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Jardine Cycle & Carriage Limited’s Latest Earnings: What Investors Should Know

Jardine Cycle & Carriage Limited (SGX: C07), or Jardine C&C for short, reported its fourth-quarter & full year earnings report last Thursday. The reporting period was for 1 October 2014 to 31 December 2014.

Majority (at 90% or more) of Jardine C&C’s revenue actually comes from its 50.1% stake in Indonesian conglomerate, Astra. The rest of it comes from “Other Motor Interests”. You can read more about Jardine C&C here and catch its third quarter earnings here.

Financial highlights

Here’s a rundown on the financial figures for Jardine C&C’s latest report card:

  1. Overall revenue for 2014 was US$18.7 billion, down 6% compared to last year. Astra faced heightened competition in the car market and sales in US dollars were affected by a weaker Indonesian rupiah.
  2. For 2014, profit attributable to shareholders was $793 million, down 11% compared to 2013.
  3. Earnings per share (EPS) for the year followed suit with a 10% drop from US$2.57 in 2013 to US$2.31 in 2014.
  4. For the full year, cash flow from operations came in at US$1.24 billion with capital expenditures clocking in at US$654.2 million. The low capex gave the vehicle distributor US$585.7 million in positive free cash flow, down from US$1.25 billion in  2013
  5. As of 31 December 2014, the group had US$1.76 billion in cash and equivalents and borrowings of about $5.7 billion.

In short, Jardine C&C ended 2014 with a reduction in profits, much like 2013. This has affected its dividend payouts. For the fourth quarter, the recommended final dividend of US$0.67 per share added up to US$0.85 per share in dividends for the whole of 2014. This is a decline from the total dividend of US$1.08 per share in 2013.

That said, Jardine C&C remains free cash flow positive and that’s a positive sign. We should continue to observe for signs of recovery in the company’s business, both on the revenue and free cash flow side of things.

Operational highlights

Astra’s underlying profit in rupiah terms was 3% lower than 2013’s. Coupled with the strength of the US dollar, underlying profit from Astra fell from US$849 million to US$724 million.

The main culprit behind the fall was the automotive segment, which saw a 25% decline in underlying profit. The agribusiness segment, though, bucked the trend with a 23% increase in underlying profit on higher average crude palm oil prices.

Ben Keswick, Chairman of Jardine C&C, added the following commentary for 2014’s results and the outlook ahead:

“The Group’s full year results declined as Astra’s trading performance was affected by heightened competition in the car market and weak coal prices, while a weaker rupiah reduced its US dollar contribution further. This more than outweighed the improved results from the Group’s other interests.

The Group’s markets are expected to remain uncertain in the year ahead. Astra is anticipating continued competition in the car market in Indonesia and relatively low coal prices, while the weaker rupiah exchange rate will continue to impact its contribution to the Group.”

Foolish take away

At its closing price today of $43.42, Jardine C&C’s trading around 14 times its latest trailing earnings and carries a dividend yield of 2.6% (based on 2014’s total payout).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.