Jakarta. Astra International, a diversified conglomerate, posted an 18 percent decline in profit in the first half of this year, following weaker earnings from its automotive and commodity-related business, the company said in a statement on Thursday.

Astra, Indonesia’s largest car distributor, posted Rp 8.05 trillion ($597 million) in net income in the January-to-June period compared to Rp 9.82 trillion in the same period last year.

“Astra’s net income in the first semester declined following the weaker consumption, competition in the automotive sector and lower commodity prices in Indonesia. Amid the uncertainty of economic recovery, our business is prepared to take on opportunity when the recovery takes place and we remain solid as we are supported by strong financial balance sheet,”  Prijono Sugiarto, Astra International’s president director, said in the statement.

The company’s net sales also fell to Rp 92.5 trillion, down nearly 9 percent, in the first six months of this year from Rp 101.53 trillion it posted last year.

Astra’s business activities are comprised of six lines: automotive, financial service, heavy equipment and mining, agriculture, infrastructure, logistics and information technology.

All lines suffered a decline in profit in the January to June period except for its heavy equipment and mining sector, which rose to Rp 2.05 trillion, up 3 percent, from Rp 1.98 trillion it posted a year before.

Astra’s automotive business, the biggest contributor in the company, fell 14.6 percent to Rp 3.42 trillion in the first semester of this year, “economic slowdown caused the weak demand along with fewer new products launched. Moreover, discount competitions in the automotive markets due to over capacity also produced a negative impact to the profits in the [automotive] segment,” the company said in the statement.

Automotive components business also contributed to the low earnings following rupiah depreciation against the US dollar. Astra’s car sales declined 21 percent to 263,000 units. That compared to the national car sales, which dropped 18 percent to 525,000 units.

Meanwhile, motorcycle sales also fell 24 percent nationally to 3.2 million.

Astra Honda Motor, a sole distributor of Honda motorcycle in Indonesia, partly owned by Astra, reported a 19 percent decline in motorcycle sales to 2.1 million units.

Astra’s agribusiness line suffered the worst decline in profit. Net income from the sector slipped to Rp 354 billion, or down 67.6 percent, from Rp 1.09 trillion in the same period a year earlier.

Palm oil plantation company Astra Agro Lestari, of which Astra owns 79.7 percent stakes, booked Rp 444 billion in profit or down 68 percent from the same period a year before.

Despite posting a weaker earning, Astra’s stock rose 2.33 percent to be sold at Rp 6,575 on Thursday closing at the Indonesia Stock Exchange (IDX).

GlobeAsia

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Jakarta. State-owned utility PLN reported a loss of Rp 10.5 trillion ($787 million) in the first half of 2015, citing falling revenue and weak rupiah.

The earnings, reported on Wednesday, come in stark contrast to the Rp 14.5 trillion in profit the company posted in the same period last year.

The electricity company’s total revenue fell by 9.8 percent to Rp 132.5 trillion in the January to June period from the same period last year.

Contributing to the drop in the revenue was a 52.5 percent cut in the government’s electricity subsidy to Rp 27.4 trillion.

PLN  also posted an 18.1 percent increase in sale of electricity to Rp 101.3 trillion, while connection fees also rose 14.4 percent to Rp 3.2 trillion and subscriber numbers increased by 6.82 percent to 59.5 million.

“The increase in the number of customers bolstered the national electrification ratio to 84 percent by June 2015 from 80.1 percent by June last year,” the company said in a statement.

PLN posted a decline in total operating expenses to Rp 107.8 trillion in the first half, from Rp 118.2 trillion in the same period a year earlier.

The company also suffered a Rp 16.9 trillion loss from foreign exchange rates, compared to its Rp 4.4 trillion foreign exchange gain the year before.

PLN had signed in April a US dollar hedging facility agreement worth $950 million with three state lenders – Bank Mandiri, BNI and BRI – to shield the company against foreign exchange volatility. The rupiah has depreciated by more than 8 percent against the US dollar since the start of the year.

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Jakarta. State-owned utility PLN reported a loss of Rp 10.5 trillion ($787 million) in the first half of 2015, citing falling revenue and weak rupiah.

The earnings, reported on Wednesday, come in stark contrast to the Rp 14.5 trillion in profit the company posted in the same period last year.

The electricity company’s total revenue fell by 9.8 percent to Rp 132.5 trillion in the January to June period from the same period last year.

Contributing to the drop in the revenue was a 52.5 percent cut in the government’s electricity subsidy to Rp 27.4 trillion.

