April 24 (Bloomberg) -- PT Astra International, Indonesia’s biggest automotive retailer, said first-quarter net income slipped 7 percent from a year earlier due to higher costs and lower commodity prices that hurt its palm oil business.
Profit in the three-months ended March 31 declined to 4.3 trillion rupiah ($442 million), Astra said in an e-mailed statement in Jakarta today. First-quarter sales climbed to 46.7 trillion rupiah from 46.4 trillion rupiah, it said.
The contribution from the automotive business declined because of tougher competition and higher labor costs, said the Jakarta-based company, even as a record-low benchmark interest rate buoys consumer spending. Astra sells Toyota Motor Corp. cars and Honda Motor Co. motorcycles.
“Indonesia’s economic prospects remain positive,” President Director Prijono Sugiarto said in the statement. “Although in the short term, Astra’s profit will be impacted by an increase in labor costs, a weakening of commodity prices, and competition in the automotive industry.”
Tighter downpayment rules for Shariah-compliant automotive loans will also affect earnings, Sugiarto said.
Astra’s palm oil unit, PT Astra Agro Lestari, said yesterday first-quarter net income slipped 5.7 percent from a year ago to 356.4 billion rupiah, while heavy equipment unit, PT United Tractors, said today net income dropped 27 percent to 1.1 trillion rupiah.
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