JC&C Full Year Financial Results 2011

Jardine Cycle & Carriage Limited

2011 Financial Statements and Dividend Announcement

The following announcement was issued today by the Company's 71%-owned subsidiary, Jardine Cycle & Carriage Limited.

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29th February 2012

JARDINE CYCLE & CARRIAGE LIMITED

2011 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

·; Underlying earnings per share up 25%

·; Excellent results from Astra

·; Challenges in Singapore and Vietnam

·; Full year dividend up 25%

"The outlook for Jardine Cycle & Carriage in 2012 is encouraging as Astra remains particularly well-placed to benefit further from the strength of Indonesia's growing economy. The Group's Singapore and Vietnam businesses will, however, continue to face difficult operating environments, and the deteriorating global financial conditions may have a broader impact on the Group's performance."

Anthony Nightingale, Chairman

29th February 2012

The exchange rate of US$1=S$1.30 (2010: US$1=S$1.29) was used for translating assets and liabilities at the balance sheet date and US$1=S$1.25 (2010: US$1=S$1.36) was used for translating the results for the year.

The financial results for the year ended 31st December 2011 have been prepared in accordance with the International Financial Reporting Standards. These results have not been audited or reviewed by the auditors.

(1) The basis for calculating underlying earnings is set out in Note 5 of this report.

(2) The S$ equivalent is an estimate as the actual amount of the final dividend will be determined on Books Closure Date referred to in Note 14.

CHAIRMAN'S STATEMENT

Overview

Jardine Cycle & Carriage produced a record result in 2011, underpinned by an excellent performance by Astra as its businesses benefited from the continuing growth in the Indonesian economy.

Performance

The Group's revenue for the year increased by 28% to US$20.1 billion. Underlying profit grew by 25% to US$1,019 million. Profit attributable to shareholders of US$1,030 million included a non-trading gain of US$11 million due to a fair value gain on revaluation of Astra's oil palm plantations.

Astra achieved improved performances in all its major businesses and contributed US$1,011 million to the Group's underlying profit, an increase of 27%. The contribution from the Group's other motor interests grew 10% to US$62 million.

The Board is recommending a final one-tier tax exempt dividend of US¢105 per share (2010: US¢82 per share). This together with the interim dividend will produce a total dividend of US¢123 per share (2010: US¢98 per share), an increase of 25%.

Business Activity

Astra

The Indonesian economy grew by 6.5% in 2011, supported by growth in domestic demand, strong commodity prices and the availability of consumer and commercial finance at attractive interest rates.  Excellent earnings growth from Astra's automotive, financial services, heavy equipment and mining activities enabled the company to achieve a new record profit for the year.

Astra's automotive and financial services businesses produced a strong contribution to group profit as they benefited from robust consumer demand. Automotive supply constraints, as a consequence of natural disasters in Japan and Thailand during the year, only had a mild impact on Astra's automotive results. Astra Otoparts saw a decline in earnings due to higher material costs and increased expenses incurred in establishing its brands.

Astra's heavy equipment subsidiary, United Tractors, continued to seek coal mining investment opportunities. United Tractors and its subsidiaries own interests in eight coal mines, having acquired interests in five additional mining concessions in 2011, with combined reserves estimated at 250 to 370 million tonnes. In May, the company completed a US$700 million rights issue to finance the expansion of its coal mining and coal contracting businesses as well as coal-related infrastructure opportunities.

The performance of Astra Agro Lestari benefited from the high crude palm oil prices achieved, as well as higher palm oil production. The company has continued to make good progress in improving its yield.

Elsewhere, there were increased contributions from Astra's infrastructure and logistics and information technology businesses. During the year, the group acquired a 95% stake in the greenfield 40.5km Kertosono-Mojokerto toll road near Surabaya at a cost of US$86 million. The overall cost of this toll road project is estimated at some US$400 million, including land clearance and construction. Astra Graphia, the group's information technology business entered into a joint venture with Monitise Asia Pacific to offer mobile banking, payments, commerce software and solutions in Indonesia. The joint venture is expected to commence operations this year.

Other motor interests

The Group's other motor interests produced a higher contribution from the Singapore motor operations and Tunas Ridean in Indonesia. In Singapore, the motor operations did well, despite the reduced size of the market due to the lower government quota, as the Mercedes-Benz brand proved resilient although the non-Mercedes-Benz brands also showed some improvement. Tunas Ridean had a good year, benefiting from the strong consumer demand in Indonesia and the availability of financing at affordable interest rates. In Malaysia, Cycle & Carriage Bintang's contribution was flat as it continued to face competition. In Vietnam, Truong Hai Auto Corporation's lower contribution, despite unit sales rising 26%, was due to the devaluation of the Vietnam dong, and higher finance and operating costs.

