Jardine Math.sr Regulatory News (JAR)

To: Business Editor 28th July 2022

For immediate release

Jardine Cycle & Carriage Limited

2022 Half-Year Financial Statements and Dividend Announcement

The following announcement was issued today by the Company's 75.9%-owned subsidiary, Jardine Cycle & Carriage Limited.

For further information, please contact:

Jardine Matheson Limited

Joey Ho (65) 9765 0717

Brunswick Group Limited

Ben Fry (65) 9017 9886

28th July 2022

JARDINE CYCLE & CARRIAGE LIMITED

2022 HALF-YEAR FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

"The Group performed strongly in the first half of 2022 and achieved a record half-year underlying profit, mainly due to higher contributions from Astra and THACO. Astra's performance, in particular, benefited from improved economic conditions and higher commodity prices. The Group expects results in the second half of the year to remain strong, although it remains cautious as a result of global economic challenges, ongoing geopolitical developments and the continuing impact of the pandemic."

Ben Keswick, Chairman

The exchange rate of US$1=S$1.39 (31st December 2021: US$1=S$1.35) was used for translating assets and liabilities at the balance sheet date, and US$1=S$1.37 (30th June 2021: US$1=S$1.33) was used for translating the results for the period. The financial results for the six months ended 30th June 2022 and 30th June 2021 have been prepared in accordance with International Financial Reporting Standards and have not been audited or reviewed by the auditors.

* The Group uses 'underlying profit attributable to shareholders' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in Note 6 to the condensed financial statements. Management considers this to be a key performance measurement that enhances the understanding of the Group's underlying business performances.

^ Included in 'non-trading items' are unrealised gains/losses arising from the revaluation of the Group's equity investments.nm not meaningful

CHAIRMAN'S STATEMENT

Overview

Jardine Cycle & Carriage ("JC&C" or "the Group") delivered strong results in the first half of 2022, compared to the same period in 2021, mainly due to higher contributions from Astra and THACO.

Astra contributed US$465 million to the Group's underlying profit, 58% higher than the same period last year, driven primarily by improved economic conditions and higher commodity prices.

THACO contributed US$52 million, 43% higher than the same period last year, due to a strong automotive performance.

Direct Motor Interests contributed US$28 million, an increase of 20% compared to the same period last year. Lower profits from the Singapore operations were offset by an improved performance by Tunas Ridean in Indonesia.

Other Strategic Interests contributed US$34 million, 13% higher than the same period last year, mainly due to higher profits from Siam City Cement and REE.

Exchange losses of US$35 million from the translation of foreign currency loans at JC&C parent company were higher than in the same period last year. Other corporate costs saw an increase mainly due to higher net financing charges.

The Group's underlying profit attributable to shareholders increased by 51% to US$522 million. After accounting for non-trading items, which mainly comprised unrealised gains and losses arising from the revaluation of the Group's equity investments, the Group's profit attributable to shareholders was US$487 million, compared to US$226 million in the same period last year.

The Group's consolidated net cash position, excluding the net borrowings from Astra's financial services subsidiaries, was US$884 million at the end of June 2022, compared to US$770 million at the end of 2021. Net debt within Astra's financial services subsidiaries was at US$2.4 billion. JC&C parent company's net debt was US$1.5 billion at the end of June 2022.

During the first half of the year, JC&C slightly increased its interest in Cycle & Carriage Bintang from 89.0% to 89.99%, through on-market purchases. In July, it announced a general offer to acquire the remaining shares in the company. JC&C also increased its interest in REE from 31.0% to 32.9%.

Group Review

The contributions to JC&C's underlying profit attributable to shareholders by business segment were as follows:  

Astra

Astra contributed US$465 million to JC&C's underlying profit, 58% higher than the same period last year. Excluding the unrealised gain from the revaluation of its equity investments, Astra reported a net profit equivalent to US$998 million under Indonesian accounting standards, with stronger performances from all its businesses, and particularly its automotive, financial services, heavy equipment and mining operations.

Automotive

Net income increased by 29% to US$295 million, reflecting higher sales volumes. Key points are as follows:

· The wholesale car market increased by 21% in the first half to 475,000 units. Astra's car sales were 23% higher at 259,000 units, with its market share increasing from 53% to 54%. 

· The wholesale market for motorcycles decreased by 8% in the first half to 2.2 million units. Astra's Honda motorcycle sales were 13% down to 1.6 million units due to production constraints caused by semiconductor supply issues, which led to a decline in market share from 77% to 73%.

· Components business, Astra Otoparts, reported a 62% increase in net profit to US$30 million, mainly due to higher revenues from the original equipment manufacturer and replacement market segments.

Financial Services

Net income increased by 36% to US$200 million due to higher contributions from the consumer finance businesses. Key points are as follows:

· Consumer finance businesses saw an 18% increase in the amounts financed to US$3.3 billion. The net income contribution from the car-focused finance companies increased by 47% to US$57 million due to larger loan portfolios, and the contribution from the motorcycle-focused financing business increased by 60% to US$103 million, mainly due to lower levels of non-performing loans.

· General insurance company, Asuransi Astra Buana, reported a 6% increase in net income to US$44 million, due to higher underwriting income and investment income.

