Jardine C&C FY2019 underlying net profit holds steady at US$863m

JARDINE Cycle & Carriage's (Jardine C&C) earnings for the year ended Dec 31, 2019 rose marginally from a year ago as lower car sales in Singapore, Malaysia and Vietnam offset savings on corporate costs, according to the regional auto dealer's results on Thursday.

Underlying net profit, which excludes non-trading items like investments, climbed 1 per cent to US$863 million from revised underlying net profit of US$856 million in FY2018.

Revenue shrank 2 per cent to US$18.6 billion from US$19 billion in FY2018.

Contributions from Indonesian subsidiary Astra remained stable, but revenue from direct motor interests fell 11 per cent. Revenue from other strategic interests also decreased 13 per cent.

Meanwhile, corporate costs shrank 46 per cent to US$42 million from US$77 million a year ago, mainly due to foreign exchange gains in 2019 and foreign exchange losses in 2018.

Overall net profit more than doubled to US$881 million from US$418 million previously, after net non-trading gains of US$18 million. Earnings per share rose to US$2.23 from US$1.06 in FY2018.

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Dividend per share was 86 US cents, unchanged from the previous year.

Astra's financial services and gold mining businesses performed well, but its automotive and agribusiness results were hit by relatively weak domestic consumption and low commodity prices. As a result, it contributed US$716 million in FY2019, largely flat from US$718 million in FY2018.

In its direct motor interests business, Cycle & Carriage Singapore's passenger car sales grew 2 per cent despite a 10 per cent decrease in the Singapore passenger car market, but the rise was partly offset by lower margins due to stronger competitive pressure. Overall, it contributed 5 per cent less than in the previous year.

Cycle & Carriage Bintang in Malaysia reported a US$6 million loss versus a profit of US$2 million in 2018. Vehicle sales had benefited from a period of zero goods and service tax (GST) in 2018, and FY2019 results included a one-off impairment charge on a property asset.

Under Jardine C&C's other strategic interests, Truong Hai Auto Corporation contributed 34 per cent less than in the previous year, due to higher competition in the completely-built-up import segment.

Chairman Ben Keswick said that in the year ahead, market conditions in Indonesia are expected to remain challenging, while conditions in South-east Asia in general may be impacted by the Covid-19 outbreak.

Jardine C&C shares closed at S$28.22 on Thursday before the results were announced, down 56 cents or 1.95 per cent.