JDS.L Regulatory News (JDS)

To: Business Editor 4th November 2014

For immediate release

Jardine Cycle & Carriage Limited

2014 Third Quarter Financial Statements and Dividend Announcement

The following announcement was issued today by the Company's 74%-owned subsidiary, Jardine Cycle & Carriage Limited.

For further information, please contact:

Jardine Matheson Limited

Neil M McNamara (852) 2843 8227

Brunswick Group Limited

Karin Wong (852) 3512 5077

4th November 2014

JARDINE CYCLE & CARRIAGE LIMITED

2014 THIRD QUARTER FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

· Underlying earnings per share 6% down

· Astra's profit in rupiah terms was up, but its contribution was down on translation into US dollars

· Improved earnings from the Group's other motor interests

"Astra's trading performance is expected to remain steady for the remainder of the year but its contribution will again be impacted on translation by a weaker rupiah exchange rate. The results from the Group's other motor interests are expected to show an improvement. Overall the Group's full year results are expected to be lower than the prior year."

Ben Keswick, Chairman

4th November 2014

Group Results

The exchange rate of US$1=S$1.27 (31st December 2013: US$1=S$1.27) was used for translating assets and liabilities at the balance sheet date and US$1=S$1.26 (30th September 2013: US$1=S$1.25) was used for translating the results for the period.

The financial results for the nine months ended 30th September 2014 have been prepared in accordance with the International Financial Reporting Standards. These results have not been audited or reviewed by the auditors.

* The basis for calculating underlying earnings is set out in Note 4 of this report. 

CHAIRMAN'S STATEMENT

Overview

The Group's profit for the first nine months of the year was down on the previous year despite an increase in Astra's performance in rupiah terms owing to the impact of a weaker rupiah. The Group's other motor interests produced an improved result.

Performance

The Group's revenue for the first nine months of the year was 6% lower at US$14.1 billion. Underlying profit was down 6% at US$628 million, while underlying earnings per share also declined by 6% to US$1.77. Profit attributable to shareholders at US$646 million was 4% lower, after accounting for a net gain in non-trading items of US$18 million attributable largely to the recognition of negative goodwill arising on the acquisition of a 50% interest in Astra Aviva Life.

Astra contributed US$579 million to the Group's underlying profit as the 5% increase in Astra's rupiah result was translated into a 10% fall in US dollars terms due to an exchange rate which was on average 14% weaker than in the first nine months of 2013. The contribution to underlying profit from the Group's other motor interests of US$59 million was up 46%.

The Group's consolidated net debt at the end of September 2014 was US$320 million, excluding borrowings within Astra's financial services subsidiaries, representing 3% of total equity, compared to US$303 million at the end of 2013, which also represented 3% of total equity. Net debt within Astra's financial services subsidiaries at the end of September was US$3.6 billion, slightly higher than the previous year end as the weaker rupiah largely offset the increase in the volumes financed.

The Board has not declared a dividend for the quarter ended 30th September 2014 (30th September 2013: Nil).

Group Review

Astra

Astra reported a net profit equivalent to US$1,232 million under Indonesian accounting standards, 8% up in its reporting currency. Improved results mainly from its agribusiness and contract mining operations were partially offset by lower earnings from its automotive businesses. Astra also benefited from a non-trading gain on acquisition of 50% of Astra Aviva Life and the gain on disposal of AGIT Monitise Indonesia. Excluding the non-trading gain, Astra's underlying profit was 5% up in its reporting currency.

Automotive

Discounting in the car market continued to have a negative impact on margins in the sales operations. The contribution from Astra Otoparts also reflected the reduction in the group's interest from 96% to 80% in the second quarter of 2013.

The wholesale market for cars grew by 3% to 933,000 units. Astra's car sales fell by 1% to 476,000 units with its market share decreasing from 53% to 51%. The group launched 18 new models and nine revamped models during the period.

The wholesale market for motorcycles increased by 5% to 6.1 million units. Astra Honda Motor's sales grew by 9% to 3.8 million units, with its market share increasing from 60% to 63%. Astra Honda Motor launched one new model and 13 revamped models during the period.

Astra Otoparts saw 18% higher sales volumes while net income increased slightly to US$55 million on lower manufacturing margins.

Financial Services

Net income from Astra's financial services businesses increased by 14% to US$322 million after accounting for a US$37 million non-trading gain arising from the recognition of negative goodwill on the acquisition of a 50% interest in Astra Aviva Life. Excluding the non-trading gain, net income from the financial services businesses increased by 1% to US$285 million. Strong growth across most of the consumer financial services portfolio was largely offset by a lower contribution from Astra Sedaya Finance, following the sale of an effective 14% interest in the second quarter, and Permata Bank.

The amount financed through Astra's automotive-focused consumer finance operations grew by 11% to US$4.1 billion, including balances financed through joint bank financing without recourse. The amount financed through the heavy equipment-focused finance operations declined by 27% to US$228 million due to a reduction in sales.