People

On 31st March 2012, I will retire as Chairman of the Board, but will remain as a non-executive director. I will be succeeded as Chairman by Ben Keswick. He will step down as Group Managing Director on 31st March 2012 and will be succeeded by Alex Newbigging.

On behalf of the Directors, I wish to thank our 182,000 staff employed across the Group. These record results would not have been possible without their dedication and diligence. I would also like to thank our customers, shareholders and business partners for their continued support.

Outlook

The outlook for Jardine Cycle & Carriage in 2012 is encouraging as Astra remains particularly well-placed to benefit further from the strength of Indonesia's growing economy. The Group's Singapore and Vietnam businesses will, however, continue to face difficult operating environments, and the deteriorating global financial conditions may have a broader impact on the Group's performance.

Anthony Nightingale

Chairman

29th February 2012

Group Managing Director's Review

Overview

The Group achieved another record profit in 2011. Astra produced a fine set of results with excellent performances from all its major businesses, while some improvement was also seen in the Group's other motor interests.

Performance

The Group's underlying profit increased by 25% to US$1,019 million in 2011. Profit attributable to shareholders was US$1,030 million after accounting for a non-trading gain of US$11 million, compared to US$944 million in the previous year which included a non-trading gain of US$132 million. The lower non-trading gain in 2011 was due to a much smaller increase in the fair value of Astra's oil palm plantations.

The excellent profit growth from all of Astra's major businesses, which was further enhanced by the strong rupiah, produced a contribution of US$1,011 million to the Group's underlying profit, an increase of 27%. The underlying profit contribution from the Group's other directly-held motor interests grew 10% to US$62 million.

The Group had consolidated net debt of US$108 million at the end of 2011, excluding borrowings within Astra's financial services subsidiaries, compared to the net debt of US$353 million at the end of 2010. The improvement was due to the strong operating cash flows and the net proceeds from the United Tractors rights issue. The net debt within Astra's financial services subsidiaries was US$3.4 billion at year end, US$1.1 billion higher than at the end of 2010, following an increase in the volume financed. The parent company had net cash of US$28 million.

Group Review

Astra

The Indonesian economy grew by 6.5% in 2011, supported by growth in domestic demand, strong commodity prices and the availability of consumer and commercial finance at attractive interest rates.  Under Indonesian accounting standards, Astra reported a net profit equivalent to US$2,027 million for 2011, an increase of 24% over the previous year in its reporting currency.

Automotive

The wholesale market for motor vehicles grew by 17% to 894,000 units. Astra's motor vehicle sales rose by 13% to 483,000 units, representing a market share of 54% compared to 56% in 2010. The growth in Astra's motor vehicle sales in 2011 was supported by a 40% expansion in manufacturing capacity at 32%-held Astra Daihatsu Motor to 330,000 units per annum and the launch of twelve new models.

The wholesale market for motorcycles grew by 9% to 8 million units. Astra Honda Motor's sales improved by 25% to 4.3 million units, with its market share increasing from 46% to 53%, led by strong sales growth in the scooter segment. Sales during the year were well supported by a 23% capacity expansion at 50%-held Astra Honda Motor to 4.3 million units per annum, and the launch of six new models together with eight revamped models.

Astra Otoparts, the 96%-owned component manufacturing business, reported a net income of US$115 million, of which 69% was contributed by associates and joint ventures. Net income declined by 12% compared to 2010 due to higher material costs, which could not be fully passed on to customers, and higher marketing and branding costs as the company sought to establish further its GS-Astra and Federal brands.

Financial Services

The increased contribution from Astra's finance operations reflected loan book growth in line with industry growth, a reduction in offshore funding costs and a stable customer credit experience. The aggregated amount financed through Astra's automotive-focused consumer finance operations, Federal International Finance, Astra Credit Companies and Toyota Astra Financial Services, grew by 13% to US$5.6 billion, including balances financed through joint bank financing without recourse. The aggregated amount financed through Astra's heavy equipment-focused finance operations, Surya Artha Nusantara Finance and Komatsu Astra Finance, grew by 51% to US$829 million. The heavy equipment-focused finance operations do not utilise joint bank financing facilities.

Higher retail and commercial premiums enabled group insurance company, Asuransi Astra Buana, to generate an increase in earnings.

Astra´s 45%-held joint venture, Bank Permata, reported net income of US$132 million, an increase of 15%, driven by increases in net interest income and fee-based income, with loan book growth of 31%.

