MARKET DEVELOPMENT
Agro Losses Drag Down Group Results
Agro Losses Drag Down Group Results
30/10/2015 (Nikkei Asian Review) - Indonesian automotive company Astra International said on Thursday that net profit in the nine months ending in September fell 17% year on year to 12 trillion rupiah ($840 million) with large foreign exchange losses in its palm oil unit and weak consumer demand.
Revenue declined 8% to 138.17 trillion rupiah. Astra partners Toyota Motor and Daihatsu Motor among others, and sold 382,000 cars and 3.3 million motorcycles -- down 20% and 14% respectively year on year. High inflation and weak commodity prices have eroded consumer confidence.
Profits in Astra Otoparts, the auto parts unit, dropped 72% as import costs soared with the weak rupiah. The group's finance division also booked reduced profits with weak demand for car loans.
Astra Agro Lestari, a listed agribusiness, was the worst hit unit with profits plunging 92% to 116 billion rupiah. It suffered from reduced prices and sales of crude palm oil compounded by a foreign exchange loss of 957 billion rupiah on dollar debt. More positively, sales of olein, a palm oil derivative, more than doubled to 300,000 tons as some crude oil production was shifted to refined products.
"The challenging trading conditions facing the group are set to continue and we expect our trading performance to remain little changed for the remainder of the year," said Astra President Prijono Sugiarto.
Astra's heavy equipment division, which handles Komatsu heavy equipment and coal contract mining businesses, stemmed some of the losses with a 15% increase in profit. Despite a 40% fall in heavy equipment sales, the weak rupiah boosted the value of dollar- denominated income.
Revenue declined 8% to 138.17 trillion rupiah. Astra partners Toyota Motor and Daihatsu Motor among others, and sold 382,000 cars and 3.3 million motorcycles -- down 20% and 14% respectively year on year. High inflation and weak commodity prices have eroded consumer confidence.
Profits in Astra Otoparts, the auto parts unit, dropped 72% as import costs soared with the weak rupiah. The group's finance division also booked reduced profits with weak demand for car loans.
Astra Agro Lestari, a listed agribusiness, was the worst hit unit with profits plunging 92% to 116 billion rupiah. It suffered from reduced prices and sales of crude palm oil compounded by a foreign exchange loss of 957 billion rupiah on dollar debt. More positively, sales of olein, a palm oil derivative, more than doubled to 300,000 tons as some crude oil production was shifted to refined products.
"The challenging trading conditions facing the group are set to continue and we expect our trading performance to remain little changed for the remainder of the year," said Astra President Prijono Sugiarto.
Astra's heavy equipment division, which handles Komatsu heavy equipment and coal contract mining businesses, stemmed some of the losses with a 15% increase in profit. Despite a 40% fall in heavy equipment sales, the weak rupiah boosted the value of dollar- denominated income.