Jardine Cycle & Carriage Ltd’s Latest Earnings: How Did The Direct Motors Business Perform?

Lawrence Nga

Calling Jardine Cycle & Carriage Ltd  (SGX: C07) a conglomerate would be fitting, given that the company has three segments, namely, Astra, Direct Motor Interests, and Other Strategic Interests.

In early March, Jardine Cycle & Carriage reported its 2017 full year earnings update. The conglomerate has three different businesses: Astra, direct motors and other interests. I thought it would be useful to have a look at the performance of the individual segments.

In this article, I will be running through the direct motors segment.

Source: FY17 Result Presentation

As a brief introduction, the company’s direct motor segment provides automotive related services like distribution, and after-market services in five countries. The table above gives a quick summary of the underlying profitability of each country in 2017.

If we dive deeper, Jardine C&C also provided more background to the performance of its operations by country. As a whole, all other countries, with exception to Singapore, faced challenges in 2017.

1. Vietnam

The country’s operations experienced lower profitability in its auto business was due to decline in vehicle sales volume. The drop was caused by market uncertainties ahead of removal of tariffs on imported cars under the ASEAN Free Trade Area which came into effect on 1st January 2018.

2. Singapore

Underlying profitability in the Lion City grew 14% year-on-year from a 14% increase in passenger car sales, and improved contribution from used cars and car parts sales.

3. Malaysia

Up north, Malaysia fell to a loss for the year due to a poor retail performance, and higher financing charges.

4. Indonesia

Indonesia also registered a weaker performance, caused by lower profits from its motor vehicles sales, which was offset by a stronger contribution from rental, motorcycle and its finance business.

 

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned.