Astra reports lower car sales, profit

One of the biggest conglomerates in Indonesia, Astra International Tbk, has reported lower revenue and lower net profit in the first nine months of 2016, by 8 percent and 17 percent respectively, as its automotive sales dropped by 20 percent.

Based on its latest corporate earnings report, Astra recorded a consolidated net profit of Rp 12 trillion (US$876 million), down 17 percent year-on-year (yoy) from Rp 14.5 trillion in the same period of 2014. Their revenue dropped to Rp 138.18 trillion.

“The challenging business situation that Astra group is facing continues and we predict the performance of all our business lines will not change significantly for the rest of the year,” said president director of Astra International Prijono Sugiarto in a press statement on Thursday.

Astra, particularly known for its domination in Indonesia’s automotive sector, recorded a 20 percent drop in car sales for January-September, down to 382,000 units. This sales performance is worse than the average of the industry  which saw an 18 percent drop in car sales, down to 765,000 units, in the same period.

Thus, the company’s market share of the car-manufacturing industry reduced from 51 percent as of Sept 2014, to 50 percent today. Meanwhile, its market share of the motorcycle industry rose to 68 percent, from 63 percent, despite sales slowing by 20 percent to 4.8 million units.

The company, controlled by the Hong Kong-based Jardine Matheson Group, found all of its seven subsidiaries recording slower growth in net profit, except for mining and heavy-duty machinery business which grew 15 percent in net profit to Rp 3.34 trillion.

“United Tractors, which 59.5 percent of the shares controlled by the company, recorded a 6 percent decline in revenue but its net profit rose 17 percent to Rp 5.6 trillion, thanks to the depreciated rupiah. It earned some of its revenue in US dollars, and had assets in US dollars,” Prijono explained.

In contrast, the net profit in the Astra’s agribusiness line dropped 92 percent, from Rp 1.5 trillion in January-September 2014 to only Rp 116 billion ar the same period. Infrastructure business followed with a 64 percent drop in net profit, to Rp 91 billion.

The automotive business reported a 10 percent drop in its Jan-Sept 2015 net profit to Rp 5.3 trillion. “In general, the low automotive demand in the first nine months of 2015 caused by the slowing economy. The price discount in car-market due to production overcapacity gives negative effect to our net profit,” Prijono said. (bbn/dan)