Jardine Cycle & Carriage profits down 1% to $553m in H1

It was hit by Astra’s underperforming agribusiness, information technology and automotive units.

Jardine Cycle & Carriage (JC&C) profits dipped 1% YoY to $553m in H1 from $570m in the same period in 2018 after earnings from its Indonesia-based vehicle distributing firm, Astra, fell by 8% YoY to $449.96m. Revenue also fell to $12.64b (US$9.16b) from $12.68b (US$9.19b) in H1 2018.

Underlying earnings per share were also down 1% to $1.45. The company’s net debt in the period rose to $4.28b (US$3.1b), compared to $3.04b (US$2.2b) at the end of 2018. This debt increase was largely due to Astra’s additional investments in the Surabaya-Mojokerto toll road and Gojek, as well as capital expenditure in its mining contracting business, and additional investment by JC&C in Truong Hai Auto Corporation.

Also read: Jardine Cycle & Carriage profits soared 131% to US$312m in Q1

The decline in Astra’s profit can be attributed to lower contributions from its automotive and agribusiness divisions, offsetting the increased contributions from the financial services and heavy equipment, mining, construction and energy divisions.

Net income of Astra’s agribusiness business plummeted 94% to $2.76m (US$2m) due to an 18% fall in crude palm oil prices. The information technology division’s net income also fell 35% to $4.14m (US$3m), which was blamed on reduced revenue in IT solutions and office services business as well as higher operating costs. JC&C’s automotive division also saw its net income slide 18% to $336.78m (US$244m), mainly due to lower car sales volumes and increased manufacturing costs.

On the other hand, net income from Astra’s financial services division grew 32% to $274.67m (US$199m), thanks to the recovery of non-performing loans, lower loan loss provisions and a larger loan portfolio. Its heavy equipment, mining, construction and energy division also saw its net income up 2% to $324.36m (US$235m), attributed to the contribution from the new gold mining operation.

JC&C declared an interim one-tier tax exempt dividend of $0.25 (US$0.18) per share for the same period.