Bad Loans at Bank Permata, Low Coal Prices Slash Astra's Profit
Jakarta. Diversified conglomerate Astra International saw its net income fall by 6.3 percent in the first nine months of this year, compared to the corresponding period last year, as bad debt slashed profit at its banking unit, Bank Permata, and low coal prices undermined its heavy machinery business.
Astra, which has businesses in a variety of sectors, including automotive, heavy equipment and mining, financial services, agribusiness, infrastructure, logistics, property and information technology, booked Rp 11.3 trillion ($865 million) in profit in the January-September period. It reported profit of Rp 12 trillion in the corresponding period last year.
Astra's net earnings per share also dropped from Rp 296 to Rp 279, while sales fell to Rp 132 trillion from Rp 139 trillion.
"Astra's performance this year is expected to reflect the company's gradual improvement in automotive and agribusiness, and recovery in heavy equipment and mining, even though there are still mounting concerns over Bank Permata's bad loans," Astra president director Prijono Sugiarto said in a statement on Monday (31/10).
Astra's automotive unit saw a 12 percent increase in net income to Rp 6 trillion, with the company having launched several new vehicle models and revamped older models to boost sales.
Car sales rose by 10 percent to 422,000 units. The company's sales performance exceeded the national total, which only rose by 2 percent to 783,000 units.
Astra's motorcycle sales declined by 3 percent to 3.2 million units, while the national total declined 10 percent to 4.4 million units.
Financial Services
Astra's net income from its financial services – including a bank, insurance and vehicle financing firms – dropped by almost a third to Rp 2.1 trillion.
Bank Permata recorded Rp 1.2 trillion in consolidated net losses between January and September, compared to Rp 938 billion in net income in the corresponding period last year.
The lender saw its bad loans increase to 4.9 percent of the total at the end of September.
United Tractors, Astra's heavy equipment and mining contractor subsidiary, booked Rp 3.1 trillion in net income, which is 44 percent less than last year, as low coal prices decreased demand for heavy equipment.
Astra's property, infrastructure, logistics and agribusiness units all performed well in the January-September period, but net income at its information technology unit Astra Graphia fell by 15 percent to Rp 105 billion despite an increase in sales.
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