Astra reports losses of $34.8 million

JAKARTA (JP): Publicly-listed PT Astra International said yesterday that it suffered losses of Rp 278.7 billion (US$34.8 million) last year because of its increasing debt burden in rupiah terms.

In 1996, Astra booked a net profit of Rp 469.45 billion.

Despite the loss the company reported a 29.2 percent increase in consolidated net revenue to Rp 15.87 trillion last year from Rp 12.28 trillion in 1996.

Company spokesman Aminuddin said the company's financial burdens soared by 156.1 percent to almost Rp 2 trillion last year from Rp 780.3 billion in 1996 due to the sharp depreciation of the rupiah against the U.S. dollar and rising domestic interest rates.

The rupiah dropped from 2,383 against the U.S. dollar at the end of 1996 to 5,300 at the end of 1997.

Because of such a drastic drop, Astra's debts automatically soared in rupiah terms.

Astra allocated extra funds to hedge about 30 percent of its foreign debts and renew matured swap transactions.

Despite the falling rupiah and the subsequent economic crisis, Astra booked increasing sales from all divisions.

Astra's automobile division sold 191,047 vehicles last year, up from 160,563 vehicles in 1996. Astra's market share improved to 49.4 percent from 48.4 percent.

The popular Toyota Kijang van dominated last year's automobile sales. Toyota Astra Motor, the company which produces Toyota cars here, sold 81,134 Kijangs last year, up from the targeted 75,000, thanks to the introduction of new Kijang models in early 1997.

The Astra Mobil Group, which produces automobiles under the Isuzu, Daihatsu, BMW, Peugeot and Nissan brandnames, sold 86,969 vehicles last year, up from 80,599 units in 1996.

The motorcycle division, which produces Honda motorcycles, also recorded a sales increase, to 1.8 million units last year from 1.38 million units in 1996.

Increased sales were also recorded in other divisions, including financial services, agribusiness, heavy industry, document services and consumption goods.

Aminuddin said the management of Astra International had introduced basic strategies for the company and its affiliates to withstand the impacts of the crisis this year.

These included pursuing a healthy cash-flow and debt management, forging strategic alliances with prospective foreign partners, raising fresh funds through the initial public offering of shares in PT Astra Otoparts as well as assessing investment portfolios and the possibility of asset sales.

Aminuddin said that to manage a healthy cash-flow, Astra instructed subsidiaries to cut all costs, both in production and operation, improve productivity and efficiency and not to undertake new investment or expansion, except for PT Astra Agro Lestari.

"The management hopes that, with the implementation of those measures, Astra will be able to survive this difficult situation," he said. (rid)