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stra International reported a plunge in its net profit during the first half of the year as the diversified conglomerate firm grappled to ease the impact of the country'€™s economic slowdown.

The company, coded ASII on the Indonesia Stock Exchange (IDX), booked Rp 92.5 trillion (US$6.89 billion) in net revenue from January to June this year, a year-on-year (yoy) decline of 9.7 percent from its Rp 101.53 trillion in revenue in the same period last year.

Its first half net profit was squeezed by a further 18 percent, to Rp 8.05 trillion, down from Rp 9.82 trillion last year.

The company attributed the weakened performance to reduced sales in automotive, agribusiness and heavy equipment sales.

'€œAstra'€™s earnings in the first half were lower in the face of reduced domestic consumption, competition in the car sector and lower commodity prices in Indonesia,'€ Astra president director Prijono Sugiarto said.

The company expected a bleak outlook for its business until the year end. Prijono cited that the timing of a recovery was '€œuncertain'€.

Agribusiness was the worst performer in the first half among Astra'€™s business units, which comprise five other segments also, namely automotive, financial services, heavy equipment and mining, infrastructure-logistics and information technology.

The contribution made by agribusiness to the parent firm plunged by 68 percent yoy, to only Rp 345 billion from Rp 1.09 trillion.

Meanwhile the automotive business line, which usually contributes the most to the diversified conglomerate, reported a 15 percent yoy drop in first half net profit, down to Rp 3.42 trillion.

The drop was driven by a 21 percent plunge in car sales and a 19 percent drop in motorcycle sales over the first semester of the year. Despite the declines, Astra remained market leader in each automotive sector.

The national car market fell by 18 percent during the period with total sales reached 525,000 units. Astra accounted a 50 percent share of that, 2 percentage points lower than its last year'€™s first half share.

Meanwhile, national motorcycle sales, of which Astra Honda Motors has a 67 percent market share of, dropped by 24 percent to 3.2 million units in the first half.

Aside from the slow economy itself, Astra said reasons for weakened demand included a lack of meaningful new product launches.

'€œIn addition, discounting in the car market caused by a manufacturing overcapacity continued to have a negative impact on earnings,'€ Astra said in its financial performance notes.

The only positive performance from Astra was the heavy equipment and mining sector. However, the company noted that their profit there was partly because of the weakening rupiah exchange rate.

Heavy equipment and mining business contributed Rp 2 trillion to Astra'€™s net profit, an increase of 3 percent on the first half of last year.

Jakarta-listed United Tractors, Astra'€™s subsidiary running heavy equipment and mining business, actually saw a 9 percent decline in net revenue during the first half, however, the exchange rate allowed it to profit as its income is mostly in US dollars. United Tractors saw its net profit rise by 3.6 percent yoy in the first half, to Rp 3.4 trillion up from Rp3.2 trillion.

Shares in ASII closed at Rp 6,575 a piece on Thursday, up 2.33 percent for the day.