PLN  also posted an 18.1 percent increase in sale of electricity to Rp 101.3 trillion, while connection fees also rose 14.4 percent to Rp 3.2 trillion and subscriber numbers increased by 6.82 percent to 59.5 million.

“The increase in the number of customers bolstered the national electrification ratio to 84 percent by June 2015 from 80.1 percent by June last year,” the company said in a statement.

PLN posted a decline in total operating expenses to Rp 107.8 trillion in the first half, from Rp 118.2 trillion in the same period a year earlier.

The company also suffered a Rp 16.9 trillion loss from foreign exchange rates, compared to its Rp 4.4 trillion foreign exchange gain the year before.

PLN had signed in April a US dollar hedging facility agreement worth $950 million with three state lenders – Bank Mandiri, BNI and BRI – to shield the company against foreign exchange volatility. The rupiah has depreciated by more than 8 percent against the US dollar since the start of the year.

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Jakarta. Thailand-based venture capitalist Ardent Capital announced a $2.5 million investment in Bizzy.co.id, an Indonesian e-commerce marketplace for business supplies, inventory and services, to tap the huge business-to-business (B2B) potential in Southeast Asia’s largest economy.

Ardent said in a statement sent to Globe Asia on Monday that Bizzy provides solutions for many companies in procuring supplies and services for their business needs.

Adrian Vanzyl, chief executive of Ardent Capital, said that B2B e-commerce had gained much attention globally.

The penetration of B2B e-commerce had reached 91 percent in South Korea, while in Indonesia this type of e-commerce is still developing and has a huge potential, he said.

“Just 11 percent of all startup endeavors in Indonesia are dedicated to B2B,” Adrian said in the statement.

The company’s research found that B2B e-commerce in China will have a potential worth of $2.1 trillion. B2B e-commerce also represents 50 percent of online transactions in Thailand.

The Indonesian portal aims to help small, medium and big companies to accelerate the procurement for their operational supplies and services. Shipping to all 34 provinces in the country, Bizzy provides thousands of items divided in five main categories: office supplies, electronics, cleaning, pantry and services.

Peter Goldsworthy, chief executive and co-founder of Bizzy, said there had not been many breakthroughs so far in the procurement of supply and services for business needs in Indonesia. He recalled being frustrated with ordering supplies and services, especially in the process of sourcing, approval and shipping.

“Merchants were struggling to meet the needs of businesses. What we were seeing was that the way businesses shop was much more complex than how an individual would and this was causing problems at both ends of the transaction,” Peter said.

Bizzy, he said, entered the business to help customers meet their logistic needs through online services by integrating multiple shipments from multiple vendors, known as “crossdocking” through its partner, e-commerce service provider aCommerce.

Bizzy also acknowledged that the younger generation of decision makers is increasingly important in the B2B sector.

A survey conducted by Google and Millward Brown Digital found that between 2012 and 2014 there had been a 70 percent increase of people aged 18 to 34 doing B2B research.

The data also showed that by 2014, the age group accounted for 46 percent of purchasing decisions made.

“Currently, the younger generations are the key decision makers for company sourcing,” Goldsworthy said. “This changing of the guard means they expect the same information available for personal purchases when they search for business solutions. Bizzy addresses that need.”

Bizzy also support hospitals, foundations, universities and tech startup by providing “Bizzy Wholesale” memberships for them to enjoy wholesale prices without a minimum order for the first year.

Bizzy is set to make a buzz with customers such as Tiket.com, Traveloka, HaloMoney and GrabTaxi.

GlobeAsia

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(GA Graphics/Gimbar)

Jakarta. Thailand-based venture capitalist Ardent Capital announced on Tuesday that it would expand its e-commerce WhatsNew Group to Indonesia under the brand MOXY to tap Indonesia’s female online market.

WhatsNew said in a statement sent to GlobeAsia that MOXY Indonesia will be different from WhatsNew Thailand and will be the first e-commerce service dedicated to women in Southeast Asia.

MOXY will offer tips and products for women related to beauty, fashion, mothers and babies, living, gadgets and “Muslim style” under the tagline ‘Have It All.”

Adrian Vanzyl, chief executive officer of Ardent Capital, said it was a strategic move to enter Indonesia’s large market. Indonesia’s business to consumer (B2C) e-commerce market is valued at $2.6 billion and the female consumer market at $2.4 trillion, according to internal data from Ardent Capital research.

“We realized that the single largest market in Southeast Asia would be Indonesia by the end of 2015,” he said in the statement.

“That shift has already taken place with our portfolio companies and we have assembled an incredibly strong team in Indonesia to scale regionally.”

