Jardine Cycle & Carriage : JC&C 2019 First Quarter Financial Statements and Dividend Announcement

Financial Statements and Related Announcement::First Quarter Results

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FINANCIAL STATEMENTS AND RELATED ANNOUNCEMENT::FIRST QUARTER RESULTS

Issuer & Securities

Issuer/ Manager

JARDINE CYCLE & CARRIAGE LIMITED

Securities

JARDINE CYCLE & CARRIAGE LTD - SG1B51001017 - C07

Stapled Security

No

Announcement Details

Announcement Title

Financial Statements and Related Announcement

Date &Time of Broadcast

26-Apr-2019 17:16:52

Status

New

Announcement Sub Title

First Quarter Results

Announcement Reference

SG190426OTHRVODC

Submitted By (Co./ Ind. Name)

Jeffery Tan Eng Heong

Designation

Company Secretary

Description (Please provide a detailed description of the event in the box below - Refer to the Online help for the format)

Please see attachment.

Additional Details

For Financial Period Ended

31/03/2019

Attachments

JCC_Q12019_Final.pdf

Total size =598K MB

https://links.sgx.com/1.0.0/corporate-announcements/52WZLNEC0TUKUL6M/497acc... 26/4/2019

26th April 2019

Jardine Cycle & Carriage Limited

239 Alexandra Road

Singapore 159930

Tel [phone] Fax [phone] [e-mail]

www.jcclgroup.com

JARDINE CYCLE & CARRIAGE LIMITED

2019 FIRST QUARTER FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

HIGHLIGHTS

∙Underlying earnings per share down 8%

∙Astra earnings increase by 5% in local currency terms

∙Lower contribution from non-Astra interests

"While Astra's earnings increased by 5% in local currency terms, the increase in its contribution to the Group was lower due to a weaker local currency this year compared with the first quarter of 2018. Earnings from the Group's non-Astra interests fell by 22% due to the timing of dividends from Vinamilk. Setting aside this impact of dividends from Vinamilk, the non-Astra interests would have shown 6% growth. For the rest of the year, Astra is expected to continue to benefit from higher contributions from its financial services and mining contracting businesses as well as its newly acquired gold mining business, but concerns remain over lacklustre demand and intense competition in the car market and weaker commodity prices. The Group's non-Astra interests are expected to show slower growth."

Ben Keswick, Chairman

26th April 2019

Group Results

Three months ended 31st March

	2019	Restated†	Change	2019
		2018
	US$m	US$m	%	S$m
Revenue	4,716	4,643	2	6,369
Underlying profit attributable to
shareholders #	201	219	-8	272
Non-trading items^	111	(84)	nm	150
Profit attributable to shareholders	312	135	131	422
	US¢	US¢		S¢
Underlying earnings per share #	51	55	-8	69
Earnings per share	79	34	131	107
	At	At		At
	31.3.2019	31.12.2018		31.3.2019
	US$m	US$m		S$m
Shareholders' funds	6,539	6,144	6	8,864
	US$	US$		S$
Net asset value per share	16.55	15.54	6	22.43

The exchange rate of US$1=S$1.36 (31st December 2018: US$1=S$1.37) was used for translating assets and liabilities at the balance sheet

date and US$1=S$1.35 (31st March 2018: US$1=S$1.32) was used for translating the results for the year. The financial results for the three months ended 31st March 2019 and 31st March 2018 have been prepared in accordance with International Financial Reporting Standards and have not been audited or reviewed by the auditors.

† The accounts have been restated due to changes in accounting policies upon adoption of IFRS 16 Leases, as set out in Note 1 to the condensed financial statements.

#The Group uses 'underlying profit attributable to shareholders' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in Note 4 to the condensed financial statements. Management considers this to be a key performance measurement which enhances the understanding of the Group's underlying business performances.