Astra Sedaya Finance, the group's car-focused consumer finance company, recorded net income of US$74 million, an increase of 14%, driven by financing a higher proportion of Astra's new car sales.

Federal International Finance, the group's motorcycle-focused consumer finance company, reported net income of US$81 million, an increase of 12%, due to higher new and used motorcycle financing.

Astra's 45%-held joint venture, Permata Bank, reported net income of US$105 million, a decrease of 6%, due to an increase in funding costs.

Group insurance company, Asuransi Astra Buana, recorded 11% higher net income of US$73 million due to growth in gross written premiums and an increase in contribution from investment earnings.

Heavy Equipment and Mining

United Tractors, which is 60%-owned, reported a 9% increase in net revenue and a 41% improvement in net income to US$406 million.

In the construction machinery business, net revenue decreased by 3% reflecting a 10% decline in Komatsu heavy equipment sales to 2,982 units, partly offset by higher parts and service revenue.

The contract mining operations of subsidiary, Pamapersada Nusantara, benefited from improved coal volumes on lower stripping ratios. It reported an 11% increase in net revenue as contract coal production increased 15% to 90 million tonnes, while contract overburden removal decreased 5% to 606 million bank cubic metres.

United Tractors' mining subsidiaries reported an increase in net revenue of 52%, with coal sales 64% higher at 4.7 million tonnes, although the average coal sale prices declined by 7%. Increased fuel costs also reduced the gross profit margins. United Tractors and its subsidiaries own interests in nine coal mines with combined reserves estimated at 409 million tonnes.

United Tractors is in the process of undertaking a review of the carrying value of its coal mining properties due to ongoing subdued market conditions. If, as a consequence of this review, United Tractors is required to reduce the carrying value of its coal mining properties, any such reduction will be made in the fourth quarter.

Agribusiness

Astra Agro Lestari, which is 80%-held, reported net income of US$160 million, up 107%. Average crude palm oil prices achieved were 24% higher at Rp8,474/kg, although crude palm oil sales decreased by 9% to 1.0 million tonnes. Astra Agro Lestari's refinery in West Sulawesi sold 144,000 tonnes of olein during the period.

Infrastructure, Logistics and Others

The contribution to Astra's net income from infrastructure, logistics and others fell by 26% to US$21 million.

The 72.5 km Tangerang-Merak toll road operated by 79%-owned Marga Mandalasakti reported a 6% increase in traffic volume to 32 million vehicles and a 13% increase in average tariffs. Construction continues at the 95%-owned greenfield 40.5 km Kertosono-Mojokerto toll road near Surabaya. Section 1, being 14.7 km, began operations in October 2014, and further stages are expected to be operational during 2015, subject to the completion of land acquisitions. Taken together with Astratel's 40% interest in the greenfield 11.2 km Kunciran-Serpong toll road on Jakarta's outer ring-road, the group has an interest in 124.2 km of toll road.

Serasi Autoraya's revenue improved despite the number of vehicles under contract at its TRAC car rental business being 3% lower at 30,000, driven by higher used car sales. The benefit was, however, offset by lower margins associated with leases to mining companies. The net income decreased by 33% to US$8 million.

Sales successfully commenced during the third quarter at Anandamaya Residences, the group's 60%-held luxury residential development project located in Jakarta's Central Business District. The high-end development consists of approximately 500 apartment units, with completion expected in 2018.

Information Technology

Astra Graphia, 77%-owned, is active in the area of document information and communication technology solutions and is the sole distributor of Fuji Xerox office equipment in Indonesia. It reported net income up 33% to US$15 million as it benefited from a gain of US$4 million in the second quarter on the disposal of its 51% interest in AGIT Monitise Indonesia.  

Group's Other Motor Interests

The Group's other motor interests contributed a profit of US$59 million, 46% up on the previous year, due largely to an improvement in the performance of Truong Hai Auto Corporation.

Earnings from the Singapore motor operations were 16% higher following an improved Mercedes-Benz performance as well as higher profits from after-sales and taxi sales. In Vietnam, Truong Hai Auto Corporation's contribution was almost three times the previous year following strong vehicle sales and good margins as well as lower financing costs. In Malaysia, Cycle & Carriage Bintang's contribution was up 44% from a low base, benefiting from good demand for new models although margins remained under pressure. In Indonesia, Tunas Ridean's contribution was 27% lower in the face of competitive pressure in the car market.

Outlook

Astra's trading performance is expected to remain steady for the remainder of the year but its contribution will again be impacted on translation by a weaker rupiah exchange rate. The results from the Group's other motor interests are expected to show an improvement. Overall the Group's full year results are expected to be lower than the prior year.

Ben Keswick

Chairman

4th November 2014

Statement pursuant to Rule 705(5) of the Listing Manual

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 nine months ended 30th September 2014 to be false or misleading in any material respect.

On behalf of the Directors

Ben Keswick

Director

Hassan Abas

Director

4th November 2014

For the three months ended 30th September 2014