JDS.L Regulatory News (JDS)

To: Business Editor 29th April 2015

For immediate release

Jardine Cycle & Carriage Limited

2015 First 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

29th April 2015

JARDINE CYCLE & CARRIAGE LIMITED

2015 FIRST QUARTER FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

· Underlying earnings per share down 18%

· Lower rupiah earnings in Astra further reduced on translation into US dollars

· Improved performance from Truong Hai Auto Corporation

· 25% stake acquired in leading Thai cement manufacturer

"The Group is facing greater challenges in Indonesia with lower levels of economic growth, depressed commodity markets and increased competition in the car sector, while a weaker rupiah exchange rate continues to reduce Astra's contribution. Nevertheless, our businesses remain at the forefront of their chosen markets and are underpinned by the strength of their balance sheets."

Ben Keswick, Chairman

29th April 2015

The exchange rate of US$1=S$1.38 (31st December 2014: US$1=S$1.32) was used for translating assets and liabilities at the balance

sheet date and US$1=S$1.36 (31st March 2014: US$1=S$1.27) was used for translating the results for the period.

The financial results for the three months ended 31st March 2015 have been prepared in accordance with the International

Financial Reporting Standards. These results have not been audited or reviewed by the independent auditor.

CHAIRMAN'S STATEMENT

Overview

The Group's underlying profit in the first quarter was lower, primarily due to reduced contributions from Astra's automotive operations and agribusiness. The Group's Direct Motor Interests showed improved results. In April of this year, the Company completed the acquisition of a 24.9% interest in publicly-listed Siam City Cement Public Company Limited, the second largest cement manufacturer in Thailand.

Performance

The Group's revenue in the first quarter declined by 14% to US$4.0 billion. Profit attributable to shareholders was 18% lower at US$178 million, and earnings per share at US¢50.07 were also 18% down.

Astra contributed US$152 million to the Group's underlying profit, as a 16% decline in its rupiah results translated into a 24% fall in US dollars. The rupiah was on average 9% weaker than in the first quarter of 2014. The Group's Direct Motor Interests contributed an underlying profit of US$31 million, a 63% improvement over the previous year.

The Group had consolidated net cash, excluding borrowings within Astra's financial services subsidiaries of US$125 million, compared to the net debt at the end of December 2014 of US$239 million, mainly due to higher operating cash flows. Net debt within Astra's financial services subsidiaries was US$3.5 billion at the end of March, compared to US$3.7 billion at the end of 2014. At the end of March 2015, the Company had net debt of US$53 million, up from US$47 million at the end of last year. The Company's net debt subsequently increased following the purchase of the stake in Siam City Cement for US$615 million, which was funded by bank borrowings.

The Board has not declared a dividend for the first quarter ended 31st March 2015 (31st March 2014: Nil).

Group Review

Astra International

Astra reported a net profit equivalent to US$310 million under Indonesian accounting standards, 16% down in its reporting currency with declines in its automotive, agribusiness and infrastructure segments. 

Automotive

Overall automotive demand weakened during the first quarter due to a general slow-down in the economy and the lack of meaningful new product launches. Furthermore, discounting in the car market caused by manufacturing overcapacity continued to have a negative impact on earnings. The group's component businesses also made a lower contribution due to a weakening of the rupiah.

The wholesale market for cars fell by 14% to 282,000 units. Astra's car sales fell by 21% to 137,000 units with its market share decreasing to 49% from 53%. The group launched six new models and four revamped models during the quarter.

The wholesale market for motorcycles decreased by 19% to 1.6 million units. Astra Honda Motor's sales were reduced by 13% to 1.1 million units, with its market share increasing to 68%. Astra Honda Motor launched two new models during the quarter.

Astra Otoparts, the group's component manufacturing business, saw net income fall by 67% to US$7 million, due to lower volumes and reduced manufacturing margins.

Financial Services

Net income from the group's financial services businesses rose by 21% to US$93 million. Earnings growth across most of the financial services portfolio, including Asuransi Astra Buana, Permata Bank and Federal International Finance, was offset by a decline in contribution from SAN Finance and Komatsu Astra Finance.

The consumer finance sector saw increased activity, and Astra's automotive-focused operations increased their market shares, growing the amount financed by 4% to US$1.2 billion, including balances financed through joint bank financing without recourse. The car-focused Astra Sedaya Finance recorded net income up 11% at US$23 million, while motorcycle-focused Federal International Finance reported net income up 7% at US$25 million.

The amount financed through the heavy equipment-focused finance operations declined by 6% to US$68 million due to a reduction in sales.

Astra's 45%-held joint venture, Permata Bank, reported net income 54% higher at US$44 million. Group insurance company, Asuransi Astra Buana, recorded higher earnings due to an increase in the contribution from investment earnings. The group's new life insurance joint venture with Aviva plc, which markets its products and services as "Astra Life powered by Aviva", performed in line with expectations during the first quarter.

Heavy Equipment and Mining

United Tractors, which is 60%-owned, reported a 9% decrease in revenue although net income rose 4% to US$127 million.

In the construction machinery business, revenue declined 12%, reflecting a 37% reduction in Komatsu heavy equipment sales to 763 units, which was partly offset by higher parts revenue.

The contract mining operations of subsidiary, Pamapersada Nusantara, reported a 13% decrease in revenue as contract coal production declined 9% to 25 million tonnes, with contract overburden removal down 15% at 174 million bank cubic metres.

United Tractors' mining subsidiaries reported coal sales 4% higher at 1.7 million tonnes leading to an increase in revenue of 2%, despite average coal sale prices declining by 16%. United Tractors and its subsidiaries own interests in nine coal mines with combined reserves estimated at 404 million tonnes.

