JDS.L Regulatory News (JDS)

To: Business Editor 27th February 2017

For immediate release

Jardine Cycle & Carriage Limited

2016 Financial Statements and Dividend Announcement

The following announcement was issued today by the Company's 75%-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

27th February 2017

JARDINE CYCLE & CARRIAGE LIMITED

2016 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

· Underlying earnings per share up 3%

· Improved contribution from Astra

· Strong performance across Direct Motor Interests

· Higher contribution from Other Interests

"The outlook for 2017 appears positive as Astra should benefit from improving economic

conditions in Indonesia and higher coal prices, while the Group's Direct Motor Interests and

Other Interests are expected to perform satisfactorily." 

Ben Keswick, Chairman

27th February 2017

The exchange rate of US$1=S$1.44 (31st December 2015: US$1=S$1.41) was used for translating assets and liabilities at the balance sheet date and US$1=S$1.38 (2015: US$1=S$1.38) was used for translating the results for the year. The financial results for the year ended 31st December 2016 have been prepared in accordance with the International Financial Reporting Standards. These results have not been audited or reviewed by the auditors.

✝The accounts have been restated due to a change in accounting policy upon adoption of amendments to IAS 16 "Property, Plant

and Equipment' and IAS 41 'Agriculture', as set out in note 1 to the financial statements.

* The basis for calculating underlying earnings is set out in Note 5 of this report.

# The S$ equivalent is an estimate as the actual amount will be determined on Books Closure Date referred to in Note 15.

CHAIRMAN'S STATEMENT

Overview

The Group's results for the year were satisfactory. Improvements were seen in Astra's automotive, heavy equipment, mining contracting and agribusiness operations, offset in part by lower results from financial services due to a significant increase in loan provisions at Permata Bank. The Group's Direct Motor Interests and Other Interests both recorded higher contributions.

Performance

The Group's revenue for 2016 was US$15.8 billion, little changed from the prior year. Underlying profit attributable to shareholders was 7% higher at US$679 million, while underlying earnings per share rose 3% to US¢172, with the lower increase due to the effect of the rights issue in 2015. Profit attributable to shareholders was US$702 million after accounting for a net non-trading profit of US$23 million, due to a gain on sale of a property and investment property valuations. This compares to profit attributable to shareholders in 2015 of US$691 million, which included a net non-trading gain of US$59 million.

Astra's contribution to the Group's underlying profit of US$500 million was up 6%. The Group's Direct Motor Interests contributed US$167 million to the Group's underlying profit, up 18%, and its Other Interests contributed US$33 million, 11% higher than in 2015.

The Board is recommending a final one-tier tax-exempt dividend of US¢56 per share (2015: US¢51 per share) which together with the interim dividend will produce a total dividend of US¢74 per share (2015: US¢69 per share).

Business Activities

Jardine Cycle & Carriage's ("JC&C") strategy is to pursue the expansion of its business interests in Southeast Asia. This includes supporting the growth of Astra in both its existing operations and new businesses; strengthening its regional Direct Motor Interests, currently operating in Vietnam, Singapore, Malaysia, Indonesia and Myanmar; and developing its Other Interests by investing in market-leading companies that provide exposure to new business sectors in regional economies.

Astra

During the year, Astra consolidated its real estate interests into a new property division to give greater focus to this sector. The current projects comprise the Anandamaya Residences, Astra's 60%-owned luxury residential development in Jakarta's Central Business District, and the adjacent grade A office tower, Menara Astra. In October 2016, PT Astra Land Indonesia, owned 50% by Astra and 50% by Hongkong Land, signed an agreement with a subsidiary of PT Modernland Realty Tbk to acquire and jointly develop a 67-hectare site in Cakung in East Jakarta.

In order to further strengthen its capital base, Astra's 44.6%-held joint venture, Permata Bank is planning a US$220 million rights issue in the first half of 2017, of which US$110 million has already been injected as a capital advance by Astra and Standard Chartered Bank, its two major shareholders. Combined with the US$420 million rights issue completed by the bank in June 2016, this raises some US$640 million of new capital.

