Last Friday, Jardine Cycle & Carriage Ltd (SGX: C07) or Jardine C&C reported its 2019 first-quarter earnings update. As a quick introduction, 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 three segments, namely, Astra International, Direct Motor, and Others.
Here, we will look at 10 things that investors should know from its latest earnings update.
- Revenue increased 2% year-on-year to US$4.7 billion.
- Operating profit for the period jumped 51% year-on-year to US$ 655.3 million.
- Yet, underlying profit attributable to shareholders fell 8% year-on-year to US$201 million. The decline in underlying profit was mainly due to the timing of dividends from Vinamilk.
- Similarly, underlying earnings per share (EPS) declined 8% year-on-year to 51 US cents.
- Operating profit margin for the quarter was at 13.9%, up from 9.3% in the corresponding period last year.
- Jardine C&C generated operating cash flow of US$394.7 million, down from US$411.1 million last year. The lower operating cash flow was due to negative working capital movements and higher tax paid.
- As of 31 March 2019, the conglomerate’s net debt stood at US$5.6 billion, up from US$5.5 billion as of 31 December 2018.
- All segments (with the exception of Other Strategic Interests) reported higher underlying profit — Astra’s underlying profit inched up by 1% year-on-year to US$179 million while Direct Motor underlying profit grew 6% year-on-year to US$28 million. The decline in Other Strategic Interests’ underlying profit was due to the absence of dividend from Vinamilk.
- Jardine C&C did not declare any dividend for the latest quarter.
- Jardine C&C’s Chairman, Ben Keswick, commented:
“While Astra’s earnings increased by 5% in local currency terms, the increase in its contribution to the Group was lower due to a weaker local currency this year compared with the first quarter of 2018. Earnings from the Group’s non-Astra interests fell by 22% due to the timing of dividends from Vinamilk. Setting aside this impact of dividends from Vinamilk, the non-Astra interests would have shown 6% growth. For the rest of the year, Astra is expected to continue to benefit from higher contributions from its financial services and mining contracting businesses as well as its newly acquired gold mining business, but concerns remain over lacklustre demand and intense competition in the car market and weaker commodity prices. The Group’s non-Astra interests are expected to show slower growth.”
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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.