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Jardine Cycle & Carriage Ltd’s Latest Earnings: Revenue and Profit Falls (Again)

Jardine Cycle & Carriage Ltd  (SGX: C07) reported its earnings for the first-half of 2016 last Friday.

The majority of Jardine C&C’s revenue comes from its 50.1%-owned Indonesian conglomerate, PT Astra. The conglomerate has a diverse business, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others.

You can learn more about Jardine C&C in here or catch up with the results from its previous quarter here.

Financial highlights

The following’s a quick take on Jardine C&C’s financial figures:

  1. For the first-half of 2016, Jardine C&C’s revenue fell 6% year-on-year to US$7.7 billion.
  2. The firm’s share of associates’ and joint ventures’ results (after tax) increased from US$121.9 million in the first-half of 2015 to US$135.9 million in the first-half of 2016.
  3. But that wasn’t enough for the bottom-line as underlying profit attributable to shareholders saw an 8% decline to US$332 million.
  4. Jardine C&C’s underlying earnings per share (EPS) experienced a 15% fall from US$0.99 in the first-half of 2015 to US$0.84 in the first-half of 2016.
  5. Cash flow from operations came in at US$648 million with capital expenditure clocking in at US$185 million. This provided Jardine C&C with positive free cash flow of US$463 million. The company’s free cash flow was US$645 million in the first-half of 2015 (US$897 million in cash flow from operations and US$252 million in capex).
  6. As of 30 June 2016, Jardine C&C has US$2.45 billion in cash and equivalents and US$5.44 billion in debt. This is an improvement from the US$1.59 billion in cash and equivalents and US$5.92 billion in debt that the company recorded on 30 June 2015.

In all, Jardine C&C recorded lower sales and profit, the same thing that happened in the first-half of 2015. But, it is worth noting that the firm continues to generate free cash flow and that its balance sheet had improved from a year ago.

The board of directors recommended a final dividend of US$0.18 per share, unchanged from the year ago.

Operational highlights and a future outlook

PT Astra’s Financial Services segment and Heavy Equipment and Mining segment suffered year-on-year revenue declines exceeding 40%. This was offset by better performances from the Automotive segment which saw an 11% increase.

The rupiah was also 3% weaker compared to the same period last year. PT Astra’s profit in the Indonesian rupiah fell by 12% but translated to a 15% fall in US dollar terms. Overall, PT Astra’s profit was at US$249 million for the first-half of 2016.

The weakness in PT Astra’s revenue was offset by 13% net income growth in Jardine C&C’s direct motor interests. Indonesia, Vietnam, and Singapore all posted increases.

Ben Keswick, the Chairman of Jardine C&C, sound a cautious note on the company’s outlook. He said:

“The challenges affecting Astra’s businesses in the first half are likely to persist for the remainder of the year, although steady performances are expected from its consumer finance and automotive operations. Elsewhere, it is anticipated that competitive pressures will continue to affect the Group’s Direct Motor Interests and Other Interests.”

Jardine C&C closed at a price of S$39.23 last Friday. At that price, the conglomerate has a price-to-earnings ratio of 17.4.

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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.