Shannon Kalayanamitr, chief marketing officer at WhatsNew Group, said the company aimed to build the first online “everything store” for the female consumer.

“As more women join the workforce in Southeast Asia and increase their purchasing power, MOXY will be there to serve their daily lives,” she said.

Ardent has appointed Dutch-born Indonesian Andrew Senduk as CEO of MOXY Indonesia. Senduk previously worked for Deloitte and ING in Europe and has served as the Indonesia country managing director for digital agency Lion&Lion.

Senduk acknowledged Indonesia’s massive development in the e-commerce sector but saw challenges in the venture, such as securing local logistics expertise, he said. To tackle the issue, MOXY will join other Ardent Capital-backed companies, e-commerce service provider aCommerce and business to business marketplace Bizzy.

“Our strategic partnership with aCommerce gives us a local advantage. We are able to lower our costs through increased efficiencies and focus on our core competencies, which are product selection and the customer experience,” he said.

WhatsNew also announced it had appointed Jeremy Fichet as group CEO to lead MOXY.

Fichet was co-founder and managing director of French-based Cdiscount Thailand, a subsidiary of e-commerce conglomerate Group Casino.

Fichet expressed optimism in building MOXY.

“Women lead online shopping in our region and I believe the company has taken the right steps to capture this opportunity,” he said.

“With my experience scaling e-commerce business across multiple countries in Asia, I’m excited to work with the team and influence the company’s future projects right from the beginning.”

Established in 2013, WhatsNew Group started as a group of e-commerce websites that included Petloft, for pet care products, Venbi for mother and baby, Sanoga for health, and Lefema for beauty. The e-commerce venture acquired MOXY in Dec. 2014 as the company tried to diversify its line of business in the female lifestyle sector.

The company said that after the launch of MOXY Indonesia, Thailand’s WhatsNew will also be rebranded under the same name.

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Jakarta. Small businesses that take out a micro loans, or KUR, will be offered a subsidy that will effectively mean interest rates will be cut to 12 percent, a minister announced Wednesday.

Sofyan Djalil, coordinating minister for the economy, said during a limited cabinet meeting led by President Joko Widodo on Wednesday that the government sees the current KUR interest rate — 22 percent — as far too high.

“The government will give a subsidy … so that KUR can only be given 12 percent interest and the gap will be subsidized,” he said.

The plan will be implemented later this year, with the subsidy funds to be drawn from money saved by the cut to fuel subsidies earlier this year.

AA Gede Ngurah Puspayoga, Minister of cooperatives and small and medium enterprises, said the new rate would start in July.

“We are waiting on the technical regulations at the Ministry of Finance,” he said.

In the 2015 State Budget the government allocated Rp 30 trillion ($2.2 billion) for KUR with state-controlled Bank Rakyat Indonesia assigned to distribute them.

The government is focusing on small businesses as a means to boost employment and eradicate poverty.

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Jakarta. Indonesia’s sluggish economic growth affected the pockets of professionals in the country as salaries grew at a slower pace last year, a report from Monroe Consulting Group, a global human resources consulting firm, showed on Monday.

The “Indonesian Recruitment Market Report 2015” — which surveyed 500 skilled professionals with a monthly salary of more than $1,500 and 50 multinational and local companies — unveiled a noticeable reduction in salary increases received by Indonesian professionals last year.

In 2014, 46 percent of professionals surveyed received between 6 percent and 10 percent, compared to 2013 when 49 percent received the same level of increase.

There was also a reduction in the number of workers who received increases of between 11 percent and 15 percent where 36 percent of respondents in 2013 received this level of increase, compared to just 17 percent in 2014.

Bagus Hendrayono, Monroe’s country manager for Indonesia, said as the economy slowed four years in a row by 2014, it had begun to impact the recruitment market.

Although the increases were less than the previous year professionals remain positive with 30 percent of survey respondents expecting to receive more than a 20 percent increase in their salary from their current employer and 20 percent of respondent anticipating between 11 and 15 percent increases.

The slowing trend continued in the first quarter of this year, with January to March economic expansion recorded at 4.71 percent from the same period last year.

It was the slowest year-on-year pace in five years on the back of weak exports and declining crude oil prices.

The survey also showed that Indonesian employers are promoting skilled professionals at a faster rate than other emerging Southeast Asian countries.

Around 30 percent of respondents received a promotion within the previous 12 months compared to just 21 percent of respondents in other countries in the regions.

Andrew Hairs, group managing director for Monroe, said internal promotions in Indonesia served two main purposes.

“First, given the shortage of qualified or experienced senior professionals within Indonesia, employers were forced to promote people based on their potential to grow into a new position,” Hairs said.

