Jardine Cycle & Carriage's Q1 net profit falls 20%

Challenging trading conditions across the region continued to pull down first-quarter earnings at conglomerate Jardine Cycle & Carriage.

Net profit for the three months to March 31 fell 20 per cent to US$140.6 million (S$189 million).

Revenue dipped 9 per cent to US$3.65 billion, compared with the same period a year earlier.

Jardine said yesterday: "The group's underlying profit in the first quarter declined primarily due to reduced earnings from Astra, which faced challenging market conditions in Indonesia."

Astra is a major automotive group in South-east Asia.

Jardine added that Astra's contribution was also affected when its rupiah profit was translated into United States dollars.

"The rupiah was, on the average, 5 per cent weaker than in the first quarter of the previous year," it said.

Astra posted a net profit equivalent to US$230 million, under Indonesian accounting standards, which was 22 per cent lower in its reporting currency.

This was on the back of the heavy equipment and mining, financial services and automotive businesses declining.

The firm said the overall automotive demand softened slightly during the period, which affected Astra, although a general reduction in discounts has led to some improvements in margin.


    US$140.6 million (-20%)

    US$3.65 billion (-9%)

    US$13.88 (+6%)

For instance, the wholesale market for cars fell 5 per cent to 267,000 units.

Astra's car sales were 7 per cent lower at 127,000 units, with its market share dropping a notch from 49 per cent to 48 per cent.

The group launched two new models and five revamped models during the period.

However, Jardine posted improved results from the group's direct motor interests, as Truong Hai Auto Corporation in Vietnam recorded a strong performance.

Its direct motor interests contributed an underlying profit of US$35 million, a 14 per cent increase over the previous year.

Truong Hai Auto Corporation benefited from significantly higher sales, partly offset by lower margins.

Jardine chairman Ben Keswick said: "In Indonesia, Astra is seeing soft automotive demand, weak commodity prices and a further deterioration in corporate credit quality in Permata Bank. In the group's other operating markets, increased competitive pressure is expected."

Quarterly earnings per share were 36 US cents, down from 48 US cents in the same period a year earlier.

Net asset value per share rose to US$13.88 as at March 31, compared with US$13.07 as at Dec 31.

Jardine shares closed 76 cents lower at $40.24 yesterday.

A version of this article appeared in the print edition of The Straits Times on April 29, 2016, with the headline 'Jardine Cycle & Carriage's Q1 net profit falls 20%'. Print Edition | Subscribe