Heavy Equipment and Mining

United Tractors, which is 60%-owned, reported net income up 52% to US$672 million. Strong results were seen in its Komatsu heavy equipment business, which sold almost 8,500 units, an increase of 57%. The contract coal mining operations of subsidiary, Pamapersada Nusantara, achieved an increase in contract coal production of 11% to 87 million tonnes and an increase in contract overburden removal of 22% to 796 million bcm. United Tractors sold 4.5 million tonnes of coal produced from its own mines.

Agribusiness

Astra Agro Lestari, which is 80%-held, reported net income for the year up 19% to US$274 million, as average crude palm oil prices achieved were 8% higher and palm oil production was up 14% at 1.3 million tonnes.

Infrastructure and Logistics

Net income from infrastructure and logistics grew by 68% to US$69 million, primarily due to the reversal of a prior year tax provision.

PAM Lyonnaise Jaya, which operates the western Jakarta water utility system, increased its sales volume in 2011 by 4% to 153 million cubic metres. The 72.5 km Tangerang - Merak toll road operated by 79%-owned Marga Mandalasakti, reported an 11% increase in traffic volume to 33 million vehicles on higher average tariffs. Serasi Autoraya´s improved profit was supported by a 26% increase in vehicles under contract at its rent-a-car business.

Information Technology

The group's 77%-owned Astra Graphia which is active in the area of information technology solutions, and is the sole distributor of Fuji Xerox equipment in Indonesia, reported a 18% increase in net income.

Other Motor Interests

Underlying profit of the Group's other motor interests at US$62 million was 10% up on the previous year.

Singapore

Profit from the Group's wholly-owned Singapore motor operations increased by 16% to US$33 million despite the difficult trading conditions, as the fall in unit sales was mitigated by improved margins and a stronger Singapore dollar. The passenger car market fell by 33% to 28,300 units due to the sharp reduction in the government quota for new vehicles, which drove up the prices of vehicle certificates of entitlement. The Group sold 5,200 units of passenger cars, 38% lower than the previous year and its market share fell from 20% to 18%.

Malaysia

In Malaysia, 59%-owned Cycle & Carriage Bintang contributed a profit of US$5 million, the same as the previous year, as higher unit sales were offset by lower margins. Sales of Mercedes-Benz passenger cars grew by 19%. This included sales by newly acquired subsidiary, Lowe Motors, the authorised dealer of Mercedes-Benz vehicles in Penang, Malaysia, which has integrated well into the group.

Indonesia

In Indonesia, 44%-owned Tunas Ridean did well to increase its contribution by 16% to US$16 million with an improvement in automotive profit partly offset by a lower contribution from its consumer finance business. Motor vehicle sales grew by 20% to 38,300 units and motorcycle sales rose by 32% to 198,100 units. New lending by its consumer finance associate, Mandiri Tunas Finance, increased by 57%, but its contribution was lower due to higher losses and provisions on its loan portfolio.

Vietnam

In Vietnam, 32%-owned Truong Hai Auto Corporation ("Thaco") contributed a profit of US$8 million, 12% down on the previous year. Despite a 26% increase in unit sales, the results suffered from slightly lower margins, higher finance and operating costs and the devaluation of the Vietnam dong. Under the challenging economic conditions, Thaco did well to strengthen its market share, made progress with the addition of new franchises, further established its production facilities and expanded its distribution network.

Outlook

While the outlook for this year is positive, the possible impact of the deteriorating global economy on the Group's operations remains uncertain. Nevertheless, the Group's healthy balance sheet and strong underlying businesses enable it to face the challenges with confidence.

Ben Keswick

Group Managing Director

29th February 2012

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1 Basis of preparation

The financial statements are consistent with those set out in the 2010 audited accounts which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). There have been no changes to the accounting policies described in the 2010 audited accounts except for the adoption of the following standards, amendments and interpretations:

The adoption of these standards, amendments and interpretations did not have a material impact on the results of the Group.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. Estimates and judgments used in preparing the financial statements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The exchange rates used for translating assets and liabilities at the balance sheet date are US$1=S$1.2996 (2010: US$1=S$1.2883), US$1=RM3.1744 (2010: US$1=RM3.0705), US$1=IDR9,068 (2010: US$1=IDR8,991) and US$1=VND21,033 (2010: US$1=VND19,499).

The exchange rates used for translating the results for the year are US$1=S$1.2546 (2010: US$1 =S$1.3608), US$1=RM3.0554 (2010: US$1=RM3.2159), US$1=IDR8,773 (2010: US$1=IDR9,078) and US$1=VND20,689 (2010: US$1=VND19,183).

2 Net operating costs and operating profit

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(1) Changes due mainly to fair value gain of US$37.5 million on plantations in 2011 (2010: fair value gain of US$421.5 million)

(2) Increase due mainly to higher financing activities

3 Revenue and Profit after tax