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Astra records lower profits on agribusiness fall
Diversified conglomerate PT Astra International saw its revenues in the first quarter of this year squeezed by a huge slump in its agribusinesses and automotive businesses, leaving the company with declining net profits
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Diversified conglomerate PT Astra International saw its revenues in the first quarter of this year squeezed by a huge slump in its agribusinesses and automotive businesses, leaving the company with declining net profits.
Astra registered a 9.3 percent slump in its net revenues to Rp 45.19 trillion (US$3.5 billion) in the first three-month period of this year from Rp 49.82 trillion during the same period last year, according to its unaudited financial report submitted to the Indonesia Stock Exchange (IDX) on Monday.
The company's net profits plunged by 15.6 percent to Rp 3.99 trillion in the January to March period this year from Rp 4.73 trillion in the same period last year.
'Astra's declining business performance was mainly due to plunging contributions from the automotive and agribusiness divisions,' Astra president director Prijono Sugiarto said in a statement.
Net profits from the automotive division dropped by 21 percent year-on-year (yoy) to Rp 1.62 trillion from Rp 2.05 trillion, while net profits from agribusiness plunged by 80 percent on a yearly basis to Rp 124 billion.
Prijono said that an economic downturn and a discount war among auto distributors caused by oversupply in the first quarter of this year had negatively affected his company's automotive division.
Astra's car sales dropped by 21 percent yoy to 137,000 units, making its market share fall to 49 percent from 53 percent in the first quarter of 2014.
In line with declining national demand for two-wheelers, Astra's motorcycle sales also dropped by 13 percent to 1.1 million units in the first quarter with its market share rising to 68 percent.
The firm's agribusiness division, PT Astra Agro Lestari, saw an 80 percent decline in net profits from lower crude palm oil (CPO) prices and declining sales.
Astra Agro's CPO sales dropped by 18 percent to 258,000 tons from January to March this year with the average selling price declining by 12 percent to Rp 7,839 per kilogram.
Astra's infrastructure and logistics division also contributed to the group's declining net profits. The division saw a 59 percent slump in net profits to Rp 36 billion, mainly because of initial losses from the operation of the 14.41 kilometer Bandar-Jombang toll road in East Java, part of the Kertosono-Mojokerto toll road.
The group's other business divisions, meanwhile, booked better profitability: most notably information technology and financial services, which were up 42 and 21 percent, respectively.
PT Astra Graphia, which is the group's information technology division, recorded a 42 percent increase in net profits to Rp 37 billion in the first three months this year.
Astra's financial services division ' banking, automotive financing and insurance ' saw its net profits increase by 21 percent to Rp 1.2 trillion.
The company's heavy equipment division saw its net profits slightly rise by 3 percent to Rp 983 billion in the first quarter of this year from Rp 959 billion during the same period last year.
Reza Priyambada, an analyst with NongHyup Korindo Securities Indonesia, said Astra's financial performance would likely rebound after the second quarter of this year when the government would possibly carry out monetary easing and demand for CPO would increase ahead of the Islamic fasting month of Ramadan, which will fall in mid-June this year.
