JDS.L Regulatory News (JDS)

To: Business Editor 8th November 2017

For immediate release

Jardine Cycle & Carriage Limited

2017 Third Quarter 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

8th November 2017

JARDINE CYCLE & CARRIAGE LIMITED

2017 THIRD QUARTER FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

· Underlying earnings per share up 14%

· Improved performances from most of Astra's businesses

· Lower contribution from non-Astra interests

"The outlook for the rest of the year is expected to remain positive as Astra's results will continue to benefit from increased commodity prices, although there are concerns over greater competition in the car market as well as increased provisioning in certain of its financing activities. The Group's Direct Motor Interests and Other Interests will continue to face market challenges."

Ben Keswick, Chairman

8th November 2017

The exchange rate of US$1=S$1.36 (31st December 2016: US$1=S$1.44) was used for translating assets and liabilities at the balance sheet date and US$1=S$1.38 (30th September 2016: US$1=S$1.37) was used for translating the results for the period.

The financial results for the nine months ended 30th September 2017 and 30th September 2016 have been prepared in accordance with International Financial Reporting Standards. These results have not been audited or reviewed by the auditors.

# The Group uses 'underlying profit' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in Note 4 to the financial statements. Management considers this to be a key measure which provides additional information to enhance understanding of the Group's underlying business performance.

CHAIRMAN'S STATEMENT

Overview

The Group achieved improved profits in the first nine months of the year with a stronger performance from Astra, offsetting lower profit contributions from the Group's Direct Motor Interests and Other Interests.

Performance

The Group's revenue for the nine months grew by 11% to US$13.0 billion with increases in most of Astra's businesses. The Group's underlying profit attributable to shareholders was 14% higher at US$590 million. Profit attributable to shareholders was up 19% at US$610 million after accounting for net non-trading gains of US$20 million. Earnings per share rose 19% to US¢154.

Astra contributed US$499 million to the Group's underlying profit, an increase of 25%. The Group's Direct Motor Interests contributed US$89 million, 21% down on the previous year, while the Group's Other interests contributed US$19 million, 13% lower.

The Group's net cash, excluding net borrowings within Astra's financial services subsidiaries was US$240 million at the end of September, compared to US$709 million at the end of December 2016. The reduction was due to investments made by Astra in toll roads, power plant and property, together with the Company's participation in the rights issue of Siam City Cement. Net debt within Astra's financial services subsidiaries was US$3.5 billion at the end of September, similar to the end of 2016. JC&C parent company's net cash was US$34 million, compared to US$154 million at the end of 2016, following its US$127 million subscription for Siam City Cement's rights issue in May.

The Board has not declared a dividend for the third quarter ended 30th September 2017 (third quarter ended 30th September 2016: Nil).

Group Review

Astra

Astra reported a net profit equivalent to US$1,062 million under Indonesian accounting standards for the nine months, 26% higher in its local currency, with increases seen in most of its operations. The group's automotive businesses achieved improved market shares for both cars and motorcycles, but experienced an increasingly competitive car market. The results from its financial services businesses improved with a return to profit by Permata Bank, while increased commodity prices led to a strong performance from heavy equipment and mining, as well as its agribusiness activities. 

Automotive

Net income from the group's automotive division increased by 10% to US$493 million, primarily due to higher car and motorcycle sales, although there was increasing discounting pressure in the car market.

The wholesale market for cars rose by 3% to 804,000 units. Astra's car sales were 5% higher at 444,000 units, resulting in its market share improving from 54% to 55%. The group launched nine new models and ten revamped models during the period.

The wholesale market for motorcycles was flat at 4.3 million units. Astra Honda Motor's domestic sales were, however, 2% higher at 3.2 million units, resulting in its market share improving from 73% to 75%. The group launched seven new models and fourteen revamped models during the period.

Net income of Astra Otoparts, the group's component business, increased 30% to US$28 million, reflecting higher earnings contributions from its joint venture and associate companies driven by increased sales volumes.

Financial Services 

Net income from the group's financial services division increased 42% to US$221 million, largely due to a return to profit at Permata Bank.

The group's consumer finance businesses saw a 6% increase in the amount financed, including amounts financed through joint bank financing without recourse, to US$4.2 billion. Car-focused Astra Sedaya Finance reported a 9% increase in net income at US$53 million. Toyota Astra Financial Services recorded a 33% decrease in net income to US$13 million following increases in loan loss provisions. Motorcycle-focused Federal International Finance's net income was 14% higher at US$109 million as it benefited from Honda's improved market share as well as loan product diversification.

The amount financed through the group's heavy equipment-focused finance operations increased by 56% to US$392 million. Net income at Surya Artha Nusantara Finance, which specialises in small and medium size heavy equipment financing, was 40% lower at US$3 million, mainly due to larger loan loss provisions.

Permata Bank, in which Astra holds a 44.6% interest, reported a net income of US$53 million for the period, compared with a net loss of US$93 million in 2016. The bank's gross non-performing loan ratio improved from 8.8% at the end of 2016 to 4.7% at 30th September 2017, while its net non-performing loan ratio improved from 2.2% to 1.8%. Permata Bank's return to profitability was mainly driven by an improvement in asset quality and the previously announced sale of a portfolio of its non-performing loans. 