During the first quarter, United Tractors completed the acquisition of a 40% shareholding in listed construction firm Acset Indonusa and plans to acquire a further 10.1%. Acset Indonusa is active in a range of construction activities including foundations, civil works and mechanical engineering services. The earnings contribution during the first quarter was negligible.

Agribusiness

Astra Agro Lestari, which is 80%-held, reported net income of US$12 million, down 80%. Average crude palm oil prices achieved were 12% lower compared with the same period last year at Rp7,839/kg, and crude palm oil sales were 18% lower at 258,000 tonnes, while olein sales increased by 46% to 60,000 tonnes.

Infrastructure, Logistics and Others

Net income from infrastructure, logistics and others fell by 59% to US$3 million, mainly due to the initial losses arising on the commencement of operations of section 1 of the Kertosono-Mojokerto toll road.

The 72.5 km Tangerang-Merak toll road, operated by 79%-owned Marga Mandalasakti, reported a 9% increase in traffic volumes to 11 million vehicles and a 2% increase in average tariffs. Construction continues at the wholly-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 timely 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 roads.

Serasi Autoraya's revenue declined due to a 7% decrease in the number of vehicles under contract at its TRAC car rental business to 29,000 and lower used car sales. The net income decreased by 58% to US$1 million.

Anandamaya Residences, the group's 60%-held luxury residential development project located in Jakarta's Central Business District, continues to achieve market leading pricing and strong buyer interest with bookings being close to 90%.

Information Technology

Astra Graphia, 77%-owned, which is active in the area of document information and communication technology solutions and is the sole distributor of Fuji Xerox office equipment in Indonesia, reported net income of US$4 million, up 42%.

Direct Motor Interests

The Group's Direct Motor Interests contributed a profit of US$31 million, 63% up on the previous year, due primarily to the strong performance from Truong Hai Auto Corporation in Vietnam which benefited from significantly higher unit sales alongside good margins and lower financing costs. The contribution from the Singapore motor operations was slightly down as the improved earnings in local currency from higher unit sales were offset by the impact on translation of a weaker Singapore dollar. In Malaysia, Cycle & Carriage Bintang's contribution improved despite relatively stable unit sales as pressure on margins eased. In Indonesia, Tunas Ridean's profit declined due to lower motor car and motorcycle unit sales, alongside continued motor car margin pressure and higher interest expenses, partly offset by improved contribution from its 49%-owned associate, Mandiri Tunas Finance, which benefited from a larger loan portfolio.

Other Interests

The Group holds interests in certain market leading businesses in Southeast Asia that it intends to support over the long-term.  

In February 2015, the Company increased its shareholding in publicly-listed Refrigeration Electrical Engineering Corporation ("REE") in Vietnam from 19% to 22% at a cost of US$12 million. REE is a diversified business group operating in the fields of mechanical and electrical engineering, real estate and strategic investment in power and water utility infrastructure. The Group will equity account its share of REE's profit, commencing in the second quarter.

The Company completed the acquisition of a 24.9% interest in Siam City Cement, which is the second largest cement manufacturer in Thailand owning three cement plants with a total production capacity of 14.5 million tonnes per annum. In addition to cement, the company produces concrete and other building materials.

Outlook

The Group is facing greater challengs in Indonesia with lower levels of economic growth, depressed commodity markets and increased competition in the car sector, while a weaker rupiah exchange rate continues to reduce Astra's contribution. Nevertheless, our businesses remain at the forefront of their chosen markets and are underpinned by the strength of their balance sheets.

Ben Keswick

Chairman

29th April 2015

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 three months ended 31st March 2015 to be false or misleading in any material respect.

On behalf of the Directors

Ben Keswick

Director

Hassan Abas

Director

29th April 2015

nm - not meaningful

1 Basis of preparation

The financial statements are consistent with those set out in the 2014 audited accounts which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). There have been no changes to the accounting policies described in the 2014 audited accounts except for the adoption of the following amendments:

The adoption of these amendments did not have any impact on the results of the Group.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. Estimates and judgments used in preparing the financial statements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The exchange rates used for translating assets and liabilities at the balance sheet date are US$1=S$1.3762 (2014: US$1=S$1.3205), US$1=RM3.7123 (2014: US$1=RM3.4928), US$1=IDR13,084 (2014: US$1=IDR12,440) and US$1=VND21,535 (2014: US$1=VND21,388).

The exchange rates used for translating the results for the period are US$1=S$1.3616 (2014: US$1 =S$1.2681), US$1=RM3.6502 (2014: US$1=RM3.2983), US$1=IDR12,857 (2014: US$1=IDR11,755) and US$1=VND21,417 (2014: US$1=VND21,095).

2 Net operating costs and operating profit

3 Tax

The provision for income tax is based on the statutory tax rates of the respective countries in which the companies operate after taking into account non-deductible expenses and group tax relief.

4 Earnings per share

5 Borrowings

Certain subsidiaries of the Group have pledged their assets in order to obtain bank facilities from financial institutions. The value of assets pledged was US$2,350.3 million (31st December 2014: US$2,555.8 million).

6 Share capital

The Company did not hold any treasury shares as at 31st March 2015 (31st December 2014: Nil).

The Company did not have any unissued shares under convertibles as at 31st March 2015 (31st December 2014: Nil).

There were no rights, bonus or equity issues during the period between 1st January 2015 and 31st March 2015.

7 Revenue reserve

8 Other reserves

9 Non-controlling interests