MENU

The Good And The Bad: What Investors Should Know About Jardine Cycle & Carriage Ltd’s Latest Earnings

Jardine Cycle & Carriage Ltd (SGX: C07) is one of the companies in Singapore’s stock market that are under the giant umbrella of the Jardine group of companies. Some of the other members of the Jardine family include Jardine Strategic Holdings Limited (SGX: J37)Mandarin Oriental Limited (SGX: M04), and Jardine Matheson Holdings Limited (SGX: J36).

On its own, Jardine C&C can be considered to be a conglomerate with a diverse set of businesses. That’s because the bulk of its revenue and profit comes from its 50% stake in Indonesian company Astra, which has many business segments such as automotive, financial services, heavy equipment and mining, agribusiness, and more.

In late April, Jardine Cycle & Carriage released its 2017 first quarter earnings. There are both positive and negative takeaways from the company’s latest earnings that investors may want to learn about. Let’s take a look, starting with an overview of the numbers:

1. The overall result

The following’s a table showing some important numbers from Jardine Cycle & Carriage’s income statement for the first quarters of 2017 and 2016:


Source: Jardine Cycle & Carriage 2017 first quarter earnings release

Simply put, Jardine Cycle & Carriage enjoyed strong growth in the first quarter of 2017. Revenue was up by 16%, and underlying profit attributable to shareholders (which strips out fair value changes and one-off gains) grew by 44%.

2. The positives

To begin with, Jardine Cycle & Carriage delivered growth in profitability across most of its business segments as you can see in the table below:


Source: Jardine Cycle & Carriage 2017 first quarter earnings release

In other words, the company’s stronger performance in the first quarter of 2017 was something achieved by growth across nearly the entire business rather than a handful of segments.

Secondly, Jardine Cycle & Carriage expects the rest of 2017 to be positive for Astra due to the continued growth in Indonesia’s economy on the back of higher commodity prices.

3. The negative

One of the laggards in Jardine Cycle & Carriage’s various businesses in the first quarter of 2017 was the direct motor interest in Vietnam. That business – which is represented by Truong Hai Auto Corporation – saw a large 64% decline in profit during the quarter as a result of increased competition.

This is something important to note as Truong Hai Auto Corporation was the second-largest direct motor interest business of Jardine Cycle & Carriage even after its sharp decline in the reporting quarter.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

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