Heavy Equipment, Mining, Construction and Energy

Net income increased significantly from US$187 million to US$427 million, mainly due to improved profits from heavy equipment sales, mining contracting and coal mining, all of which benefited from higher coal prices. However, coal operating volumes were adversely impacted by the temporary coal export ban. Key points are as follows:

Agribusiness

Net income increased by 25% to US$44 million, mainly due to improved crude palm oil prices which offset lower sales resulting from the temporary export ban on palm oil.

Infrastructure and Logistics

Astra's infrastructure and logistics division reported an increase in net profit from US$6 million to US$24 million, mainly due to improved performance in its toll road businesses, which saw a 34% increase in toll road revenues. Astra has 396km of operational toll roads along the Trans-Java network and in the Jakarta Outer Ring Road.

THACO

THACO contributed a US$52 million profit, 43% up compared to the same period last year, mainly due to a strong automotive performance supported by a temporary reduction in registration fees for locally-assembled vehicles. THACO's automotive unit sales were up 54%, with market share increasing from 22% to 29%, while margins also increased due to an improved sales mix.

Direct Motor Interests

The Group's Direct Motor Interests contributed a US$28 million profit, 20% up compared to the same period last year. Key points are as follows: 

· Cycle & Carriage Singapore's contribution was 41% lower at US$11 million. Passenger car sales fell 25% to 3,144 units as sales volume was adversely impacted by the tightened COE cycle and stock supply shortages. Its market share, however, increased from 16% to 19%.

· In Indonesia, Tunas Ridean contributed US$15 million, compared to US$7 million in the same period last year, supported by improved profitability across its automotive and financial services businesses.

· Cycle & Carriage Bintang in Malaysia contributed a profit of US$3 million, compared to US$0.2 million in the same period last year. Despite challenging trading conditions, its financial performance benefited from improved business volume due to the sales tax reduction and cost savings initiatives.

Other Strategic Interests

The Group's Other Strategic Interests contributed a US$34 million profit, 13% up compared to the same period last year. Key points are as follows:

· The contribution from Siam City Cement was US$15 million, 9% higher than the previous year. Its performance was supported by improved cement volumes and prices in most of its markets, despite being adversely impacted by inflationary pressure and high energy costs.

· REE's contribution of US$9 million, based on its first-quarter results, was 71% higher than the previous year. The better result was mainly due to an improved performance from its hydropower investments, due to favourable hydrography.

· The Group's investment in Vinamilk produced a dividend income of US$9 million, compared to US$11 million last year. Vinamilk reported a 20% decrease in net profit, mainly due to higher raw material and transportation costs.

Corporate Costs

Corporate costs totalled US$57 million, compared to US$37 million in the same period last year. The increase was mainly due to higher foreign exchange losses from the translation of foreign currency loans, and higher net financing charges.

Dividend

The Board has declared an interim one-tier tax-exempt dividend of US¢28 per share (2021: US¢18 per share) for the half-year ended 30th June 2022, reflecting its decision to pay out a higher share of the full-year dividend as interim.

People

Mr Anthony Nightingale, a non-executive director of JC&C and former Chairman of the Board (2002-2012), will be retiring from the Board on 31st July 2022. On behalf of the Board, I would like to record our deep appreciation to Anthony for his valuable contribution and past leadership during his long tenure on the Board.

Outlook 

The Group expects results in the second half of the year to remain strong, although it remains cautious as a result of global economic challenges, ongoing geopolitical developments and the continuing impact of the pandemic.

Ben Keswick

Chairman

CORPORATE PROFILE

Jardine Cycle & Carriage is the investment holding company of the Jardine Matheson Group in Southeast Asia. JC&C seeks to grow with Southeast Asia by investing in market-leading businesses based on the themes of urbanisation and the emerging consumer class. The Group works closely with its businesses to enable them to achieve their potential and to elevate their communities.

The Group has a 50.1% interest in Astra, a diversified group in Indonesia and the largest independent automotive group in Southeast Asia.

JC&C also has significant interests in Vietnam, including 26.6% in THACO Corporation, 33.2% in Refrigeration Electrical Engineering Corporation and 10.6% in Vinamilk. Siam City Cement, in which it has a 25.5% interest, also has a presence in South Vietnam and operates in Thailand, Sri Lanka, Cambodia and Bangladesh.

The Direct Motor Interests in JC&C's portfolio are the Cycle & Carriage businesses in Singapore, Malaysia and Myanmar, and 46.2%-owned Tunas Ridean in Indonesia.

JC&C is a leading Singapore-listed company, 75%-owned by the Jardine Matheson group. Together with its subsidiaries and associates, JC&C employs around 240,000 people across Southeast Asia.

Statement pursuant to Rule 705(5) of the Listing Rules of the Singapore Exchange Securities Trading Limited ("SGX-ST")

The directors confirm that, to the best of their knowledge, nothing has come to the attention of the Board of Directors which may render the accompanying unaudited interim financial results for the six months ended 30th June 2022 to be false or misleading in any material aspect.

On behalf of the Board of Directors

Ben Keswick

Director

Steven Phan

Director

28th July 2022

(1) Higher revenue was mainly due to higher sales in Astra's automotive and heavy equipment and mining operations.

(2) Decrease in financing charges was mainly due to lower level of net debt.

(1) Fair value through other comprehensive income ("FVOCI")

Attributable to shareholders of the Company