F

uel distributor PT AKR Corporindo saw its net profits in the first half growing significantly amid a gloomy economy and dwindling oil prices, thanks to the company'€™s cost saving measures and a boost in sales.

AKR Corporindo managed to consistently book a higher bottom line along the year, with the company'€™s first half results showing a 61 percent increase on an annual basis from Rp 375.96 billion (US$27.94 million) last year to around Rp 605.24 billion this year, according to its latest financial statement.

The higher bottom line was recorded amid slumping oil prices, which led the company to book a 8.79 percent annual decline in revenues and sales to Rp 10.72 trillion during the first six months of 2014.

'€œA 40 percent decline in oil prices year-on-year resulted in lower selling prices for petroleum distribution. AKR could offset this with a growth in petroleum volumes and maintaining or improving margins,'€ AKR president director Haryanto Adikoesoemo said in a written statement.

'€œBusiness outlook remains challenging, but we anticipate a better second half with increased spending and a growth in demand. The government'€™s infrastructure projects will drive up demand for petroleum, basic chemicals and industrial estates.'€

The company'€™s corporate secretary, Suresh Vembu, said that AKR boosted its volume by 20 percent to help offset sales that slipped along with plunging oil prices.

AKR'€™s petroleum revenues had declined by around 15 percent to Rp 7.56 trillion, from Rp 8.89 trillion in the same period last year, because of the lower selling prices.

'€œWe continue to work on cost control and efficiency to boost margins,'€ he said when contacted by The Jakarta Post.

The company managed to trim its costs by around 13.64 percent year-on-year to Rp 9.12 trillion in the period between January and June and this was due to lower import costs, he added.

The company'€™s declining fuel sales were further compensated by an around 11 percent increase in chemical sales to Rp 1.77 trillion during the reported period, from Rp 1.59 trillion last year.

It has also started to cash in revenues from selling plots of land in its industrial property compound, the Java Integrated Industrial Port Estate (JIIPE) in Gresik, East Java. It recorded sales of industrial estate land worth Rp 128 billion during the first six months.

The company has so far surpassed its target to see annual net profits grow by 20 percent. The company previously said it plans to see its fuel distribution go up by around 15 percent on an annual basis, in addition to the company'€™s efficiency strategy, to mitigate low oil prices that might pinch the publicly listed firm'€™s top line. The company sold 1.5 million kiloliters of non-subsidized fuel last year.

Isnaputra Iskandar from Maybank Kim Eng wrote in a research paper that he recommended investors to buy the company'€™s stocks, given its strong earnings and potential industrial-land sales.

He projected that AKR would manage to book at least a 43 percent increase in its net profits by the end of the year to Rp 1.13 trillion, up from the Rp 788.6 billion the company recorded in 2014.

Shares of AKR Corporindo '€” which is in most liquid big caps list LQ45 '€” saw its shares go up by more than 46 percent so far this year to hover around Rp 6,000 per share, in contrast with the price benchmark Jakarta Composite Index (JCI) that has been slipping by nearly 10 percent since January.