Jardine Cycle & Carriage proposes special dividend, distribution in specie of Toyota shares amid strategic review
Total dividends for the period stand at about US$1.01 a share, pending shareholder approval
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[SINGAPORE] Jardine Cycle & Carriage (JC&C) has proposed a special dividend of about US$0.73 per share, featuring a cash payout and a direct distribution in specie of its remaining stake in Japanese carmaker Toyota Motor Corporation, under a move to prioritise the focus of the company’s portfolio and improve shareholder returns.
The cash payout of US$0.37 a share is funded by Jardine’s divestments of Tokyo-listed Toyota shares in April, while the distribution-in-specie of around 7.2 million common shares of Toyota is valued at around US$0.36 a share.
Combined with the declared interim dividend of US$0.28 per share, unchanged from the prior-year period, total dividends for the period stand at about US$1.01 a share, pending shareholder approval at an upcoming extraordinary general meeting (EGM).
The announcement came on Thursday (Jul 30) together with the group’s financial statements for the first half ended Jun 30.
“The special dividend announced today...reflects our sharpened capital allocation philosophy,” chief executive officer Freddy Lee said.
Distributions in specie provide the opportunity for shareholders to take part directly in the ownership and future value of the underlying investment, or to realise that investment for cash.
JC&C’s interim dividend will be paid on Oct 5. Further details regarding the EGM for the special dividend and distribution in specie will be announced later.
The move aligns with a broader strategic review, under which JC&C proposed changing its name to Jardine Matheson Southeast Asia.
Lee said: “Looking ahead, as the portfolio is reshaped through opportunities to sharpen the focus of and improve returns from the portfolio, the group will carefully evaluate its capital structure, including as a priority the reduction of corporate net debt.”
H1 underlying profit down 11%
In the same announcement, JC&C reported an 11 per cent year-on-year drop in underlying profit to US$473 million, down from US$529 million.
The group also posted a 2 per cent drop in net profit to US$363 million for its first half ended Jun 30, from US$371 million in the year-ago period.
This was mainly due to a 7 per cent decrease in business contributions, reflecting lower contributions from Indonesia, where Astra’s mining solutions and heavy equipment businesses experienced challenging conditions. There was also a lower contribution from Cycle & Carriage in Singapore.
The decline was also attributed to reduced dividend income, and the absence of non-recurring foreign exchange gains recognised in the prior year period.
Earnings per share stood at US$0.92 for the half year, down 2 per cent from US$0.94 the previous year.
Revenue for the six months fell 8 per cent to US$10 billion, from US$10.8 billion the year before. This was mainly rooted in a weaker performance by Astra’s mining solutions and heavy equipment business following the absence of gold sales from the Martabe mine, which had a temporary halt in operations.
“The operating environment in Indonesia is expected to continue facing macroeconomic headwinds for the remainder of the year,” Lee said.
“Nevertheless, we are confident in Astra’s and Indonesia’s fundamentals for the long-term, and are committed to working with Astra to drive performance.”
Growth momentum in Vietnam is expected to remain positive, Lee added.
Shares of JC&C ended S$0.23 or 0.8 per cent higher at S$28.33 on Thursday before the announcement.
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