Jardine Cycle & Carriage posts higher profit for year

The Cycle & Carriage (Mercedes Benz) showroom in Alexandra Road. Jardine Cycle & Carriage's Singapore motor operations saw earnings grow by 26 per cent last year, due partly to a 45 per cent rise in passenger car sales.
The Cycle & Carriage (Mercedes Benz) showroom in Alexandra Road. Jardine Cycle & Carriage's Singapore motor operations saw earnings grow by 26 per cent last year, due partly to a 45 per cent rise in passenger car sales.ST FILE PHOTO

Underlying net profit hits $955m even as turnover remains flat; group expects rosier outlook

Diversifed Jardine Cycle & Carriage has posted a 7 per cent rise in underlying net profit to hit US$679 million (S$955 million) for the year ending Dec 31, last year, even as its revenue remained flat.

The Singapore-based, Indonesia-reliant motor, plantations and finacing group recorded a turnover of US$15.76 billion, little changed from its restated 2015 revenue of US$15.7 billion.

Its underlying earnings per share was up 3 per cent at 172 US cents, after accounting for a rights issue in 2015. Net asset value per share stood at US$14.56, up 11 per cent.

Profit attributable to shareholders was bolstered by a US$23 million gain from a property sale and valuation of investment properties.

Most of the group's core businesses fared better, offsetting higher loan provisions at Permata Bank, which is 45 per cent owned by Indonesian subsidiary Astra International. The bank reported a net loss of US$486 million, versus a net income of US$18 million in 2015.

  • AT A GLANCE

  • REVENUE: US$15.76 billion (unchanged)

    UNDERLYING NET PROFIT: US$679 million (+7%)

    FINAL DIVIDEND PER SHARE: 56 US cents (+9.8%)

Astra's contribution to JC&C's underlying profit was 6 per cent higher at US$500 million. Astra's car sales were 16 per cent higher at 591,000 units, resulting in an increase in market share from 50 to 56 per cent.

As for motorcycles, Astra Honda Motor's domestic sales were 2 per cent lower at 4.4 million units, but its market share grew from 69 to 74 per cent.

JC&C's direct motor interests - including its multi-brand agencies in Singapore - contributed US$167 million, or 18 per cent more than in 2015.

Other interests contributed 11 per cent higher at US$33 million.

Singapore motor operations saw earnings grow by 26 per cent to US$49 million due to a 45 per cent increase in passenger car sales to 12,500 units, together with improved contributions from used cars and parts.

Its passenger car market share saw a slight decline from 15 per cent to 14 per cent.

The group's net cash, excluding borrowings within Astra's financial services subsidiaries, increased to US$709 million at the end of last year, up from US$255 million at the end of 2015, on the back of Astra's operating cashflows. Net debt within Astra's financial services subsidiaries was US$3.6 billion, compared to US$3.2 billion at the end of 2015.

JC&C's net cash was US$154 million, compared to US$136 million at the end of 2015.

Directors are recommending a final dividend of 56 US cents per share, up from 51 US cents in 2015. Together with its interim dividend, the payout totalled 74 US cents, up from 69 US cents previously.

Looking ahead, the group expects a rosier outlook this year.

Chairman Ben Keswick said: "The outlook for 2017 appears positive as Astra should benefit from improving economic conditions in Indonesia and higher coal prices, while the group's direct motor interests and other interests are expected to perform satisfactorily."

Mr Keswick also attributed last year's results to "the commitment and hard work" of its 240,000 employees across the region.

A version of this article appeared in the print edition of The Straits Times on February 28, 2017, with the headline 'Jardine Cycle & Carriage posts higher profit for year'. Print Edition | Subscribe