30/10/2012 (Jakarta Globe) - Astra Agro Lestari, the largest listed plantation company of Astra International, posted a 10 percent decline in profit in the first nine months of this year due to declining commodity prices.

In a filing to the Indonesia Stock Exchange on Monday, the company said its net income fell to Rp 1.67 trillion ($174 million) in the January-September period from Rp 1.86 trillion a year earlier. Revenue rose 8 percent to Rp 8.55 trillion.

Astra Agro and other plantation companies are grappling with falling global commodity prices as demand for goods such as palm oil slips.

Based on its monthly report, the company produced 1.04 million metric tons of crude palm oil in the nine months to September, 12 percent higher than the same period a year earlier.

In the January-August period, it sold 872,088 tons of CPO, up 11 percent from the same period in 2011.

The proportion of exported CPO during this period shrunk to 1.5 percent of the total sales from 4.9 percent a year earlier.

But in the first eight months, the average selling price of Astra Agro’s CPO fell 0.4 percent to Rp 7,774 per kilogram.

It also sold 120,720 metric tons of palm kernel, 20 percent more than last year, with an average selling price that fell 27 percent to Rp 3,921 per kilogram.

William Simadiputra, an analyst with Trimegah Securities, said that on a quarterly basis, the company’s net income actually rose 38 percent from the second quarter and 27 percent from the third quarter last year.

William said that in the fourth quarter, the CPO price will be between $800 and $900 per ton, giving Astra Agro an average selling price of about Rp 7,200 per kilogram. He estimated a 4.6 percent increase in palm fruit production at the company.

“With these assumptions, we believe Astra Agro’s 2012 top line [revenue] may reach Rp 11.23 trillion, while net profit will arrive at Rp 2.27 trillion,” William said.

The estimated full-year revenue is 4.3 percent higher than last year, while estimated net income is 9.2 percent lower.

Trimegah reiterated its “hold” recommendation for Astra Agro shares, with a target price at Rp 22,000, up 6.5 percent on Monday’s closing price. It traded 1.2 percent lower at Rp 20,650 on Monday, bringing the decline since the start of the year to 4.8 percent.

Astra International is the country’s biggest auto distributor company. Shares in Astra International fell 1.3 percent to Rp 7,850 in Jakarta trading on Monday.