Financial Statements and Related Announcement::First Quarter Results

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For Financial Period Ended 31/03/2017

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JCC_Q12017 28 April_Final.pdf Total size =186K

http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&B=Announcem...^[1]

28/4/2017

239 Alexandra Road

Singapore 159930

Tel (65) 6473 3122 Fax (65) 6475 7088

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www.jcclgroup.com^[3]

• Underlying earnings per share up 44%

• Stronger performance from Astra

• Lower contribution from Direct Motor Interests

"The outlook for the rest of the year is positive with Astra expected to benefit from the continued growth in the Indonesian economy, supported by higher commodity prices, although for its automotive activities there is a risk of increasing price competition. The Group's Direct Motor Interests and the Other Interests are likely to face increased competition."

Ben Keswick, Chairman 28th April 2017

The exchange rate of US$1=S$1.40 (31st December 2016: US$1=S$1.44) was used for translating assets and liabilities at the balance sheet date and US$1=S$1.41 (31st March 2016: US$1=S$1.40) was used for translating the results for the period.

The financial results for the three months ended 31st March 2017 and 31st March 2016 have been prepared in accordance with International Financial Reporting Standards. These results have not been audited or reviewed by the auditors.

Jardine Cycle & Carriage performed well in the first quarter of the year with Astra showing improvements in almost all of its businesses as they benefited from the general growth in the Indonesian economy and a recovery in commodity prices.

The Group's revenue in the first quarter was US$4.2 billion, 16% up on the previous year, with increases from most of Astra's businesses. The Group's underlying profit rose by 44% to US$202 million. Profit attributable to shareholders was US$210 million, an increase of 50% on the previous year, after accounting for a non-trading gain of US$8 million arising from the valuation at fair value of an investment held by an associate. Earnings per share rose 50% to US¢53.

Astra contributed US$185 million to the Group's underlying profit, 67% higher than the comparable period last year. The Group's Direct Motor Interests contributed an underlying profit of US$23 million, a decline of 36%, while no contribution was recognised from the Group's Other Interests.

The Group's net cash, excluding net borrowings within Astra's financial services subsidiaries, was US$263 million at the end of March compared to US$709 million at the end of 2016, mainly due to toll road and power plant investments made by Astra. Net debt within Astra's financial services subsidiaries was US$3.5 billion, similar to the end of 2016. JC&C's net cash was US$153 million, compared to US$154 million at the end of 2016.

The Board has not declared a dividend for the first quarter ended 31st March 2017 (31st March 2016: Nil)

Astra reported a net profit equivalent to US$381 million, under Indonesian accounting standards, 63% higher in its local currency with increases in all businesses, except for infrastructure and logistics and information technology. The group's automotive businesses achieved strong improved market shares for both cars and motorcycles. The overall wholesale market for cars grew while that for motorcycles declined. The financial services businesses improved, with a return to profit for Permata Bank, while higher commodity prices led to better trading performances from the heavy equipment and agribusiness operations.

Automotive

Net income from the group's automotive businesses increased by 45% to US$171 million, largely due to the sales momentum from successful new model introductions in 2016 which has continued into 2017.

The wholesale market for cars grew by 6% to 283,000 units. Astra's car sales were 27% higher at 161,000 units, resulting in an increase in market share from 48% to 57%. The group launched one new model and two revamped models during the first quarter of 2017.

The wholesale market for motorcycles decreased by 7% to 1.4 million units. While Astra Honda Motor's domestic sales fell 2% to 1.1 million units, its market share rose from 72% to 77%, supported by the launch of four new models and six revamped models during the period.

Net income of Astra Otoparts, the group's component business, increased 83% to US$11 million, supported by higher revenue from its OEM and aftermarket segments and a higher earnings contribution from its joint venture and associates.

Financial Services

Net income from the group's financial services business increased 75% to US$84 million, with improved contributions from most financial services businesses, including Permata Bank.

The group's consumer finance businesses saw a 17% increase in the amount financed, including amounts financed through joint bank financing without recourse, to US$1.4 billion. Car-focused Astra Sedaya Finance reported net income 11% higher at US$18 million, while Toyota Astra Financial Services recorded a 25% increase in net income at US$7 million, both benefiting from growth in the car market and Astra's increased market share. Motorcycle- focused Federal International Finance's net income was up 13% at US$33 million, benefiting from Honda's improved market share and loan product diversification.

The amount financed through the group's heavy equipment-focused finance operations increased by 28% to US$98 million. Net income at Surya Artha Nusantara Finance, which specialises in small and medium heavy equipment financing, was slightly lower at US$1 million.

Astra's 44.6%-held joint venture, Permata Bank, reported net income of US$34 million compared with a net loss of US$28 million in the same period in 2016. The bank's gross non- performing loan ratio declined from 8.8% at the end of 2016 to 6.4% at the end of March 2017, while its net non-performing loan ratio remained stable at 2.2%. The improved performance of Permata Bank was the result of good underlying income and the liquidation of non-performing loans as planned. In order to further strengthen its capital base, a US$220 million rights issue is expected to be completed in the first half of 2017, of which US$110 million had already been injected as a capital advance in December 2016 by its two major shareholders, Astra International and Standard Chartered Bank.

Asuransi Astra Buana, the group's general insurance company, reported net income 4% higher at US$16 million, primarily due to increased automotive underwriting income.

During the period, the group's life insurance joint venture, Astra Aviva Life, acquired close to 67,000 individual life customers and 145,000 participants for its corporate employee benefits programmes, bringing the respective totals to 267,000 and 637,000 at the end of the first quarter of 2017.

Heavy Equipment and Mining

The net income contribution to the group from its heavy equipment and mining business increased by 104% to US$68 million.

United Tractors, which is 59.5%-owned, reported net income 105% higher at US$113 million due to higher business volumes in construction machinery, mining contracting and mining operations, all of which benefited from improved coal prices.