^Included in 'non-trading items' are unrealised gain/losses arising from the revaluation of the Group's equity investments.

nm not meaningful

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CHAIRMAN'S STATEMENT

Overview

Jardine Cycle & Carriage ("JC&C") saw an 8% reduction in underlying profit in the first quarter of the year, with increased earnings from Astra offset by a lower contribution from the Group's non-Astra interests, principally due to the timing of dividends from Vinamilk.

Performance

The Group's revenue for the three months ended 31st March 2019 increased by 2% to US$4.7 billion, primarily due to higher revenue in most of Astra's businesses, in particular financial services and heavy equipment, mining, construction and energy. The Group's underlying profit attributable to shareholders of US$201 million was 8% lower than the comparable period last year, with the underlying profit per share of US¢51 also 8% down. Profit attributable to shareholders increased significantly to US$312 million from US$135 million, after accounting for net non-trading gains of US$111 million, principally unrealised fair value gains related to non-current investments.

Astra contributed US$179 million to the Group's total underlying profit, an increase of 1%. The underlying profit from the Group's Direct Motor Interests was 6% higher at US$28 million, but no contribution was recorded from its Other Strategic Interests in the period, compared to dividends of US$10 million received from Vinamilk in the comparable period last year. Vinamilk's 2018 final dividend was approved by its shareholders in April 2019 and will be included in the results for the second quarter. Corporate costs were US$6 million compared to an income of US$5 million in the previous year primarily due to higher net financing charges and lower foreign exchange gain from the translation of foreign currency loans.

The Group's consolidated net debt, excluding Astra's financial services subsidiaries, was US$2.3 billion at the end of March 2019, compared to US$2.2 billion at the end of 2018. This increase was largely due to Astra's additional investment in GOJEK during the period. Net debt within Astra's financial services subsidiaries remained stable at US$3.3 billion compared to the end of 2018. JC&C parent's net debt was US$1.3 billion at the end of March 2019, in line with the previous year end.

The Board has not declared a dividend for the three months ended 31st March 2019 (31st March 2018: Nil). Dividends are usually declared on a semi-annual basis for every six-month period ending 30th June (in respect of an interim dividend) and 31st December (in respect of a final dividend).

GROUP REVIEW

ASTRA

Astra reported a net profit equivalent to US$369 million, under Indonesian accounting standards, 5% higher in its local currency terms. This was mainly due to increased contributions from its financial services and heavy equipment, mining, construction and energy businesses, which more than offset lower contributions from its automotive business and agribusiness.

In February 2019, as part of the collaboration between Astra and GOJEK, a joint venture company was formed to provide fleet management support for the ride-hailing online transportation system of GO-CAR in Indonesia. This strategic collaboration was launched following an additional US$100 million of equity investment by Astra in GOJEK in January 2019, which brings the total investment in GOJEK to US$250 million.

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Automotive

Net income from the group's automotive division fell by 10% to US$135 million, mainly due to lower car sales volumes and increased material costs which affected the manufacturing operations.

The wholesale market for cars declined by 13% to 254,000 units. Astra's car sales, however, were only 5% lower at 134,000 units which resulted in an increase in market share from 49% to 53% in the first quarter of 2019. The group launched 6 new models and 2 revamped models during the period.

The wholesale market for motorcycles increased by 19% in the first two months of this year, compared with the equivalent period in 2018. Wholesale market size information is not yet available for March 2019. The group launched 2 new models and 12 revamped models during the period.

Astra Otoparts, the group's components business, reported a 9% increase in net income at US$11 million. The increase in net income was mainly due to higher revenue generated from its original equipment manufacturing, replacement market and export segments.

Financial Services

Net income from the group's financial services division increased by 32% to US$99 million, due to higher contributions from most business segments.

The group's consumer finance businesses saw a 5% increase in the amount financed to US$1.5 billion. The net income contribution from the group's car-focused finance companies increased by 51% to US$24 million, mainly due to lower non-performing loan losses. Motorcycle-focused Federal International Finance's net income was up 11% at US$43 million, primarily due to a larger loan portfolio.

