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Astra International the main contributor to JC&C’s 10% revenue growth - 2018 Annual Report

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Jardine Cycle & Carriage Limited (JC&C)

Source: JC&C

A member of the Jardine Matheson Group, JC&C holds market-leading businesses. It has a strong automotive presence through its Direct Motor Interests segment, as well as a majority interest in Astra International, the largest independent automotive group in Southeast Asia.

FY 2018 Financial Highlights:

Source: JC&C FY 2018 Presentation slides

  • JC&C’s FY 2018 revenue improved 10% year-on-year to USD 19 billion, mainly due to its Astra International (Astra) business. Consequently, the company’s underlying profit attributable to shareholders in FY 2018 was 12% higher at USD 858 million.
  • However, profit attributable to shareholders for the year dropped 55% to USD 420 million, as a result of USD 438 million in net non-trading losses. The losses comprised mainly of fair value losses related to non-current investments.
  • Astra’s contribution to JC&C’s underlying profit rose by 15% year-on-year to USD 719 million. In addition, the underlying profit from the company’s Direct Motor Interests was 19% higher at USD 145 million.
  • Meanwhile, the underlying profit from JC&C’s Other Strategic business more than doubled in FY 2018 to USD 71 million (FY 2017: USD 34 million).

Performance Drivers:

Source: JC&C FY 2018 Presentation slides

Both the Astra business and Direct Motor Interests recorded an overall increase in underlying profits for FY 2018. But we will take a deeper look into the various segments in each business and analyze which of them performed better or worse for the year.

Performance Drivers (Positive Factors)


  • Astra – Heavy Equipment, Mining, Construction and Energy

Astra’s heavy equipment, mining, construction and energy division saw a 48% year-on-year growth in net income to USD 465 million, mainly due to improved performances in the construction machinery, mining contracting and mining operations of subsidiary United Tractors – on the back of higher coal prices compared with 2017.

  • Astra – Financial Services

Net income from Astra’s financial services division rose by 28% year-on-year to USD 337 million as a result of higher contributions from its consumer finance, banking and general insurance businesses.

  • Astra – Infrastructure and Logistics

Astra’s infrastructure and logistics division registered a net income of USD 14 million in

FY 2018, compared to the net loss of USD 17 million incurred in the previous year. This positive showing was chiefly due to better earnings from a major toll road in Indonesia and subsidiary Serasi Autoraya.

  • Astra – Information Technology

Net income from Astra’s information technology division increased by 5% year-on-year to SGD 15 million, primarily due to higher revenues from the document and IT solution businesses of subsidiary Astra Graphia.

  • Direct Motor Interests – Singapore

Despite a 7% decrease in passenger car sales (resulting from a decrease in the number of certificates of entitlement issued by the Singapore government), subsidiary Cycle & Carriage Singapore experienced an 8% growth in earnings to USD 62 million on the back of improved margins.

  • Direct Motor Interests – Malaysia

Subsidiary Cycle & Carriage Bintang achieved a profit of USD 2 million compared to a loss in the previous year, as the business benefited from operational improvements and the zero rate of Goods & Services Tax from June to August.

  • Direct Motor Interests – Indonesia

Subsidiary Tunas Ridean’s profits of USD 18 million was 17% higher than the previous year, as a result of better performances across all its segments (automotive, rental operations and consumer finance). In particular, motorcycle sales rose by 11% to 248,900 units.

  • Direct Motor Interests – Vietnam

Subsidiary Truong Hai Auto Corporation’s profit increased by 29% year-on-year to USD 73 million, on the back of higher unit sales and improved margins. This was a direct result of the elimination of related tariffs following the full implementation of the ASEAN Trade in Goods

Agreement in 2018.

  • Other Strategic Interests

The profit from JC&C’s Other Strategic business more than doubled in FY 2018 to USD 71 million, largely due to dividends from subsidiary Vinamilk, as well as improved earnings from Siam City Cement Public Company (SCCPC) and Refrigeration Electrical Engineering Corporation (REEC). SCCPC saw better domestic performance and lower expenses, while REE benefitted from higher contributions from its power and water investments.

Performance Drivers (Negative Factors)

  • Astra – Automotive

Despite higher automotive sales, net income from Astra’s automotive division was 4% lower than the previous year at USD 597 million due to lower operating margins.


  • Astra – Agribusiness

Net income from Astra’s agribusiness division dropped 27% year-on-year to USD 80 million, mainly due to subsidiary Astra Agro Lestari suffering a fall in crude palm oil prices.

  • Astra – Property

Astra’s property division saw a 28% year-on-year decline in net income to USD 11 million, on the back of lower development earnings recognized from its Anandamaya Residences property development project, as it encountered delays in during the final stages of construction.

  • Direct Motor Interests – Myanmar

Subsidiary Cycle & Carriage Myanmar’s net loss widened from USD 3 million in FY 2017 to USD 5 million in FY 2018, largely as a result of higher depreciation charges on new facilities in Yangon and higher stock provisions. Nevertheless, Cycle & Carriage Myanmar achieved higher unit sales during the year.

Source: JC&C Annual Report 2018