The Motley Fool

Jardine Matheson Holdings Limited’s Latest Earnings: How Did The Jardine Motors Business Do?

Jardine Matheson Holdings Limited  (SGX: J36) is a sprawling conglomerate with interests in many Singapore-listed companies such as automobile distributor Jardine Cycle & Carriage Ltd (SGX: C07), bricks-and-mortar retailer Dairy Farm International Holdings Ltd (SGX: D01), hotelier Mandarin Oriental Limited (SGX: M04), and more.

But that’s not at all. Jardine Matheson also has stakes in the London-listed insurer Jardine Lloyd Thompson, the privately-held Jardine Pacific, and more.

Our FREE SGX stock pick!


We reveal 1 fast growing, Singapore stock pick flying under the radar, absolutely FREE!

In early March, Jardine Matheson released its 2017 full year earnings update. Given the complexity of the company, I thought it would be useful for investors to have a look at the performance of the individual businesses.

In a previous article, I had discussed Jardine Pacific. In this article, I will be running through the performance of Jardine Motors. [Editor’s note: An article studying the Jardine Lloyd Thompson business has been published. It can be found here.]

What Jardine Motors does

Jardine Motors, which is wholly-owned by Jardine Matheson, is engaged in the sales and service of motor vehicles in Hong Kong, Macau, the southern part of mainland China, and the United Kingdom.

The financial performance

The table below shows the underlying profit contributions from Jardine Motors’ various businesses in 2017 and 2016:

Source: Jardine Matheson 2017 full year earnings presentation

In mainland China, both Zung Fu (a retailer of Mercedes-Benz vehicles) and Zhongsheng (a motor dealership group in mainland China) delivered profit growth. For the former, higher sales of Mercedes-Benz passenger cars, an improvement in margin, and a strong performance from after-sales activities contributed towards the growth. As for the latter, an increase in sales and better margins resulted in higher underlying profit.

On the other hand, the UK had a challenging time, with its underlying profit falling by 49%. Weaker business results and the absence of a gain on disposal of certain assets in 2017 played a role in the profit decline.

Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.

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. The Motley Fool Singapore has a recommendation for Dairy Farm International Holdings.