car sales were 1 per cent higher at 582,000 units, but increased competition resulted in a decline in market share from 54 per cent to 51 per cent."

Meanwhile, the wholesale market for motorcycles increased by 8 per cent to 6.4 million units. Astra Honda Motor's domestic sales rose by 9 per cent to 4.8 million units, with its market share stable at 75 per cent.

Jardine C&C also has a regional automotive presence through its direct motor interests, which contributed US$144.6 million to core earnings for 2018, up 19.2 per cent from 2017.

Under this division, wholly owned unit Cycle & Carriage Singapore is one of the leading automotive groups in Singapore.

Though Cycle & Carriage Singapore's earnings grew 8 per cent to US$62 million last year on improved margins, passenger car sales fell 7 per cent to 13,300 units.The Singapore passenger car market fell by 13 per cent to 80,300 units, following a decrease in the number of certificates of entitlement issued, the group said. Still, the group's passenger car market share improved from 16 per cent to 17 per cent, it said.