Astra International, Telkom earn big in Q1

JAKARTA. Diversified conglomerate PT Astra International and telecommunications firm PT Telekomunikasi Indonesia (Telkom) reported increases both in top and bottom lines in the first quarter of 2014, thanks to bigger contributions from several of their businesses.

According to its financial report, Astra posted Rp 49.82 trillion (US$4.28 billion) in revenue during the first three months of the year, up 6.7 percent on a year earlier. Meanwhile, its net profit reached Rp 4.73 trillion in the first quarter of the year, surging by 9.7 percent on the year.

Astra president director Prijono Sugiarto attributed the good performance particularly to higher crude palm oil (CPO) prices and the conglomerate’s growing coal mining business.

Astra, whose main business is automotive, felt the pressure last year, particularly from government policies affecting cars and motorcycles and plunging commodity prices.

Astra cars sales grew 12 percent to 173,000 units in the first quarter of 2014 compared to the same period last year. Meanwhile, Astra’s motorcycle sales rose by 4 percent to 1.3 million units in the period, higher than the national increase of only 1 percent.

Despite higher sales volume, Astra’s profit from its automotive segment fell by 5 percent to Rp 2 trillion in the first quarter year-on-year, the company’s data showed.

Astra enjoyed a higher contribution from its agribusiness with profits rising by 120 percent. The increased profit was due to a 38 percent year-on-year increase in the CPO price. Astra runs its palm oil business through subsidiary PT Astra Agro Lestari.

Meanwhile, heavy equipment and mining remained squeezed as sales continued to decline, figures showed. 

However, the decline was offset by improving coal sales volume, contract mining and spare parts sales, which boost the sector’s profit contribution to the parent company by 39 percent.

“Discounting in the car market has continued to have a negative impact on earnings, despite stronger volumes. It is expected that heightened competition in the car market and a subdued outlook for coal prices will continue until year’s end,” Prijono said in a statement.

Shares in Astra, which are traded on the Indonesia Stock Exchange (IDX) under the code ASII, closed at Rp 7,600 on Monday, down 3.49 percent on the day. Astra, Indonesia’s biggest company in terms of market capitalization, announced its first quarter performance after the market closed.

Meanwhile, state-owned Telkom reported Rp 21.25 trillion in revenue from the January to March period 2014, increasing by 8.7 percent from a year earlier. The growth is slower than the 9.8-percent increase reported in the first quarter of 2013, the company’s data showed.

Its profit grew slower than revenue, at 4.9 percent to Rp 3.65 trillion in the first three months of the year compared to the same period for 2013.

Telkom finance director Honesti Basyir said growing competition in the market contributed to the lower growth.

“This business is getting mature. Moreover, XL and Indosat are rising again after facing some problems last year, making competition tougher. Therefore, if we can grow by 8.7 percent in the first quarter it’s good in an industry that only expects 6 to 7 percent,” Honesti said, referring to two telecommunications operators.

He added that Telkom expected to post growth in the range of 7 to 8 percent by the year’s end. The main driver of the growth would be data business, according to Honesti.

According to its financial report, Telkom’s rising revenue was due mainly to income from data business, which rose around 25 percent to Rp 5.16 trillion during the January to March period of the year compared to Rp 4.14 trillion year-on-year. Cellular and connection revenue only rose about 6 percent while SMS revenue was flat.

According to Honesti, Telkom’s cellular subscribers consisted of 133 million users as of the end of March, increasing by around 10 percent year on year. Land line subscribers were recorded at 9.4 million at the end of first quarter, increasing by around 4 percent year-on-year.

Telkom’s first quarter performance, which was released during the trading hours, failed to boost its share price. Shares in Telkom, which are traded under the code TLKM, ended down 1.48 percent to Rp 2,330 apiece on Monday. (Raras Cahyafitri)