Adira, BII Finance upbeat despite gloomy market
The Jakarta Post
Automotive financing companies PT Adira Dinamika Multi Finance (ADMF) and PT BII Finance Center are optimistic businesses will continue to grow in 2013, despite the planned fuel price increase and the estimated drop in motorbike and car sales.
The publicly listed Adira, part of Bank Danamon, hopes the company's total financing will rise by about 2 percent to Rp 33 trillion (US$3.38 billion) from the financing figures recorded last year.
Adira sales and distribution chief Hafid Hadeli said in Jakarta on Friday, the rise in the price of subsidized fuel would be unlikely to affect the company's business significantly. According to him, the planned increase of between Rp 1,000 and Rp 2,000 per liter would not affect car purchases.
Adira also expects the car segment to be the driving force behind the financing target as car sales are estimated to contribute to 47 percent to the new financing portfolio, up from the previous 40 percent. Motorcycle sales are projected to make up for the remaining 53 percent, down from 60 percent in 2012.
The company's first quarter financial report showed that the financing for car segment surged 3.2 percent to Rp 3.2 trillion, equal to 24,000 cars. On the other hand, the motorcycle segment fell 20.8 percent to Rp 3.8 trillion, representing the purchase of 373,000 motorcycle units.
In the first three months, Adira saw its revenues climb 21 percent to Rp 1.85 trillion, but net profit declined 7 percent to Rp 336 billion due to increasing costs.
To boost its car business in 2013, Adira plans to upgrade some of its branches. It has 300 branches; 30 branches for car financing, 80 for car and motorcycle and 190 for motorcycle only.
BII Finance, subsidiary of Bank Internasional Indonesia (BII), aims to book around a 20 percent rise in financing to reach Rp 6.6 trillion by year-end. As quoted by tempo.co, BII Finance president director Alexander said it set a double-digit target even though the Association of Indonesia Automotive Industries (Gaikindo) projected lower car sales this year.
Gaikindo estimates that national car sales will decline to 1.05 million this year from 1.2 million in 2012. Several factors have been attributed as the cause, including fuel subsidy cut and the central bank's new regulation on the increase in down payment for purchases of cars using bank loans.
In the first three months, BII Finance, which only provides car financing, recorded a 30.2 percent rise in its new financing to Rp 1.83 trillion. About 94 percent of the figure was channeled to finance the purchase of 10,190 new cars, while the remainder was for the purchase of 478 second-hand cars.
Its total revenues increased by more than half to Rp 194.01 billion and the company gained Rp 63.53 in profits before tax, up 55 percent from the same period in 2012. To fund business this year, BII Finance plans to issue bonds to generate a maximum of Rp 1.5 trillion. In a statement published on Thursday, the company said it would sell two series of debt papers, A and B, during a bonds issuance, scheduled to take place from June 11 to 13.
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