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.
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.
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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 Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has a recommendation for Dairy Farm International Holdings.