Jardine Cycle & Carriage: 2025 Half-Year Financial Results & Dividend Announcement

Jardine Cycle & Carriage Limited: 23% Net Profit Decline – Investment Analysis

Report Overview

This report analyzes the financial performance of Jardine Cycle & Carriage Limited (JC&C) for the half-year ended June 30, 2025. The analysis is based on the financial statements and dividend announcement released on July 30, 2025. [[1]] The report aims to provide an informed investment recommendation based on the company’s performance and future outlook.

Business Description

Jardine Cycle & Carriage (JC&C) is an investment holding company focused on the fast-growing economies of Indonesia and Vietnam. [[6]] Its portfolio includes market-leading businesses across various sectors:

Indonesia: Astra (automotive, financial services, heavy equipment, mining, agribusiness, infrastructure, IT, property) and Tunas Ridean (automotive dealerships). [[6]]
Vietnam: THACO (automotive, agriculture, real estate, logistics, infrastructure, retail), REE Corporation (power & utilities, property development, mechanical & electrical engineering), and Vinamilk (dairy producer). [[6]]
Regional Interests: Cycle & Carriage (automotive dealerships in Singapore and Malaysia) and a small stake in Toyota Motor Corporation. [[6]]

JC&C is 85%-owned by the Jardine Matheson Group and is listed on the Mainboard of the Singapore Exchange. [[6]]

Financial Statement Analysis

Income Statement

Revenue: Increased slightly by 1% to US\$10,802 million. [[1]]
Underlying Profit Attributable to Shareholders: Increased by 6% to US\$529 million. [[1]]
Profit Attributable to Shareholders: Decreased by 23% to US\$371 million. [[1]] This decrease is due to non-trading items, primarily unrealized fair value losses on non-current investments. [[2]]
Earnings per Share: Decreased by 23% to US¢94. [[1]]
Underlying Earnings per Share: Increased by 6% to US¢134. [[1]]

Balance Sheet

Net Asset Value per Share: Increased slightly to US\$21.1. [[2]]
Consolidated Net Cash Position: Improved to US\$26 million from a net debt of US\$235 million at the end of 2024, excluding Astra’s financial services subsidiaries. [[2]]
Astra’s Financial Services Subsidiaries Net Debt: Increased to US\$3.9 billion from US\$3.7 billion. [[2]]
JC&C Corporate Net Debt: Relatively unchanged at US\$810 million. [[2]]

Cash Flow Statement

Net Cash Flows from Operating Activities: US\$1,635.9 million (2024: US\$2,115.8 million). [[15]]
Net Cash Flows from Investing Activities: US\$(777.1) million (2024: US\$(686.2) million). [[15]]
Net Cash Flows from Financing Activities: US\$(556.3) million (2024: US\$(743.0) million). [[15]]

Key Highlights and Points for Investor Action

Dividend: An interim one-tier tax-exempt dividend of US¢28 per share has been declared, unchanged from 2024. [[2]]
Indonesia Performance: Contribution to underlying profit decreased by 9%, mainly due to weaker performances in new car sales, mining services, and coal mining. [[3]] Astra’s net profit was US\$974 million, excluding unrealized fair value losses from GoTo and Hermina investments. [[3]]
Vietnam Performance: Increased contribution to underlying profit by 17%, driven by THACO, REE, and Vinamilk. [[3]]
Regional Interests: Lower contribution due to the disposal of Siam City Cement. Cycle & Carriage’s contribution increased significantly. [[3]]
Astra’s Strategic Initiatives:
- Toyota invested US\$120 million for a 40% stake in Astra Digital Mobil (ADMO). [[2]]
- United Tractors acquired an additional 30.6% stake in Supreme Energy Sriwijaya (SES). [[2]]
- Astra signed an agreement to acquire an 83.7% stake in Mega Manunggal Property (MMP). [[2]]
Corporate Costs: A US\$33 million translation gain on foreign currency corporate loans was recorded. [[5]]
Strategic Review: JC&C is working with portfolio companies to review business strategy, with an update expected in the first half of 2026. [[2]]

Strengths and Risks

Strengths:
- Strong underlying profit growth.
- Improved cash position.
- Strategic initiatives in high-growth sectors.
- Positive performance in Vietnam.
Risks:
- Decline in reported profit due to non-trading items (fair value losses).
- Weakness in Indonesian businesses.
- Increased net debt within Astra’s financial services subsidiaries.
- Challenging macroeconomic environment.

Investment Recommendations

For Current Holders:

Hold. Despite the reported net profit decline due to non-trading items, the underlying profit growth and strategic initiatives suggest potential for future growth. Monitor the performance of Indonesian businesses and the progress of strategic initiatives. The recurring dividend is also a plus point for holding the stock.

For Potential Investors:

Neutral. The company’s underlying performance is positive, but the decline in reported profit and exposure to macroeconomic challenges in Indonesia present risks. Further analysis is recommended, focusing on the factors contributing to the fair value losses and the outlook for Indonesian businesses before initiating a position.

Disclaimer: This recommendation is based on the provided document and is for informational purposes only. Investors should conduct their own due diligence and consider their individual risk tolerance and investment objectives before making any investment decisions.