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).