“Second, companies were using promotions as a tool to retain people they had already invested in.”

The survey suggested there is still a shortage of skilled professionals available to meet the demands of companies in Indonesia. The report revealed 93 percent of the respondents had been approached and asked to consider a change of employment in the previous 6 months.

Country manager Bagus said the sourcing of skilled professionals at the right price remained highly competitive for many companies.

He said that is because of government’s crackdown on expatriate executives and Indonesia’s education system which continued to fail to produce candidates of sufficient quality to allow Indonesian companies to continue to expand.

“Matters are made worse as the few people coming through Indonesia’s top universities or with degrees gained overseas are not all moving into the corporate sector,” Bagus said.

“Some of Indonesia’s best and brightest look to secure work overseas and many more join family-owned businesses.”

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Indonesia has ranked 69th out of 124 countries in the World Economic Forum’s Human Capital Index 2015, which studied countries’ success in nurturing, deploying and developing human resources.

The country is left lagging behind its Southeast Asian neighbors of the Philippines, Malaysia and Singapore which ranked 46th, 52nd, 24th respectively.

Southeast Asia’s largest economy is classified under lower to middle income nations, along with those which have an income per capita ranging from $1,045 per year to $4,125 per year.

The WEF’s Human Capital Index 2015 is a study of 124 countries covering 46 indicators that measure how far a country is from optimizing its human resources talent — including evaluating the levels of education, skills and employment available — to people across five different age groups, beginning with under 15 years to over 65 years.

Measured by age, Indonesia rank 47th for human capital index in the under 15 age group, partly thanks to the high score in the primary enrolment rate and secondary enrolment rate.

Indonesia scored the worst in the category of 65 and Over Age Group (92rd), with scores in educational attainment, including secondary education, is much lower than the country’s other age groups.

On a 1 to 7 scale in which 1 is the worst score and 7 the best, Indonesia scored 1 for social safety net, internet access in schools and university-business research and development collaboration.

Finland ranked number one in the index, with an overall score of 86 percent.

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Jakarta. State-controlled lender Bank Mandiri will be disbursing Rp 3 trillion ($227 million) in loans to state-owned seaport operator Pelabuhan Indonesia IV, so that the latter can expand its activities in the eastern parts of the country, the lender said in a statement on Tuesday.

Royke Tumilaar, director of corporate banking at Bank Mandiri, Indonesia’s biggest lender by assets, and Pelindo IV president director Mulyono signed a memorandum of understanding on the 7.5-year loan.

Royke said the loan is to support Pelindo IV projects like Makassar New Port and to help the operator improve its equipment and facilities.

Pelindo IV currently operates 26 ports in eastern Indonesia.

The disbursement of the loan, he said, is also meant to accelerate national infrastructure development — in line with the “sea toll” project announced by President Joko Widodo.

“We are pleased that through the synergy between these state enterprises, Bank Mandiri can prove its commitment in strengthening national maritime infrastructure,” Royke said in the statement.

Joko had announced that his administration would focus on maritime development to better connect the sprawling archipelago. Since taking office in October, the president has expressed his ambition to turn Indonesia into a global maritime center and to build 24 new seaports — and 15 new airports — by 2019.

Bank Mandiri has so far disbursed Rp 17.1 trillion in loans for the maritime sector.

The development of Makassar New Port is part of Pelindo IV’s efforts to fulfill the cargo port needs in the South Sulawesi capital and to boost connectivity between various islands in eastern Indonesia.

“Makassar New Port will be integrated with freight railway projects in South Sulawesi, which will make the distribution of goods easier,” the Bank Mandiri statement said.

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Jakarta. Private insurance company Allianz Indonesia saw an increase in its gross premium income last year at its micro-insurance unit as it boosted the number of clients, the company said in a statement on Tuesday.

The Munich-based insurer said its micro-insurance line posted Rp 96.7 billion ($7.3 million) in gross premium income — up 14.63 percent from a year earlier.

The statement said that growth was bolstered by client figures that reached four million — an increase of 47 percent from the number in 2013.

“The growth of micro-insurance is because of our clients’ trust and our business partners that have helped us to introduce and open access to people in acquiring our protection products,” Yoga Prasetyo, head of emerging consumer business at Allianz Life Indonesia, said in the statement.

The insurer recorded that throughout 2014, there were 12,785 insured clients benefiting from the Allianz Indonesia micro-insurance with total claims worth Rp 59.73 billion.

The claim payouts came from credit life insurance products, which remain the biggest contributor to Allianz’s micro-insurance business.

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