The amount financed through the group's heavy equipment-focused finance operations increased by 15% to US$69 million. The net income contribution from the group's heavy equipment-focused finance operations increased by 69% to US$2 million, reflecting higher levels of lending to corporate customers.

Permata Bank, in which Astra holds a 44.6% interest, reported net income of US$27 million compared with US$12 million in the first quarter of 2018, mainly due to higher levels of recoveries from non-performing loans. The bank's gross and net non-performing loan ratios were 3.8% and 1.6%, respectively, at the end of March 2019 compared to 4.4% and 1.7% at the end of 2018.

Asuransi Astra Buana, the group's general insurance company, reported a 9% increase in net income at US$19 million, due to higher investment income. During the period, the group's life insurance joint venture, Astra Aviva Life, acquired more than 170,000 new individual life customers and 50,000 new participants for its corporate employee benefits programmes.

Heavy Equipment, Mining, Construction and Energy

Net income from the group's heavy equipment, mining, construction and energy division increased by 20% to US$129 million.

United Tractors, which is 59.5%-owned, reported net income of US$216 million, 21% higher than the comparable period in 2018. The increase was mainly due to the improved performance in its mining contracting business and the contribution from the gold mining operation acquired in December 2018.

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Within United Tractors' construction machinery business, Komatsu heavy equipment sales increased by 1% to 1,181 units, while parts and service revenues were also higher. The mining contracting operations of wholly-owned Pamapersada Nusantara recorded a 14% increase in overburden removal volume at 235 million bank cubic metres and 15% higher coal production at 31 million tonnes. United Tractors' coal mining subsidiaries reported 4% lower coal sales at 3 million tonnes, including 325,000 tonnes of coking coal sales by 80.1%-owned Suprabari Mapanindo Mineral. Agincourt Resources, a 95%-owned subsidiary of United Tractors, reported gold sales of 97,000 oz in the first quarter of 2019.

General contractor Acset Indonusa, a 50.1%-owned subsidiary of United Tractors, reported a net loss of US$6 million, compared to net income of US$3 million recorded in the first quarter last year, mainly due to increased construction and funding costs of several ongoing projects.

25%-owned Bhumi Jati Power is in the process of constructing two 1,000MW power plants in Central Java, which are scheduled to start commercial operations in 2021.

Agribusiness

Net income from the group's agribusiness division was down 89% at US$2 million.

Astra Agro Lestari, which is 79.7%-owned, reported a 89% decline in net income to US$3 million primarily due to a fall in crude palm oil prices, which were 20% lower at Rp6,252/kg compared with the average in the first quarter of 2018. This more than offset a 25% increase in crude palm oil and derivatives sales to 599,000 tonnes.

Infrastructure and Logistics

The group's infrastructure and logistics division reported a net income of US$1 million, compared with a net loss of US$2 million in the first quarter of 2018. This was mainly due to improved earnings from operational toll roads. Astra has interests in 302km of operational toll roads along the Trans-Java network, with a further 11km in Greater Jakarta under construction.

Serasi Autoraya's net income decreased by 19% to US$3 million, due to a 2% fall in vehicles under contract at 22,000 and 2% lower used car sales at 8,000 units.

Information Technology

Net income from the group's information technology division was 26% lower at US$1 million.

Astra Graphia, which is 76.9%-owned, reported net income of US$2 million, 26% lower than the first quarter of last year. While revenues in the document solutions and office services businesses rose, they were offset by higher operating costs.

Property

The group's property division reported a net profit of US$1 million, compared to a marginal net profit in the first quarter of last year, mainly due to increased earnings from Menara Astra, with no project completions in either period.

The group's other projects include interests in Arumaya in South Jakarta and Asya in East Jakarta, both residential projects, and a 3-hectare residential and commercial development in Jakarta's Central Business District.

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