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Jardine C&C posts 20.7% drop in Q3 underlying net profit to US$206.7m

MERCEDES-BENZ dealer Jardine Cycle & Carriage (Jardine C&C) saw third-quarter earnings slip on tough markets in Indonesia and Vietnam, according to results on Wednesday.

Underlying net profit, which excludes non-trading items like investments, came in at US$206.7 million for the three months to Sept 30, down by 20.7 per cent year-on-year.

Meanwhile, revenue dipped by 1 per cent to US$4.75 billion, with the company noting "challenging conditions faced by Astra and Truong Hai Auto Corporation".

Jardine C&C's overall net profit, including unrealised fair-value investment gains, rose to US$301.4 million, up by 50.3 per cent from US$200.5 million before. This brought overall earnings per share to 76 US cents, up from 51 US cents before.

The company noted in its financial statements for the nine months that Truong Hai Auto Corp's vehicle sales have taken a double-digit decline from "intense competition" involving imports, after an Asean trade deal eliminated tariffs last year.

Meanwhile, Cycle & Carriage Singapore saw a rise in passenger car sales, as well as in market share on the back of new launches, but margins thinned on certificate of entitlement costs.

The Singapore arm carries brands such as Citroën and Kia, and also trades in used cars and distributes BYD forklifts. Cycle & Carriage Singapore became the exclusive distributor for Mercedes-Benz in Singapore in 2000, but brand owner Daimler later took back the distributorship.

Meanwhile, at Indonesian conglomerate Astra - a key Jardine C&C subsidiary - contributions slid as the automotive segment was whacked by lower car sales, higher manufacturing costs, and currency translation losses. Income from agri-business also fell on lower average crude palm oil prices.

For the nine months, underlying net profit came in at US$614 million, down by 9 per cent on the same period the year before.

Overall net profit nearly doubled to US$728.9 million from US$373.5 million before, even as revenue for the nine months dipped by 1 per cent to US$13.91 billion.

Chairman Ben Keswick noted in a statement that the Astra unit - which deals in the automotive industry, agri-business and other sectors - "is expected to continue to be affected by relatively weak domestic consumption and low commodity prices for the remainder of the year, while benefiting from an improved contribution from financial services and its goldmine operations".

Jardine C&C's direct motor interests, which include Truong Hai Auto Corp and Cycle & Carriage Singapore, are also expected to continue facing challenging market conditions, he added.

Otherwise, contributions from other strategic interests - namely Jardine C&C's stakes in Siam City Cement, Refrigeration Electrical Engineering Corp and Vinamilk - should remain stable.

The board did not recommend a dividend for the third quarter, unchanged from the year before, as the company usually makes payouts on a twice-yearly basis.

Jardine C&C, which is 75 per cent held by the Jardines conglomerate's Jardine Matheson unit, closed up by S$0.28 or 0.85 per cent at S$33.35 before the results were released.

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