Jardine Cycle & Carriage Ltd’s Latest Earnings: Revenue Falls, but …

Jardine Cycle & Carriage Ltd (SGX: C07) reported its first quarter earnings yesterday, 29 April 2015. The reporting period was for 1 January 2015 to 31 March 2015.

Majority of the revenue from Jardine C&C actually comes from its 50.1% owned Indonesian unit, PT Astra. The business of PT Astra is vast, spanning divisions like automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others.

You can learn more about the company here, and catch up with the previous earnings report here.

Financial highlights

Here’s a rundown on the financial figures:

  1. Overall revenue in the first quarter for Jardine C&C fell 14% to US$4.02 billion on a year on year comparison.
  2. Consequently, the profit line also fell by 23% to US$386 million.
  3. Earnings per share (EPS) followed suit with a 18% decrease from 61.34 US cents per share in the first quarter last year to 50.07 US cents per share in the reporting quarter. In Singapore dollar terms, the EPS came in at 68.18 Singapore cents per share.
  4. On the positive side, cashflow from operations came in at US$661.9 million for the first quarter of 2015 with capital expenditure clocking in at $106.1 million. This gave Jardine C&C a positive free cash flow of US$555.8 million.
  5. As of 31 March 2015, the group had US$1.89 billion in cash and equivalents and US$5.27 billion in debt.

In short, Jardine C&C’s revenue and profit for the quarter has disappointed on year on year basis. This was a continuation of the revenue and profit decline in the previous quarter.

On the positive side, Jardine was cash flow positive during the reporting quarter – generating a cool US$555.8 million. This positive development has also flowed through into the group’s cash balance, which has risen to US$1.89 billion this quarter compared to US$1.7 billion a year ago. The company’s debt has also decreased to $5.27 billion this quarter from US$5.7 billion a year ago.

Operational highlights

The major culprits for the decline in revenue and profit was the automotive segment and the agribusiness segment.

The automotive segment for PT Astra weakened in the first quarter of 2015 due to lack of meaningful product launches, and what the management sees as a weaker Indonesian economy. Meanwhile the agribusiness of PT Astra suffered a 80% drop in net income.

On top of that, the rupiah was also 9% weaker than the comparable quarter last year. This turned a 16% decline in rupiah based profit at PT Astra to a 24% fall in US dollar terms.

The weakness in the two segments above (automotive and agribusiness) were offset by results from the financial services segment, heavy equipment and mining, and remaining segments.

Overall, the chairman of Jardine C&C, Ben Keswick sounded a cautious note on the company’s outlook but remained confident on the financial strength of the business. He said:

“The Group is facing greater challenges in Indonesia with lower levels of economic growth, depressed commodity markets and increased competition in the car sector, while a weaker rupiah exchange rate continues to reduce Astra’s contribution. Nevertheless, our businesses remain at the forefront of their chosen markets and are underpinned by the strength of their balance sheets.”

Foolish summary

As of the closing price on 29 April 2015 of $40.62, Jardine C&C traded at a price-to-earnings ratio of 14.4 based on a trailing EPS of $2.83 per share and has a dividend yield of around 2.7% – based on a trailing twelve months dividend of 11.1 cents per share.

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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.