INDONESIA-RELIANT conglomerate Jardine Cycle & Carriage (C&C) posted thinner earnings for the first quarter ended March 31.
A slowdown of the Indonesian economy continued to weigh on the group's main profit contributor, Astra International. The Singapore-listed group yesterday reported an 18 per cent drop in underlying profit attributable to shareholders to US$178 million (S$234.5 million).
Earnings per share fell by the same quantum to 50.07 US cents, pulled down by a weaker automotive market characterised by overcapacity and hefty discounts.
Astra's agri-business incurred a double whammy of lower palm oil prices and slower palm oil sales. The average price of palm oil fell by 12 per cent to 7,839 rupiah per kg (S$0.78 per kg), while crude palm oil sales were 18 per cent lower at 258,000 tonnes.
Jardine C&C group revenue shrank by 14 per cent to US$4.02 billion. Net asset value per share dipped by 1 per cent to US$12.92.
The group's direct motor interests contributed a profit of US$31 million, up 63 per cent from the previous year, fuelled primarily by the strong performance of Vietnam's Truong Hai Auto.
Contribution from Singapore motor operations was slightly down as improved earnings from higher unit sales were offset by a weaker Singapore dollar.
Group chairman Ben Keswick said: "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."
Jardine C&C had consolidated net cash, excluding borrowings within Astra's financial services subsidiaries, of US$125 million, from a net debt of US$239 million at the end of December. This was mainly on the back of higher operating cash flows.
Net debt within Astra's financial services subsidiaries was US$3.5 billion at the end of March, compared with US$3.7 billion at end-2014.
At the company level, it had a net debt of US$53 million at end-March, up from US$47 million at the end of last year. This followed the purchase of a stake in Siam City Cement for US$615 million.
Cash and equivalents stood at US$1.89 billion, up from US$1.7 billion.
This article was first published on Apr 30, 2015.
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