Overall Profits Healthy For Astra Group in H1

By webadmin on 05:31 pm Jul 27, 2012
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Francezka Nangoy & Ivan Dasa Saputra

Francezka Nangoy & Ivan Dasa Saputra

Astra International, the country’s largest automotive distributor, said its net income rose 13 percent in the first half of this year, as solid performance in its automotive business compensated for weak performance of its agriculture business.

Astra, which is the biggest listed company and one of Indonesia’s largest diversified conglomerates, reported net income increased to Rp 9.7 trillion ($1 billion) in the January-June period from Rp 8.6 trillion in the same six months last year.

Meanwhile, its sales rose 26 percent to Rp 96 trillion. Astra groups its businesses into six different divisions — automotive; finance; heavy equipment and mining; agri-business; infrastructure and logistics; and information technology.

Among other divisions, automotive still contributes to around 50 percent of the company’s revenue.

“Astra Group showed a good performance in the first half of 2012, especially in car sales, which benefited from rising demand in the domestic market,” Prijono Sugiarto, the president director of Astra International, said on Thursday.

He said he was optimistic that performance in the second half of this year would still be “satisfactory” despite the central bank and the Finance Ministry issuing a new policy that sets a higher down-payment for car and motorbike buyers.

As of June 15, consumers are required to make a minimum 25 percent to 30 percent down payment for car loans. At the same time, down payments for motorcycles were also raised to around 25 percent of the price tag.

Previously, Indonesian consumers could buy cars or motorcycles with an upfront 10 percent to 15 percent payment in cash of the total value of the vehicle.

In cars, Astra managed to post sales growth that outpaced the rise in the nation’s domestic sales. The group sold 301,636 units in the first half of 2012, a mark that represented a 32 percent rise from the same period in 2011.

That compares to the nation’s domestic car sales during the six month period, which rose 28 percent year-on-year to 535,263 units.

A similar trend also happened in motorcycles. Astra’s sales grew 0.1 percent to 2.1 million units, while national motorcycle sales fell 9 percent to 3.7 million units. Astra says it has enlarged its market share to 57 percent from 52 percent previously.

In finance, strong automotive growth has helped its major automotive financing arms — Federal International Finance, Astra Credit Companies and Toyota Astra Financial Services — post strong growth.

Indonesia’s central bank on July 12 maintained its key interest rate at a record low of 5.75 percent for the fifth month in a row, helping consumers in the country maintain their purchasing power and stimulate the economy.

Heavy equipment distributor United Tractors also posted satisfactory earnings with its net income rising 21.5 percent to Rp 3.09 trillion.

However, its agriculture business, Astra Agro Lestari, which is the nation’s biggest capitalized plantation company, posted a 25 percent decline in net income to Rp 958.61 billion.

Although Astra International posted a 13 percent rise in net income, Edwin Sebayang, head of research at brokerage MNC Securities, said he was disappointed with the result. He predicted that Astra International would generate Rp 12.6 trillion in net income in the first half of 2012. Edwin lowered his share price target for Astra International to Rp 8,000 per share from Rp 8,550 per share. The stock rose 1.6 percent to Rp 6,450 on Thursday.