Direct Motor Interests

In 2016, Dai Quang Minh Real Estate Investment Joint Stock Company ("DQM") became a subsidiary of the Group's 25.1%-held associate, Truong Hai Auto Corporation. DQM is a real estate company that is developing 1.3 million sq. m. of land within the prime Thu Thiem New Urban Area, District 2, in Ho Chi Minh City. The project is a mixed-use development of residential and commercial buildings, a marina, nature parks and other amenities. In December 2016, DQM recognised an initial profit arising on units sold at its completed development properties.

The Group's 59.1%-owned Malaysian subsidiary, Cycle & Carriage Bintang Berhad, continued its Mercedes-Benz dealership network upgrade and expansion to 12 outlets in West Malaysia. In January 2017, CCB announced a proposed US$14 million acquisition of a strategically located 4,240 sq. m. site at Sungei Besi, Kuala Lumpur, to establish a new Autohaus.

In December 2016, JC&C increased its interest in PT Tunas Ridean Tbk from 43.8% to 44.4%.

Other Interests

Siam City Cement Public Company Limited ("SCCC"), in which JC&C holds a 24.9% interest, has expanded its regional footprint to Bangladesh, Sri Lanka and Vietnam through strategic acquisitions at a cost of some US$1.0 billion. In February 2017, SCCC announced a rights issue of approximately US$480 million to reduce loans used to fund these acquisitions.

The Group's 22.9%-held Refrigeration Electrical Engineering Corporation ("REE") is expanding its property interests with the construction of a new office tower due for completion by the end of 2017. The new building will increase REE's total lettable space from 106,000 sq. m. to 140,000 sq. m.

People

Despite facing challenging economic conditions, the Group achieved a good result in 2016 thanks to the commitment and hard work of its 240,000 employees across the region. On behalf of the Board, I would like to thank them for their contributions.

Outlook

The outlook for 2017 appears positive as Astra should benefit from improving economic conditions in Indonesia and higher coal prices, while the Group's Direct Motor Interests and Other Interests are expected to perform satisfactorily.

Ben Keswick

Chairman

27th February 2017

GROUP MANAGING DIRECTOR'S REVIEW

Overview

The Group's underlying profit increased 7% in 2016. This was underpinned by Astra's strong automotive performance, together with improved results in heavy equipment and mining, agribusiness, infrastructure and logistics, and a number of its financial services operations, which was partially offset by a loss arising from a significant increase in loan-loss provisions by Permata Bank. The Group also benefited from higher contributions from its Direct Motor Interests and Other Interests.

Performance

The Group reported an underlying profit attributable to shareholders of US$679 million, 7% higher than the previous year, while underlying earnings per share grew by 3% to US¢172, the smaller increase reflecting the effect of the rights issue undertaken in 2015. Excluding the Group's share of the Permata Bank loss, the Group's underlying profit would have grown 25% to US$791 million. 

Profit attributable to shareholders at US$702 million included a net non-trading gain of US$23 million primarily from a land sale and investment property revaluations. This compares to profit attributable to shareholders in 2015 of US$691 million, after accounting for a net non-trading gain of US$59 million arising mainly from the reversal of an impairment charge of US$43 million in respect of the Group's investment in Truong Hai Auto Corporation and a revaluation gain of US$17 million on investment properties.

The Group's net cash, excluding borrowings within Astra's financial services subsidiaries, increased to US$709 million at the end of 2016 from US$255 million at the end of the prior year, due largely to strong operating cashflows within Astra. Net debt within Astra's financial services subsidiaries was US$3.6 billion, compared to US$3.2 billion at the end of 2015. JC&C's net cash was US$154 million, compared to US$136 million at the end of 2015.

Group Review

Astra

Astra reported a net profit equivalent to US$1,137 million under Indonesian accounting standards, a 5% increase in its local currency terms. Higher contributions from automotive, heavy equipment and mining, agribusiness and infrastructure and logistics, were partially offset by a lower contribution from financial services.

Automotive

Net income from the group's automotive businesses in Indonesia increased by 23% to US$688 million. This was largely due to successful new model introductions which also benefited margins.

