Published February 28, 2009

Jardine C&C net profit rises 32pc

US$448.2m gain due mainly to good performance of Indonesian subsidiary

By SAMUEL EE

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JARDINE Cycle & Carriage's net profit rose 32 per cent to US$448.2 million for the full year ended Dec 31, 2008, mainly on the good performance of its Indonesian subsidiary Astra's major businesses.

GOOD PERFORMANCE Sales of Mercedes-Benz cars rose in Singapore by 5 per cent, enhanced by sales of the new C-Class and ongoing demand for the S-Class

Without taking into account a net non-trading loss of US$29 million, the group's underlying profit was US$477.2 million.

Revenue rose 25 per cent to US$11.19 billion, with the group's businesses performing well in the first nine months but faltering in the last quarter on a steep decline in commodity prices, the weakening of the Indonesian rupiah and a tightening of consumer credit brought about by the global economic slowdown.

Earnings per share rose 29 per cent from 98.47 US cents to 127.15 US cents. A final dividend of 36 US cents per share is being recommended which, together with the interim dividend, will give a total dividend of 50 US cents, up from 43 US cents in 2007.

Jardine C&C said that the US$29 million non-trading loss was due mostly to the fair value loss on plantations caused by the sharp decline in crude palm oil prices in the latter part of the year, although this was partly offset by gains on the disposal of some plantation and property assets.

The group, which has owned 50.1 per cent of Astra since August 2005, said that the unit's contribution to the underlying profit was up 29 per cent at US$460 million, with its non-automotive activities performing particularly well for most of the year.

Its automotive and financial services businesses grew strongly for most of 2008, and contributed US$303 million to the group's underlying profit, up 20 per cent.

With the Indonesian economy growing by 6.1 per cent last year, Astra benefited from strong consumer demand and high crude palm oil prices for most of the year. Under Indonesian accounting standards, it reported a net profit equivalent to US$942 million for 2008, up 41 per cent from the previous year in its reporting currency.

Jardine C&C's share of underlying profit from its other motor interests was up 4 per cent to US$44 million.

The profit contribution from Singapore motor operations rose by 5 per cent to US$35 million with Mercedes-Benz turning in a good performance.

Overall, Singapore's passenger car market fell by 10 per cent to 99,600 units, while the commercial vehicle market fell by 5 per cent to 10,900 units. Jardine C&C's passenger car sales were 16 per cent lower and its market share declined slightly to 13 per cent.

But sales of Mercedes-Benz cars rose by 5 per cent, enhanced by sales of the new C-Class and ongoing demand for the S-Class. Mitsubishi and Kia passenger car sales fell by 18 per cent and 28 per cent respectively, while Citroen sales were slightly lower than a year ago.

Malaysian subsidiary Cycle & Carriage Bintang, which has restructured to focus on Mercedes-Benz, contributed an underlying profit of US$3 million, up 52 per cent from a year ago.

Looking ahead, chairman Anthony Nightingale expects 2009 to be a difficult year 'as the global economic disruption has led to tight liquidity and poor consumer sentiment'.

'Nevertheless, we are confident that the group's healthy balance sheet and strong underlying businesses will enable Jardine Cycle & Carriage to meet the challenges ahead,' he said.

The group's shares ended trading down 51 cents at $8.84 yesterday.