PT Astra International Tbk (ASII) earned a net profit of Rp 8.8 trillion in the first half of 2013, the figure fell 9.2% from the previous year’s profit in the same period amounted to Rp 9.7 trillion.
Astra also slowed turnover, from Rp 95.9 trillion in the first six months of 2012 to Rp 94.3 trillion this year. Earnings per share also decreased by 9% to Rp 218 per share.
“Although the outlook remains positive domestic demand, increased competition in the automobile market, the rise in labor costs (Provincial Minimum Wage / UMP) and the decline in commodity prices expected to affect the performance of the business in the second half of this year,” said President Director of Astra International Prijono Sugiarto in press release the company, on Tuesday (30/7/20130.
Astra Group activities focus on six core business lines, namely Automotive Division, Financial Services, Heavy Equipment and Mining, Agribusiness, Infrastructure and Logistics, and Information Technology with the following details: Automotive Division Automotive Division’s net profit fell by 10% to Rp 4, 4 trillion, consisting of Rp 1.9 trillion from the Company and its subsidiaries, as well as Rp 2.5 trillion from associates and jointly controlled entities in the automotive field.
Throughout the first half of 2013, demand for motor vehicles remains high, supported by rising incomes and loan interest rates are still affordable. However, increased competition due to increased domestic production capacity and the high cost of labor has led to decrease in net income contribution from the automotive segment.
Regulatory minimum down payment on auto financing imposed sharia financing for companies since January 1, 2013 and the bank on 1 April 2013, had little impact on the first half performance of the Company. Meanwhile, it is still too early to estimate the impact of rising fuel prices that occurred in late June, the automotive sales.
Total national car sales rose 12% to 602,000 units. Astra’s car sales (Toyota, Daihatsu, Isuzu, UD Trucks and Peugeot) increased 6% to 321,000 units, with a market share decreased from 56% to 53%.
In the first half of Astra launch six new models and eight facelift models. Meanwhile, national motorcycle sales rose 6% to 3.9 million units. Honda motorcycle sales output of PT Astra Honda Motor (AHM) rose 12% to 2.4 million units, with an increase in market share from 57% to 60%. In the first half of 2013, PT Astra Honda Motor launched two new models and five facelift models.
PT Astra Otoparts Tbk (AOP), a company in the field of automotive components, which is 80% owned by the Company, recorded a net profit of Rp 519 billion, down 2%, where 71% is the contribution from associates and jointly controlled entities.
Decrease in net income was primarily due to increased labor costs, although there was an increase in sales in the segment of Original Equipment Manufacturer (OEM) replacement parts and export markets. In the second quarter of Astra Otoparts have to issue new shares amounting to Rp 3 trillion to strengthen its capital structure.
Astra International also has sold 15.7% stake in Astra Otoparts to increase liquidity in the stock market, which results in a transaction value of Rp 2.8 trillion. In April, Astra Otoparts acquire 51% stake in PT Pakoakuina, manufacturer of alloy wheels for four-wheeled vehicles and two-wheeler valued at USD 700 billion by taking all new shares issued.
The government has announced tax incentives aimed at encouraging the production of Low Cost Green Car (LCGC) in the country. Astra Group has products that comply with the government regulations that Astra Toyota Agya and Astra Daihatsu Ayla is expected to begin to be distributed in August with a production capacity of 10,000 units per month.
Division of Financial Services Division of Financial Services Net income increased 19% to Rp 2.1 trillion. Total financing through Astra automotive finance business consisting of Federal International Finance (FIF), Astra Credit Companies (ACC), and Toyota Astra Financial Services (TAFS) increased 6% to Rp 27.8 trillion, including joint financing through bank financing without recourse .
Total weight of equipment financing through PT Surya Artha Nusantara Finance and PT Komatsu Astra Finance fell 42% to Rp 2.6 trillion as a result of declining sales of heavy equipment.
PT Bank Permata Tbk is 44.6% owned by the Company, posted a net profit increase of 15% to Rp 818 billion. Net interest income increased driven by higher loan growth of 27%, despite the increase in operating costs.
PT Asuransi Astra Buana (AAB) subsidiaries engaged in insurance business had a net profit due to higher growth in gross premium income in excess of the increased cost of reinsurance and claims costs.
Heavy Equipment and Mining Division of Net Income and Mining Equipment division fell 24% to Rp 1.4 trillion. PT United Tractors Tbk (UT), which is 59.5% owned by the Company, reported a 25% drop in net income to Rp 2.3 trillion, while net income decreased by 19%.
Business segment net revenue of construction machinery fell 40%, due to lower sales of Komatsu heavy equipment by 42% to 2,452 units. This happens due to decreased demand from the mining sector, especially for large units.
Pamapersada PT Nusantara (PAMA), a subsidiary of mining contractor UT benefited from the increasing mining capacity. PAMA reported net income increased by 12% because the increase in contract coal by 12% to 50 million tonnes of construction and earthmoving contracts (overburden removal) increased 2% to 414 million bcm.
UT subsidiaries in mining reported net income decreased by 44%, which is caused by the decrease in coal sales by 29% to 2.2 million tons. Decline in coal prices and rising fuel prices have a negative impact on net income.
Division Agribusiness Agribusiness Division’s net profit decreased by 25% to Rp 571 billion. PT Astra Agro Lestari Tbk (AAL), which is 79.7% owned by the Company, reported net income of Rp 717 billion.
Although palm oil production increased 11% to 704,000 tons, revenue declined 3% to Rp 5.5 trillion, caused by a decline in the average price of CPO by 16% to Rp 6.638/kg. The decline in revenue is accompanied with the high cost of production and operating costs, resulting in lower net profit.
AAL has started constructing an oil refinery in West Sulawesi, which will change from the crude palm oil plantation in Kalimantan and Sulawesi into olein and stearin. Oil refinery was built at a cost of Rp 750 billion is expected to be operational in early 2014 with a production capacity of 2,000 tons per day.
Infrastructure and Logistics Division Net income Infrastructure and Logistics Division declined by 29% to Rp 223 billion. PT Marga Mandala Sakti (MMS), which operates the toll road operator pathway Tangerang – Merak along 72.5 km, which is 79.3% owned by the Company, noted an increase in the volume of vehicle traffic by 11% to 20 million vehicles. PT PAM Lyonnaise Jaya (PALYJA), a leading provider of clean water in the area west of Jakarta, reported a slight decrease in sales volume of clean water to 78 million m3.
PT Serasi Autoraya (SERA), recorded an increase in revenue, mainly supported by the increasing number of vehicles on contract hire vehicle rental business TRAC 2% with the number of vehicles of more than 31,000 units. The high cost of depreciation and operating costs resulted in decrease in profit by 27% to Rp 97 billion.
Division of Information Technology and Net income and Information Technology Division of Rp 55 billion, up 2% compared to the first half of 2012. PT Astra Graphia Tbk (AG), a company engaged in the field of information technology and the sole agent of Fuji Xerox in Indonesia, which is 76.9% owned by the Company, recorded a net profit of Rp 72 billion, up 2% compared to the same period in ago.