Asuransi Astra Buana, the Group's general insurance company achieved higher investment income, and reported net income up 7% at US$56 million.

During the period, the Group's life insurance joint venture, Astra Aviva Life, acquired more than 185,000 new individual life customers and 290,000 new participants for its corporate employee benefits programmes, bringing the respective totals to 341,000 and 657,000 people being insured at the end of September 2017.

Heavy Equipment and Mining

The net income contribution from the group's heavy equipment and mining division increased by 80% to US$255 million.

United Tractors, which is 59.5%-owned, reported net income 80% higher at US$422 million. The increase was due to improved performances in its construction machinery, mining contracting and mining operations, all of which benefited from the strong coal prices.

In its construction machinery business, Komatsu heavy equipment sales were up 73% at 2,744 units, while parts and service revenues were also higher. The mining contracting operations of Pamapersada Nusantara recorded a 5% increase in coal production at 82 million tonnes, while overburden removal was up 12% at 585 million bank cubic metres. United Tractors' mining subsidiaries reported coal sales down 12% at 5 million tonnes, due to lower volumes in its coal trading business.

General contractor Acset Indonusa, a 50.1% subsidiary of United Tractors, reported net income up 178% at US$8 million, with US$536 million in new contracts secured, compared with US$188 million secured in the same period last year.

Agribusiness

Net income from the group's agribusiness division increased by 23% to US$84 million.

Astra Agro Lestari, which is 79.7%-owned, reported net income of US$105 million, up from US$86 million in 2016, benefiting from higher crude palm oil prices and sales volumes. Average crude palm oil prices achieved were up 10% at Rp8,309/kg, while sales of crude palm oil and its derivatives were 15% higher at 1.26 million tonnes compared with the same period last year.

Infrastructure and Logistics

The group's infrastructure and logistics division reported a net loss of US$5 million, compared with a net profit of US$16 million in the same period last year. This was mainly due to initial losses on the newly opened Cikopo-Palimanan toll road in which the group acquired a 45% interest earlier in the year and a loss on the disposal of the group's 49% interest in PAM Lyonnaise Jaya, a water concession with five years left to run. The 72.5km Tangerang-Merak toll road, operated by 79.3%-owned Marga Mandalasakti, saw traffic volumes increase by 6% to 37 million vehicles.

Serasi Autoraya's net income increased by 99% to US$10 million, due to higher net margins in its car leasing and rental, as well as logistics businesses, despite a 6% decline in vehicles under contract.

Information Technology

Net income from the group's information technology division was flat at US$8 million.  

Astra Graphia, which is 76.9%-owned, reported net income of US$10 million, mainly from increased revenue from its document solutions and office service businesses, partly offset by lower revenue from Information Technology Solutions.

Property

Net income from the group's property division was 15% higher at US$7 million, mainly due to higher recognised development earnings on its Anandamaya Residences project, which is scheduled for completion in 2018.

In September 2017, 50%-owned Astra Land Indonesia entered into an agreement to increase its shareholding in Astra Modern Land, which is developing a 67-hectare site in East Jakarta, from 50% to 67%.

Direct Motor Interests

The Group's Direct Motor Interests contributed a profit of US$89 million for the first nine months of 2017, 21% down on the comparable period in the prior year. The was due mainly to lower earnings from the automotive activities of Truong Hai Auto Corporation in Vietnam following a reduction in unit sales in the face of an increasingly competitive trading environment, partly offset by a contribution from its real estate business. Cycle & Carriage Singapore's earnings rose as they benefited from higher sales of both new and used cars. In Malaysia, Cycle & Carriage Bintang's contribution continued to suffer from intense competition in the premium car segment. In Indonesia, Tunas Ridean's contribution was lower due to weaker performances in its automotive and consumer finance businesses, partly offset by improved vehicle rental profits.

Other Interests

The Group's Other Interests comprising 25.5%-held Siam City Cement in Thailand and 22.9%-held Refrigeration Electrical Engineering Corporation ("REE") in Vietnam, contributed US$19 million, a decline of 13%. Siam City Cement's profit for the first nine months was significantly lower in local currency terms due mainly to reduced domestic cement prices and sales volumes together with one-off expenses. REE is performing well with strong contributions in the first nine months from all divisions: M&E, real estate, and power and water infrastructure.

Outlook

The outlook for the rest of the year is expected to remain positive as Astra's results will continue to benefit from the increased commodity prices, although there are concerns over greater competition in the car market as well as increased provisioning in certain of its financing activities. The Group's Direct Motor Interests and Other Interests will continue to face market challenges.

Ben Keswick

Chairman

8th November 2017

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 2017 to be false or misleading in any material respect.

On behalf of the Directors

Ben Keswick

Director

Hassan Abas

Director

8th November 2017

For the three months ended 30th September 2017

For the nine months ended 30th September 2017