Jardine C&C Q1 net profit more than doubles on investment gains

MAINBOARD-LISTED Jardine Cycle & Carriage (Jardine C&C) saw first-quarter earnings more than double on unrealised investment gains, but its profits from operations still took a tumble.

Net profit jumped from US$135.3 million to US$312.4 million for the three months to March 31, according to financial results released on Friday, as the contribution from non-trading items swung from losses in the year prior to US$111.1 million in the black.

But underlying profit, shorn of non-trading items, was down by 8 per cent year-on-year to US$201.3 million, even as revenue increased by 2 per cent to US$4.72 billion on the back of higher turnover from key Indonesian subsidiary Astra.

Astra's earnings were up by 5 per cent in local currency terms although the rupiah's weakness ate into its contribution to the group, led by income from its financial services division, which includes lender Permata Bank and insurer Asuransi Astra Buana, as well as the heavy equipment, mining, construction and energy business.

The performance of these segments made up for flat growth or sharp drops elsewhere, such as the 89 per cent plunge in Astra's agri-business contributions on lower crude palm oil prices.

Astra's automotive segment also saw net income fall by 10 per cent to US$135 million, no thanks to fewer car sales and a higher cost of materials in manufacturing.

Still, the increase in Astra earnings was chipped away by a lower contribution from other divisions, said the group in its results statement, especially the lack of dividends from Vietnamese dairy producer Vinamilk, where it has a 10 per cent stake.

Vinamilk's final dividend for 2018 was approved only in April 2019 and will go into second-quarter results, along with contributions from 25.5 per cent-owned Siam City Cement in Thailand and 24.9 per cent-owned Refrigeration Electrical Engineering Corp in Vietnam.

Otherwise, Jardine C&C's direct motor interests put up a mixed showing for the quarter. The division turned out an overall increase in profit contributions, as earnings in the Singapore, Indonesia and Vietnam markets covered losses in Malaysia and Myanmar.

Earnings per share came in at 79 US cents, up from 34 US cents the year before.

Meanwhile, net asset value stood at US$16.55 a share against US$15.54 as at Dec 31, 2018.

"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," said chairman Benjamin Keswick in a statement.

Still, he added that Jardine C&C's non-Astra interests "are expected to show slower growth".

No dividend was recommended for the period, unchanged from the same period the previous year, as Jardine C&C typically makes its payouts on a half-yearly basis.

Separately, independent director Chang See Hiang retired on Friday, after deciding not to seek re-election at the annual general meeting.

Mr Chang, 65, had sat on the board since 1997 and was chairman of the nominating committee, as well as member of the audit and remuneration committees.

He is replaced as nominating committee head by independent director Lim Hwee Hua, while independent director Marty Natalegawa was named a new committee member.

Jardine C&C closed up by S$0.07 or 0.19 per cent at S$36.33 on Friday before the results were released.