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The Good And Bad That Investors Should Know From Jardine Cycle & Carriage Ltd’s 2018 First-Half Results

Jardine Cycle & Carriage Ltd (SGX: C07), or Jardine C&C, is a conglomerate with a diverse set of businesses, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology and others. These businesses are grouped into 3 segments, namely, Astra International, Direct Motor, and Others.

The company released its 2018 half-year results in end-July. In this article, I will look at the positive and negative points from the latest announcement.

Positives

First of all, the company reported stronger revenue and underlying profitability for the first half of 2018. Revenue increased 10% year-on-year to US$9.2 billion while underlying earnings per share was up by 11% year-on-year to 105 US cents.

Secondly, the improvement in underlying profitability was across the board. Astra’s underlying profit was up by 12% year-on-year to US$354 million, Direct Motor’s underlying profit was up 18% year-on-year to US$74 million while Other Strategic interest’s underlying profit was up by 394% year-on-year to US$41 million.

Negatives

First of all, Jardine C&C generated operating cash flow of US$621.6 million, down from US$852.7 million last year. The lower operating cash flow was due to negative working capital movements and higher tax paid.

Secondly, the company’s net debt has increased in the first half of 2018. As at 30 June 2018, the company’s net debt stood at US$5.1 billion, up from US$4.2 billion, as at 31 December 2017. This resulted in an increase in gearing to 40% at the end of June 2018, up from 31% as at 31 December 2017.

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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.