Jardine Cycle & Carriage profits soared 131% to US$312m in Q1

But underlying profit fell 8% to US$201.3m in the absence of Vinamilk’s dividend income.

Jardine Cycle & Carriage’s (JCC) profits soared by nearly 131% to US$312m in Q1 2019 from US$135m last year, its financial statement revealed. Revenue edged up 1.6% to US$4.72b from US$4.64b.

According to DBS Group Research, revenue growth was largely attributed to higher revenues across Astra’s businesses. However, underlying net profit was down 8% YoY to US$201.3m, largely due to the absence of Vinamilk’s dividend income due to timing differences.

“Although Astra’s Q1 2019 net profit contribution grew 5% YoY in local currency terms amidst a stronger performance in financial services and United Tractors, the performance from automotive and agribusiness was below expectations,” DBS Group Research analyst Rui Wen Lim commented. Post-translation, Astra contributed US$179.3m (+1% YoY) to underlying net profit.

Direct motor interests’ underlying profit grew 6% YoY to US$28.1m, primarily led by Singapore and Indonesia’s contribution of US$13.5m (+6% YoY) and US$5.5m (+12% YoY) respectively.

Lim noted that in Singapore, JCC continues to maintain its market share of 21% alongside a growing market, whilst Tunas Ridean recorded higher motorcycle sales but lower motor car sales, as well as higher contribution from its consumer finance operations. Vietnam’s underlying profit grew 2% YoY to US$12m amidst increased completely buildup cars (CBU) competition.

“JCC expects Astra to continue benefitting from the strong performance in United Tractors and financial services, whilst still seeing intense competition in the automotive market, and weaker commodity prices,” Lim said.

The analyst expects slower growth in non-Astra interests in FY19 after recording 19% YoY growth in direct motor interests and 107% YoY growth in other strategic interests (due to Vinamilk’s contribution post-acquisition) in FY2018.

On 5 April 2019, JCC announced an increase in shareholding in Thaco to 26.57% (from 25.23%) for US$168m through a subscription of new shares in a share placement exercise. Lim commented, “We believe that such efforts by JCC continue to demonstrate its ongoing efforts to diversify its earnings away from Astra International.”