B

ank Rakyat Indonesia (BRI) and PT Astra International became the first of 10 blue chip companies to announce their first-quarter financial reports on Wednesday, with the first enjoying double-digit growth, while the latter suffered a decline in profits.

State-owned lender BRI, the sixth-largest company by market capitalization on the Indonesia Stock Exchange (IDX), booked Rp 5.01 trillion (US$515 million) in net profits in the first quarter of the year, increasing by 18.76 percent compared to Rp 4.22 trillion in the same period last year.

BRI finance director Achmad Baiquni highlighted the drivers behind the bank's profit growth, including a 24.5 percent surge in fee-based income to Rp 1.04 trillion ' which was supported mostly by the lender's ATM fees ' a 17.8 percent rise in net interest income to Rp 9.7 trillion ' which was backed by the 27.6 percent growth in lending to Rp 361.26 trillion, and lower costs of funds.

Despite the positive trend, BRI's net interest margin dropped slightly to 8.19 percent as of the end of March compared to 8.37 percent year-on-year. 'There is increasing competition not only in micro lending ' which has a high interest margin attracting new players ' but across all sectors. Therefore, there must be an adjustment on the side of our interest rates,' Baiquni said.

Meanwhile, diversified conglomerate Astra, the second-largest firm by market capitalization on the bourse, pocketed Rp 4.3 trillion in net profits in the first quarter of the year, a 7 percent decline from Rp 4.6 trillion year-on-year, as two out of its six business segments reported drops in net profits.

Astra's total revenues only inched up 1 percent to Rp 46.68 trillion during the January-to-March period of this year from Rp 46.35 trillion in the same period last year.

Astra's automotive division, the company's core business, saw a 10 percent drop in net profits to Rp 2.2 trillion in the first quarter of the year. The company lost some ground in the country's car market, with sales only rising by 7% to 155,000 units, in a market which saw 18 percent growth of sales to 296,000 units.

The motorcycle segment, which saw a 14 percent rise in sales to 1.2 million units in the first quarter, could not compensate for the drop in the car market.

Astra's heavy equipment and mining unit, run by 59.5 percent-owned PT United Tractors (UNTR), performed worst, with net profits falling 26 percent to Rp 1.13 trillion in the first quarter from Rp 1.53 trillion year-on-year due to declining sales of heavy equipment amid a weakening mining sector.

The plantation business also declined as Astra's 79.7 percent-owned subsidiary PT Astra Agro Lestari (AALI) booked Rp 356 billion in net profits in the first three months of the year, declining by 6 percent year on year. Net profits from infrastructure and logistics also dropped 19 percent. Only the financial services and information technology segments reported growth in net profits, by 23 percent and 22 percent respectively.