Shares of Astra International Tumble after Weak Q1-2016 Corporate Earnings
Astra International, one of Indonesia's largest diversified conglomerates and regarded the barometer of the Indonesian economy due to the company's presence in most sectors of the economy, posted a 22 percent (y/y) decline in net profit to IDR 3.11 trillion in the first quarter of 2016. Meanwhile, its revenue fell 7 percent (y/y) to IDR 41.89 trillion over the same period. The weak financial performance was particularly attributed to weak earnings of the company's heavy equipment unit United Tractors. Shares of Astra International fell 5.21 percent on Wednesday's trading day (27/04) to a seven-week low.
Besides weak heavy equipment sales, disappointing corporate earnings of Astra International in Q1-2016 were also caused by the bleak mining sector, while in the automotive sector the contribution of Toyota car sales also declined. The automotive segment is the largest contributor to Astra International's earnings and therefore declining sales have a large impact on the company's overall financial figures. Astra International's automotive business experienced a 3 percent (y/y) decline in profit to IDR 1.58 trillion in Q1-2016. Through a jointly-controlled entity with the Toyota Motor Corporation, Astra International holds the exclusive right to sell Toyota vehicles on the Indonesian market (Toyota being most popular car brand in Indonesia's wholesale car market).
Prijono Sugiarto, President Director of Astra International, said the Astra Group remained under pressure in the first quarter of 2016 due to weak demand for cars, low commodity prices and slowing corporate credit disbursement of its financial services unit Bank Permata. These challenges are likely to stay in the foreseeable future.
Regarding the staggering 168 percent (y/y) growth in net profit to IDR 418 billion of palm oil unit Astra Agro Lestari, Sugiarto said this growth is caused by profit obtained from the appreciating rupiah exchange rate toward its US dollar-denominated monetary liabilities.
Astra International's Corporate Earnings:
| Q1-2015 |
Q1-2016 | Change (Y/Y) |
|
| Net Revenue | 45,187 | 41,887 | -7% |
| Net Income | 3,992 | 3,112 | -22% |
| Net Earnings per Share¹ | 99 | 77 | -22% |
| Net Asset Value per Share¹ | 2,521 | 2,588 | +3% |
in billion of IDR rupiah
¹ in rupiah
Source: Astra International
Astra International's Net Income per Business Segment:
| Business Segment | Q1-2015 |
Q1-2016 | Change (Y/Y) |
| Automotive | 1,621 | 1,580 | -3% |
| Financial Services | 1,191 | 641 | -46% |
| Heavy Equipment & Mining | 983 | 442 | -55% |
| Agribusiness | 124 | 333 | +168% |
| Infrastructure, Logistics & Other | 36 | 82 | +128% |
| Information Technology | 37 | 34 | -8% |
| Total | 3,992 |
3,112 |
-22% |
in billion of IDR rupiah
Source: Astra International