The wholesale market for cars increased by 5% to 1.1 million units. Astra's car sales were 16% higher at 591,000 units, resulting in an increase in market share from 50% to 56%. Astra launched 14 new models and nine revamped models during the year.

The wholesale market for motorcycles decreased by 8% to 5.9 million units, while Astra Honda Motor's domestic sales were 2% lower at 4.4 million units. However, its market share increased from 69% to 74%, supported by the launch of seven new models and eight revamped models in 2016.

Net income from the component business, Astra Otoparts, increased 31% to US$31 million, with higher revenue from its OEM and after-market segments combined with higher earnings in its associated companies.

Financial Services

Net income from the financial services businesses declined 78% to US$59 million. Improved contributions from Federal International Finance, Toyota Astra Financial Services and Asuransi Astra Buana were more than offset by declines in the other financial services businesses, principally due to a loss recorded by Permata Bank following a significant increase in loan-loss provisions in its commercial loan book. Excluding this loss, the net income from the financial services businesses would have risen 7% to US$282 million.

The consumer finance businesses saw a 21% increase in the amount financed, which rose to US$5.5 billion, including balances financed through joint bank financing without recourse. The car-focused Astra Sedaya Finance reported net income 4% lower at US$70 million following a reduction in used car financing, whereas Toyota Astra Financial Services recorded net income up 15% at US$26 million. Motorcycle-focused Federal International Finance's net income was up 20% at US$135 million, benefiting from loan product diversification.

The amount financed through the group's heavy equipment-focused finance operations increased by 20% to US$352 million. Surya Artha Nusantara Finance, which specialises in small and medium heavy equipment financing, reported net income 26% lower at US$6 million.

Astra's 44.6%-held joint venture, Permata Bank, reported a net loss of US$486 million compared with a net income of US$18 million in 2015. The decline was due to a significant increase in loan-loss provisions amounting to US$921 million, which saw the bank's gross non-performing loan ratio rise from 2.7% at the end of 2015 to 8.8% at the end of 2016, while its net non-performing loan ratio rose from 1.4% to 2.2%. In order to further strengthen its capital base, the bank is to undertake a US$220 million rights issue in the first half of 2017, of which US$110 million has already been injected as a capital advance by Astra and Standard Chartered Bank, its two major shareholders. Combined with the US$420 million rights issue completed in June 2016, this raises approximately US$640 million of new capital.

Net Income at general insurance company, Asuransi Astra Buana, was slightly higher at US$69 million, primarily due to increased investment income. During the year, Astra's life insurance joint venture, Astra Aviva Life, acquired over 158,000 individual life customers and 133,000 participants for its corporate employee benefits programmes, bringing the respective totals to 228,000 and 596,000 at the end of 2016.

Heavy Equipment and Mining

Net income from the heavy equipment and mining businesses increased by 30% to US$227 million.

United Tractors, which is 59.5%-owned, reported net income 30% higher at US$375 million due to the absence of an impairment charge on the carrying value of its coal mining properties, which had affected its 2015 result. Excluding the impact of this impairment charge in 2015, 2016's net income would have been 22% lower than the prior year. United Tractors recorded lower mining contracting revenue, caused largely by relatively weak coal prices for much of 2016, as well as a foreign exchange translation loss on its US dollar monetary assets.

In its construction machinery business, Komatsu heavy equipment sales rose 3% to 2,181 units, while parts and service revenue declined. The mining contracting operations of Pamapersada Nusantara recorded coal production little changed at 109 million tonnes, while overburden removal was 8% lower at 702 million bank cubic metres. United Tractors' mining subsidiaries reported 48% higher coal sales at 6.8 million tonnes.

General contractor Acset Indonusa, a 50.1%-owned subsidiary of United Tractors, reported net income up 63% at US$5 million. Acset secured new contracts worth US$283 million, compared with US$228 million in 2015. To support its business growth, Acset completed a US$45 million rights issue in June 2016.

Agribusiness

Net income from the agribusiness division increased significantly to US$120 million from US$37 million.

