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July 30, 2008

Indonesia: Astra profit jumps in Q2

Indonesia's largest automotive distributor, PT Astra International Tbk, showed an 85 percent jump in second-quarter net profit, according to calculations made by Reuters. 

The company however expects a tougher second half due to rising interest rates. Astra, which owns plantations and mining-related businesses, has benefited from surging commodity prices as well as strong demand for its cars and motorcycles -- sectors which are sensitive to higher interest rates.

"Some segments in our business might face an increasingly challenging market in the second half of 2008 with (higher) inflation and a tendency of rising interest rates," Michael D. Ruslim, president director of Astra, said in a statement.

"However we are confident that the company will still be an attractive prospect in the medium and longer term," he added.

Astra, controlled by Singapore's Jardine Cycle & Carriage Ltd, showed a net profit of 2.5 trillion rupiah ($274 million) in the April-June period, up from 1.35 trillion rupiah in the same period a year ago, calculated from the firm's published first-half and first-quarter results.

Revenue in the second quarter jumped 45 percent to 24.5 trillion rupiah, from 16.9 trillion rupiah a year ago, based on Reuters calculations.

Astra's plantation unit, PT Astra Agro Lestari, and heavy machinery subsidiary, PT United Tractors, have also reported strong gains in first-half profit, reflecting demand for palm oil and for equipment used in the coal-mining industry.

Indonesia's consumer price inflation topped 11 percent in June after the government raised subsidised fuel prices by around 30 percent in May, and the central bank has been forced to raise its benchmark interest rate in a bid to curb inflation.

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