Astra International, Indonesia’s biggest listed company, said on Wednesday its first quarter 2012 net profit rose 8 percent, though its auto sales growth may slow as the central bank looks to clamp down on a boom in consumer loans. Car sales in Southeast Asia’s largest economy are expected to hit another record high in 2012, up 4 percent, but growth will be slower than the 17 percent seen in 2011, when new middle class consumers snapped up brands such as Toyota.
Growth for Astra, the country’s top auto retailer, may be further slowed by a government regulation that will set minimum downpayments for auto purchases from June as policymakers seek to prevent price bubbles and excessive lending in the country. “We’re optimistic on the long term, though in the short term the automotive and financial divisions will be affected by the new regulation,” said Astra’s CEO Prijono Sugiarto.
The central bank will from June 15 set a minimum downpayment for private car loans at 30 percent and for motorbikes at 25 percent, after previously leaving banks to decide these levels.
“Astra, which has most of its revenue coming from this segment, was hurt, and the first quarter result has not come as expected,” said Jemmy Paul, equity fund manager at Jakarta-based Sucorinvest Asset Management, which owns a stake in Astra.
“Subsidiary results may not be too surprising, but I still expect Astra’s bottom line to rise 10 to 15 percent this year,” Paul said.
Astra, controlled by Singapore’s Jardine Cycle & Carriage Ltd and that also has palm oil, coal and heavy equipment businesses, reported first quarter net profit of 4.65 trillion rupiah ($505.85 million), compared with a net profit of 4.3 trillion rupiah a year earlier. Analysts forecast full year 2012 net profit up 9 percent to 19.4 trillion rupiah, according to Thomson Reuters I/B/E/S. Indonesia’s economy is expected to grow at over 6 percent this year, after sealing the highest full-year growth in 15 years in 2011, and the resilience was rewarded with rating agencies recently lifting the country to an investment grade status.
Astra shares closed down 0.7 percent on Wednesday ahead of the result, having held steady in the first quarter to underperform the broader Jakarta market’s 7.8 percent rise. ($1 = 9,192.5 rupiah)