Blame slow sales, forex woes.
Jardine Cycle & Carriage reported a 16% drop in net profit to US$688m in 2015, as its key subsidiary Astra booked slower sales and faced forex headwinds.
Astra, Southeast Asia's largest independent automotive group, a saw reduced profit contributions from all its major business segments in the face of challenging trading conditions in its key market of Indonesia. Astra’s contribution was further impacted on translation of its rupiah profit into US dollars.
Astra’s contribution of US$477 million to the Group’s underlying profit was 34% down, as a 25% decrease in its rupiah result was translated into a 33% decline in US dollars as the exchange rate was on average 12% weaker than in 2014.
The decline was partly offset by strong results from Jardine C&C’s direct motor business and contributions from new businesses within the Group’s Other Interests. The group’s direct motor interests rose 71% to US$141 million, reflecting a number of good performances, particularly Truong Hai Auto Corporation in Vietnam. There was also a US$30 million contribution from Other Interests
“The Group remains cautious about the outlook for 2016 given the uncertain external macro-economic environment in the region, although Astra’s strong cash generation and sound balance sheet are enabling it to invest for the future and to benefit from any improvement in trading conditions. The Group’s Direct Motor Interests will face continuing pressure on margins, while earnings from Other Interests will include a full-year’s contribution from its investment in Siam City Cement,” said Ben Keswick, Chairman of Jardine C&C.
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