Astra Agro Lestari, which is 79.7%-owned, reported net income of US$150 million, up from US$46 million, due to the benefit of the stronger rupiah on the translation of its US dollar monetary liabilities and improved revenue from higher crude palm oil prices. Crude palm oil sold was 3% lower at one million tonnes, while average crude palm oil prices were 11% higher at Rp7,768/kg. Olein sales were 22% lower at 320,000 tonnes. To strengthen its balance sheet, Astra Agro Lestari completed a US$300 million rights issue in June 2016.

Infrastructure and Logistics

Higher earnings from the infrastructure and logistics businesses led to their net income increasing by 35% to US$20 million.

The 72km Tangerang-Merak toll road, operated by 79.3%-owned Marga Mandalasakti, saw traffic volumes increase by 3% to 48 million vehicles. Construction continues at the wholly-owned 41km Jombang-Mojokerto toll road, where 20km is already operational. At the 73km Semarang-Solo toll road, in which Astra has a 25% interest, 23km is now operational.

In January 2017, Astra completed the acquisition of an initial 40% interest in PT Baskhara Utama Sedaya, which owns 45% of the operator of the fully operational 116km Cikopo-Palimanan toll road, and has subsequently agreed to acquire the remaining 60% interest.

Along with its 40% stake in the 11km Kunciran-Serpong toll road and a 25% stake in the 30km Serpong-Balaraja toll road, both of which are greenfield, the group's total interest in toll roads amounts to 343km.

PAM Lyonnaise Jaya, which operates the western Jakarta water utility system, experienced a 1% increase in sales volume to 162 million cubic metres.

Serasi Autoraya's net income rose by 96% to US$8 million, where higher net margins in its car leasing and rental, used vehicle sales and logistics businesses outweighed the effect of a 3% decline in contracted vehicles in its car leasing and rental business.

Information Technology

Net income from the information technology division decreased by 4% to US$15 million. Astra Graphia, which is 76.9%-owned, reported a 4% decline in net income to US$19 million, despite an increase in revenue mainly due to lower net margins.

Property

Net income from the group's new property division was US$8 million, compared with US$16 million in 2015. The reduction was primarily due to a lower revaluation gain on its grade A office tower development, Menara Astra.

Construction continues to progress at the 93%-sold Anandamaya Residences, the group's 60%-owned luxury residential development in Jakarta's Central Business District, which together with the adjacent grade A office tower, Menara Astra, are on schedule for completion in 2018.

Direct Motor Interests

The Group's Direct Motor Interests contributed a profit of US$167 million, an 18% increase from the previous year.

Vietnam

In Vietnam, 25.1%-owned Truong Hai Auto Corporation ("Thaco") contributed a profit of US$94 million, a 10% increase. The improvement was due to a higher automotive profit following an increase in vehicle unit sales and the recognition of an initial profit from its real estate business through Dai Quang Minh Real Estate Investment Joint Stock Company, which is now a subsidiary of Thaco. The vehicle market in Vietnam grew by 26% to 352,300 units, while Thaco's overall sales grew by 39% to 110,500 units. Its passenger car sales grew by 54% to 63,500 units and its commercial vehicle sales increased by 23% to 47,100 units, although it did suffer lower margins and increased operating and financing costs.

Singapore

The Singapore passenger car market grew 52% to 87,500 units following an increase in the number of certificates of entitlement. The Group's Singapore motor operations saw earnings grow 26% to US$49 million due to a 45% increase in passenger car sales to 12,500 units, together with improved contributions from used cars and parts. The Group's passenger car market share saw a slight decline from 15% to 14%.

Malaysia

There was a contribution of US$6 million from 59.1%-owned Cycle & Carriage Bintang in Malaysia, which included the recognition of dividend income received from Mercedes-Benz Malaysia. This represented a 28% decline due to lower margins following changes in the sales mix despite an increase in unit sales.

Indonesia

In Indonesia, 44.4%-owned Tunas Ridean performed well with a contribution of US$18 million, 94% up on the previous year, due to stronger contributions from its automotive and rental operations and from 49%-owned Mandiri Tunas Finance. Motor car sales were 17% higher at 51,000 units, while motorcycle sales were stable at 206,300 units.

