MOTOR distribution company Jardine Cycle & Carriage (JC&C) posted sterling results for the first nine months but said it is beginning to feel the impact of the financial crisis.
Chairman Anthony Nightingale said full-year performance is expected to be "satisfactory".
"Falling commodity prices, the reaction of consumers to the general economic slowdown and a weakening rupiah will, however, have an impact on Astra's contribution to the group," he added.
Indonesia's Astra International remains JC&C's biggest profit contributor. Strong motor sales in Indonesia and relatively high palm oil prices helped lift revenue in the third quarter by 36 per cent to US$3.27 billion (S$4.9 billion) while net profits were up by 36 per cent, too, to US$153.5 million.
Turnover for the nine months to Sept 30 was up 37 per cent to US$8.99 billion with earnings rising 57 per cent to US$418.7 million.
JC&C chief executive (motors) Cheah Kim Teck said: "Indonesia has proven to be more resilient than most in the current crisis. Perhaps it has benefited from robust commodity prices."
Palm oil prices, however, have been nose-diving in recent months. From a high of about US$1,000 per tonne at the beginning of the year, crude palm oil rates are now just about half of that.
But on average, prices in the first three quarters were firmer than in 2007. Astra's palm output had also been higher.
That helped earnings per share for the nine months to rise to 119.15 US cents, from 77.48 previously. Net asset value per share at Sept 30 was US$7.01, versus US$6.18 previously.
Cash and equivalents stood at US$1.014 billion, from US$660.2 million.
The group's consolidated net cash, excluding borrowings within Astra's financial services operations, was US$192 million at Sept 30, versus a net debt of US$235 million at the end of 2007.
This was largely because of strong cashflows, a substantial dividend from an associate and proceeds from United Tractors' rights issue, which had been used in part to repay loans taken to buy a majority interest in a coal-mining concession.
Besides Astra, the group's other interests fared better over the nine months as well. In Singapore, sales continued to be driven by the new Mercedes-Benz C-class and the facelifted E-class.
In Malaysia, the group has dropped other franchises to focus on its Mercedes dealership.
A smaller supply of COEs from October is expected to affect vehicle sales in Singapore. And so is the generally weaker consumer sentiment arising from the economic slowdown.
Mr Cheah said one positive aspect of the crisis has been soft COE premiums, which he said has helped offset cost implications of a rising Japanese yen.
Tunas Ridean, its Indonesia dealership, is selling a 51-per cent stake in its fully-owned consumer finance arm to Bank Mandiri for about US$27 million. The sale is expected to be sewn up by the end of the year.
But because Astra accounts for the lion's share of profits, observers expect JC&C to post substantially weaker results in 2009.
The group has not declared a dividend for the third quarter.
This article was first published in The Straits Times on Nov 8, 2008.
