Astra Quarterly Profit Gains as Car Sales Beat Commodity Slump
Stock Chart for Astra Agro Lestari Tbk PT (AALI)
Net income at PT Astra International (ASII), Indonesia’s biggest automotive retailer, climbed 2.9 percent in the third quarter as gains in vehicle sales outweighed declines at its palm oil and heavy equipment units.
Net income in the three months ended Sept. 30 rose to 4.99 trillion rupiah ($519 million) from 4.85 trillion rupiah a year earlier, according to calculations by Bloomberg News. Nine-month revenue at Astra, whose businesses include automotive, finance, commodities and infrastructure, increased 20 percent from a year earlier to 143.1 trillion rupiah, it said in an e- mailed statement today. The Jakarta-based company sells Toyota Motor Corp. (7203) cars and Honda Motor Co. (7267) motorcycles.
“Earnings were supported by Astra’s auto parts and four- wheeler segments as sales have been amazingly resilient,” Laurentia Amica Darmawan, who helps manage about $530 million in assets at PT First State Investments Indonesia in Jakarta, said by telephone today before the earnings were announced. “That’s probably because purchasing power improved.”
Bank Indonesia keeping its benchmark interest rate at a record low since February and faster economic growth are helping companies such as Astra sell more cars and motorcycles. Astra is betting on stronger auto sales as the global economic downturn hampers growth at its commodity based units such as PT Astra Agro Lestari. The Thomson Reuters/Jefferies CRB Index of raw materials has fallen 7.7 percent over the past year as Europe’s debt crisis and slowing growth in China cut demand.
Bank Indonesia held its interest rate at 5.75 percent on Oct. 11 while Southeast Asia’s biggest economy expanded 6.37 percent in the second quarter, accelerating from the previous three months. Domestic vehicle sales rose 24 percent in the nine months through September to 816,322 units, according to data from the automotive industries group released by Astra Oct. 15.
“Even though our business prospect remains good and Astra group is expected to achieve a satisfying business performance this year, the fall in commodity prices may affect the company’s performance going forward,” President Director Prijono Sugiarto said in the statement today. “Lower demand in the heavy equipment segment reflects a weakening coal price while a recent drop in palm oil prices is also affecting the company’s profit level.”
Nine-month net income at heavy equipment unit PT United Tractors (UNTR) climbed to 4.47 trillion rupiah from 4.35 trillion rupiah a year earlier, as gains in its mining contracting business outweighed lower sales. Nine-month sales at Indonesia’s biggest heavy equipment distributor fell 15 percent from a year earlier to 5,455 units amid softening coal prices and tighter competition, Astra said in the statement.
Net income at Astra Agro, a palm oil producer, slipped to 1.67 trillion rupiah in the nine months through September from 1.86 trillion rupiah a year earlier, it said Oct. 29. Palm oil has tumbled into a bear market as stockpiles in Malaysia, the second-largest producer, gained to a record last month while slower global economic growth cut demand. Futures on the Malaysia Derivative Exchange, a global benchmark, ended at 2,501 ringgit ($819) a ton yesterday, 31 percent lower than the year’s closing high on April 10.
Shares of Astra, Indonesia’s largest company by market value, rose 8.8 percent this year, underperforming the benchmark Jakarta Composite index gain of 14 percent. The stock climbed 0.6 percent to 8,050 rupiah at the close in Jakarta today.
Astra’s third-quarter earnings were derived by subtracting first-half numbers from the nine-month earnings announced today. Two calls to Astra’s office to confirm the third-quarter earnings weren’t answered.
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