Other Interests

The Group's Other Interests comprising 24.9%-held Siam City Cement Public Company Limited ("SCCC") in Thailand and 22.9%-held Refrigeration Electrical Engineering Corporation ("REE") in Vietnam, contributed US$33 million, an increase of 11%.

SCCC reported a profit equivalent to US$111 million for 2016, a reduction of 15% in local currency terms. Its contribution to JC&C was US$22 million for the year, compared to US$21 million for the nine months of ownership in 2015. SCCC's lower earnings were mainly due to the decline in domestic cement prices, partly offset by the contribution from new acquisitions.

In line with its strategy to broaden its regional exposure, SCCC acquired 99% of Holcim (Lanka) Limited for US$374 million in August 2016, and a 100% interest in Cemex Thailand and Cemex Bangladesh in May 2016 at a total cost of US$61 million. Siam City Cement (Lanka) Limited (formerly Holcim (Lanka) Limited), is the market leader in Sri Lanka with an estimated 40% market share. SCCC is also acquiring, for an estimated US$524 million, a 65% interest in Holcim (Vietnam) Co. Ltd, the second largest player in Southern Vietnam with an estimated 20% market share. In February 2017, SCCC announced a rights issue of approximately US$480 million to reduce the loans used to fund these acquisitions.

REE's contribution was up 25% at US$11 million. Higher contribution from the M&E business segment was due to the completion of a larger number of projects, while the power and water business segment achieved a satisfactory performance. The property development and management segment performed well with improvement in office leasing rates, alongside a higher contribution from its 29%-held development property associate, Saigon Real Estate.

Alex Newbigging

Group Managing Director

27th February 2017

1 Basis of preparation

The financial statements are consistent with those set out in the 2015 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 2015 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 except for the adoption of IAS 16 'Property, Plant and Equipment' and IAS 41 'Agriculture'. These IASs provide definition to a bearer plant and require bearer plants to be accounted for in the same way as property, plant and equipment in IAS 16, because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain within the scope of IAS 41. The adoption of these amendments has been accounted for retrospectively and the comparative financial statements have been restated. The adoption has resulted in an increase in the profit attributable to shareholders for the financial year 2015 by US$2.7 million and a decrease in the shareholders' funds as at 31st December 2015 by US$100.8 million.

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$1.4449 (2015: US$1=S$1.4144), US$1=RM4.4852 (2015: US$1=RM4.2945), US$1=IDR13,436 (2015: US$1=IDR13,795), US$1=VND22,765 (2015: US$1=VND22,495) and US$1=THB35.8090 (2015: US$1=THB36.1000).

The exchange rates used for translating the results for the year are US$1=S$1.3833 (2015: US$1 =S$1.3784), US$1=RM4.1462 (2015: US$1=RM3.9380), US$1=IDR13,330 (2015: US$1=IDR13,458), US$1=VND22,373 (2015: US$1=VND21,959) and US$1=THB35.2710 (2015: US$1=THB34.4138).

2 Net operating costs and operating profit

(1) Decrease due mainly to impairment of coal mining properties in 2015

nm - not meaningful

 (1) Decrease due mainly to impairment of coal mining properties in 2015

 (2) Increase due mainly to net impact of stronger rupiah on monetary assets and liabilities denominated in US dollars

3 Revenue and Profit after tax

4 Dividends

The Board is recommending a final dividend of US¢56 per share which, together with the interim dividend of US¢18 per share, will give a total dividend for the year of US¢74 per share.

5 Earnings per share

* The weighted average number of shares in issue for 2015 has taken into account the effect of the rights issue completed in July 2015, in accordance with IAS 33 Earnings per Share.

As at 31st December 2015 and 2016, there were no dilutive potential ordinary shares in issue.

A reconciliation of the profit attributable to shareholders and underlying profit attributable to shareholders is as follows:

6 Segment information

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board for the purpose of resource allocation and performance assessment. Set out below is an analysis of the segment information: