Ten Billion Dollar Club

Seven companies listed on Indonesia Stock Exchange (IDX) currently have market capitalization over US$10 billion.

They are Astra International (US$19 billion), Telkom Indonesia (US$18.3 billion), Bank Central Asia (US$15.5 billion), Bank Mandiri (US$12.25 billion), Perusahaan Gas Negara (US$11.34 billion), Bank Rakyat Indonesia (US$11.16 billion), and Unilever Indonesia (US$10.4 billion).

Combined, these Seven Giants have market capitalization of US$97.95 billion.

Looks like the 10 Billion Dollar Club will not get new member soon. Why? Because, the eight largest company, United Tractors, only has market cap of US$6.9 billion. Unless this company will grow at least another 45% this year.

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New record for Astra

The stock price of Astra International (ASSI) reached its new record high this morning at Rp38900 to make it a US$17 billion (Rp157.5 trillion) company. Astra gained 5% this morning.

Astra is just inches away from becoming the largest company on IDX. Astra is only US$1.4 billion away from taking over the position from Telekomunikasi Indonesia (TLKM). TLKM currently has market cap of Rp170 trillion and already lost 10.6% this year, while Astra gained 12%.

Two of Astra subsidiaries, PT United Tractors (UNTR) Tbk and PT Astra Agro Lestari (AALI) Tbk are also listed in the Top 20. UNTR is currently ranked 10th with market cap of Rp56.04 trillion, while AALI ranked 17th with market cap of Rp37.7 trillion. UNTR is now bigger than Bumi Resources (Rp47 trillion) and just inches away from No.8 Adaro Energy (Rp59.5 trillion). The top 7 will unlikely change in the coming weeks, because No. 7 Unilever currently has market cap of Rp88.9 trillion, quite substantial gap with Adaro.

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Prijono confirmed as Astra CEO

Prijono Sugiarto has been appointed as the new CEO of Astra International (ASII) to replace Michael Ruslim who passed away in late January.

Mr. Sugiarto joined Astra in 1990 and was previously responsible for all the non-Toyota automotive businesses of Astra. He obtained his Dipl.-Ing. in Automotive Engineering from the University of A. Sc. Konstanz, Germany in 1984, and Dipl.-Wirtschaftsing. in Business Administration from the University of A. Sc. Bochum, Germany in 1986.

Shareholders also appointed Mr. Sudirman M. Rusdi as a new director of Astra with effect from the close of the Extraordinary General Meeting of Astra held earlier today until the close of the Annual General Meeting of Astra in 2011.

Mr. Rusdi is an Indonesian citizen and has been with Astra since 1978. He is the Vice-President Director of Astra Daihatsu Motor. As a director of Astra, he will now assume responsibility for all the non-Toyota automotive businesses of Astra.

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Federal profits jumps 32.6%

PT Federal International Finance, a motorcycle financing company controlled by Astra International, reported net profit of Rp812 billion last year, increased 32.6% from 2008 despite lower sales revenue of 3.7%.

FIF reported net sales revenue of Rp4.3 trillion or about US$458 million last year, declined 3.7% from 2008 on lower motorcycle sales nationwide. But the company managed to boost its profitability, most likely due to bigger gap between cost of funds and interest rates charged to motorists. Profit margin soared 38% to 12.9% last year.

The net profit of Rp812 billion represents ROE of 27.9%, increased 7.4% from 2008 and ROA of 8.9%. FIF had total asset of Rp9.13 trillion, declined slightly by 0.4% from 2008 with liabilities down 8.7% to Rp6.2 trillion.

For comparison, Adira Dinamika Multi Finance (ADMF), a subsidiary of Bank Danamon, reported sales revenue of Rp3.94 trillion, increased 16.6% from 2008, while net profit grew 18.8% to Rp1.21 trillion. Adira then reported ROE of 45.7% and profit margin of 30.8% last year. Thanks to the motorists who're willing to pay up to 42% interest per annum.

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Jardine boosts ownership in Tunas Ridean

Jardine Cycle & Carriage Limited, a subsidiary of Jardine Matheson, has purchased 77.35 million shares of PT Tunas Ridean (TURI) Tbk, main dealer of BMW cars, at Rp1500/share.
Jardine Cycle & Carriage, controlling shareholder of Astra International (ASII), paid Rp116 billion or US$12.5 million for 4.5% shares of TURI. With the purchase, Jardine now controls 43.8% shares in TURI.
Today the stock closed at Rp1910, increased 0.53% from Wednesday. At that price, TURI has market capitalization of Rp3.28 trillion.

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Michael Ruslim passes away

Michael Ruslim, president director of PT Astra International (ASII) Tbk passed away this morning in Singapore Mt Elizabeth Hospital, Kompas.com reported few minutes ago. We reported two days ago that Michael was evacuated from Jakarta to Singapore due to dengue fever.

Some of his friends said it was just too late to evacuate Michael. Dengue fever could be very dangerous if the detection was too late. Dengue started with a very high fever for 2-3 days and the fever rapidly dropped on the third day.

Born in Bandung, West Java, in November 29, 1953, Michael married to Trisni Puspitaningtyas. They have two children: Gisela and Gilang.

He was appointed as President Director of PT Astra International Tbk in May 2005. He has overall responsibility for the Group's businesses. He was previously Vice President Director from 2002 to 2005 and Director from 1991 to 2002. Prior to joining the Company in 1983, he was Assistant Vice President of Citibank N.A. Jakarta. He graduated from the University of California at Berkeley in 1976 with a Bachelor's degree in Industrial Engineering and holds a Master in Business Administration from the University of Wisconsin - Madison in 1978.

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Astra CEO evacuated to Singapore

Micahel Ruslim, CEO of Astra International, has reportedly been evacuated to Singapore hospital due to dengue fever, people close the executive told us this morning. "He got the dengue few days ago. Hopefully he will recover," one of Michael's friends said. 

He was appointed as President Director of PT Astra International Tbk in May 2005. He has overall responsibility for the Group's businesses. He was previously Vice President Director from 2002 to 2005 and Director from 1991 to 2002. Prior to joining the Company in 1983, he was Assistant Vice President of Citibank N.A. Jakarta. He graduated from the University of California at Berkeley in 1976 with a Bachelor's degree in Industrial Engineering and holds a Master in Business Administration from the University of Wisconsin - Madison in 1978.

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Automotive sales drops 27%

New car sales dropped 27% last month on long Lebaran holidays. Toyota maintained its domination in the market.

Car sales for September reached 35,000 - 36,000 units, where Toyota sold 14,400 cars, declined 21.7% from the previous month. Overall, according to Gaikindo statistics, car market declined 28% to 335,334 units for the first nine months of 2009. The automotive business association predicts a 22% to 24% market decline this year. 

Overall, Toyota controlled 38.4% market share in Jan-Aug 2009 with 115,187 units, followed by Daihatsu (47,583 units), Mitsubishi (37,200), Suzuki (28725), and Honda (23,426).

Meanwhile, motorcycle sales dropped 30% last month, also due to the long holidays. Motorcycle sales reached its record high of 626,478 units in August, even higher than August 2008. Total motorcycle sales in Jan-Aug 2009 is 3.718 million units, closer to the industry's target of 5 million units this year.

Astra International is the biggest player in both cars (Toyota, Daihatsu etc) and motorcycles (Honda). Astra's stock price has surged 210% this year to Rp32800.

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Single Presence Policy & Bank Consolidation Sweeteners

Indonesia Central Bank had issued two important decrees that would accelerate consolidation in the banking industry. The first, Bank Indonesia Regulation No.8/16 on single presence policy and the second, BI Reg No.8/17 on incentive packages for bank consolidation. Which banks should merge under the new policy? What's happen to state-owned banks? How about foreign-owned banks? Small banks? What are the sweeteners?

Exerpts from SPP according to BI Reg No.8/16 are as follows:
1) Parties could only be controlling shareholder in one bank, except
(a) Controlling shareholders of two banks with different banking principles, ie, conventional and sharia. Banks fall into the category are Bank Mega with Bank Syariah Mega or Bank Mandiri with Bank Syariah Mandiri, etc
(b) Controlling shareholder in two banks in which one of them is a joint venture bank. Like in the case of Standard Chartered and Bank Permata (JV between Stanchart and Astra Group), or branches of foreign banks
(c) bank holding company established by controlling shareholder to control and manage directly the shareholdings in more than one bank,

2) There are options for those who controls more than one bank:
(a) Divest shares partly or in full,
(b) merger
(c) establish a bank holding company by establishing new company as the holding company or appoint one of the banks as holding company.
3) The bank holding company should be a company registered under Indonesian law.

What are the sweeteners for those who want to consolidate their banking business?
WRITING IN PROGRESS

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Astra Agro sales increased 18.1%

PT Astra Agro Lestari (AALI) Tbk, a plantation subsidiary of PT Astra International Tbk, reported 18.1% increase in crude palm oil (CPO) sales volume in January-August 2006 to 617,712 tons, thanks to 39% export growth (reached 206,530 tons or 33.4% of total sales). As the world price of CPO increased 8.4% to US$451/ton, AALI's average CPO price slightly improved by 2.9% in the period.

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Farallon-Rajawali to acquire Bumi assets?

PT Bumi Resources Tbk is reportedly engaged in a negotiation with a new alliance of a global fund manager & Indonesian conglomerate to replace PT Borneo Lumbung Energi as the buyer of its assets (PT Kaltim Prima Coal, PT Arutmin Indonesia, and PT Indocoal) with financial back-up from Credit Suisse.

Rumors in the investment bankers circle said Farallon Capital is reportedly the global fund manager, while the Indonesian group is Rajawali Corporation. Both companies---allied in the acquisition of Cemex SA shares at PT Semen Gresik---denied the rumor.
"They are working together to try to do that. But I don't think they will succeed...," an investment banker in Singapore said. He said JP Morgan, which also involved in the Cemex deal, approached Farallon-Rajawali. JP Morgan, an advisor for Bumi in the collapsed US$3.2 billion deal with Borneo, also denied the negotiation and rumor of the close relationship between JP Morgan and Farallon Capital.
JP Morgan helped Willow Finance (a vehicle owned by Bakrie family) in the issuance of US$205 million facility linked with Willow's shares in Bumi, exchangeable at Rp500/share. Farallon was the key financier for Bakrie family when they bought KPC from Rio Tinto through Merrill Lynch. Farallon also lent huge amount of money to Berau Coal investors when they bought the company from Astra.
Why doubt?
"It's too big even for them. They also don't have the operational expertise in coal mines. Besides, they already bussy with very ambitious goals for the company they just bought recently," he said.
Are they interested in buying minority stakes?
"No I doubt. These guys are only interested in if they can take the whole thing."
So, I other friends-analyst about Rajawali's chance.
"Where you got the information from? Let me check. But from what I read in the newspaper, with EBITDA below US$300 million in the first half, the assets would have low price. I don't think Bumi would proceed with the divestment."
Well, the poor EBITDA news is considered by some as the door to wage a hostile takeover. (By whom?)
What if Bumi cut the price?
"I think Bumi won't do that because it will send negative sentiment to the company's shares. Even if they do that Borneo has the biggest chance because the deadline for their the sales and purchase agreement (SPA) actually by the end of this month."
How serious? Could it be just part of efforts to boost market sentiment ahead of JSX's plan to lift the suspension on Bumi shares trading? Or to save the hedge funds who bought Willow Finance EB?
But, hostile takeover?
"I think, the Bakrie family is vulnerable to investors. If Bumi shares plunge, it would make sense for Willow bondholders to exchange into shares...sensing that, I wouldn't be surprised if the family is becoming defensive. I know some people out there would resort to hostile measures," said a senior analyst.
Tired or bored with the issue, go to Porong, Sidoarjo, enjoy the hot mud treatment there! They have new entertainment there...mud wrestling!

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H1 2006 performance of listed companies

Indonesian listed companies reported mix results in their first half 2006 performance with majority of companies reported lower net profit on poor margin.


Sampoerna, sales +29.4%, profit +20.8%
Gudang Garam, sales +2.8%, profit –49%
BAT Indonesia, sales –4%, loss Rp16bn against profit Rp22bn

Unilever, sales +13%, profit +8.9%
SMART, sales +13%, profit +2,550%
Cahaya Kalbar, sales +193%, loss –97%
PT Perkebunan Nusantara III, sales +16.7%, profit +8.3%

Tunas Baru Lampung, sales –19%, profit +1,172
Budi Acid Jaya, sales +8.4%, profit +73.9%
Suba Indah, sales –90%, loss –90%

Bimantara, sales +22%, profit +2,550%
RCTI, sales +4.9%, profit +4%

Adhi Karya, sales +40.5%, profit –87%
Tigaraksa Satria, sales +14.5%, profit +185%

Astra International, sales –13%, profit –38%
Astra Otoparts, sales –20.4%, profit –28.9%
Astra Graphia, sales +14%, profit +50%
Prima Alloy, sales +17.8%, profit –81%

Semen Gresik, sales +24.9%, profit +106%
Kalbe Farma, sales +3.1%, profit +27%
Enseval, sales +2.4%, profit –6%
Excelcomindo, sales +48.5%, profit Rp358bn (against loss of Rp52bn)
Samudera Indonesia, sales +4%, profit –80%

Medco Energi, sales +26.5%, profit +17%
Bukit Asam, sales +10%, profit –9%
United Tractors, sales +16%, profit –3.4%

Gajah Tunggal, sales +14%, profit -38%
Tri Polyta, sales +15%, profit Rp92bn (against loss of Rp367bn)
Berlian Laju Tanker, sales +22.5%, profit +49.4%
INCO, sales +1.4%, profit -16.9%
AQUA, sales +1.6%, profit +6%

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Heard in the street: Suba Indah acquisition

Debt-ridden corn starch producer PT Suba Indah Tbk might have new controlling shareholder. Two groups, Gudang Garam and businessman Teddy P Rahmat (former CEO at Astra International) are reportedly in discussion with Suba Indah owners about a possible takeover.

People close to the groups said the discussion is still in early stage. "It's in the approach stage with Gudang Garam and Teddy Rahmat as potential investors," the businessman said and dismissed speculation of Cargill Inc might interested in acquiring Suba Indah.
But people close to Teddy Rahmat denied the report. "No, we're not looking Suba," he said.
State-owned PT Bank Mandiri Tbk as the biggest creditor at Suba mounts pressure to the company to service its Rp994 billion bad debt (more than US$100 million). Suba reported negative equity of Rp90 billion as of December 2005.
Two weeks ago Suba Indah reported to JSX that the shareholders were willing to pledge some property and mining assets as collateral to restructure Bank Mandiri loans after the bank soften its demand from cash payments.

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Biofuel politiconomics

Indonesia is in the mood of everything related to biofuel, biodiesel, or bioenergy. And it's not just a respond to sky-high fossil fuel price. It's about politics for 2009 election.

Energy Minister Purnomo Yusgiantoro told the press today that a limited cabinet meeting chaired by president Susilo Bambang Yudhoyono in Malang, East Java over the weekend set the target of 2010 for a mass consumption of biofuel in the country that has been struggling to keep up fossil oil production with increasing demand.
As reported by Detik.com in Sunday, Purnomo said by 2010 biofuel could save 10% the consumption of traditional diesel oil and gasoline, plus 50% of the country's electricity. Ambitious plan. Late last year, research ministry announced that by 2015, up to 10% of the nation's oil consumption could be met with biofuel.
Biofuel, according to the cabinet meeting, supports three basic policies: Pro-Growth, Pro-Poor, and Pro-Jobs. Pro-Growth means biofuel would support a higher economic growth, pro-poor means significant cut in fossil fuel subsidy, and pro-jobs means creating new jobs in the biofuel industry right from its upstream (plantation and the such) to downstreams (biodiesel plants and distribution).
President's spokesperson Andi Malarangeng claimed the program would create jobs for 3.5 million people.
Several raw materials were mentioned in the roadmap to biofuel. They're palm oil, molasses, casava, jatropha etc. Industry Minister Fahmi Idris came quickly with government's plan to build eight biofuel plants with jatropha as the raw materials.
In fact, companies have jumped into the business in a frenzy way in the last few months. Life science company DuPont, for example, announced its innitiative to produce biofuel based on corn in Indonesia in a cooperation with Beyond Petroleum (BP). Some state-owned and local private companies have also announced innitiatives to produce biodiesel based on palm oil. Big palm oil companies like Astra Agro, Bakrie Sumatra Plantations, for example, have announced their respective plans to build biodiesel plants. Wilmar Trading, the largest CPO trader in Asia, is reportedly drops a plan to build biodiesel plant in Singapore and relocate that to Indonesia. Others plans to build ethanol plants based on molasses in various parts of the country.
But the country, just like others, is facing the dilemma. Excessive land usage, for example, could raise the environmental problem in itself. Government claimed there are 50 million hectares of land in Indonesia that suitable for jatropha plantation.
To be continued........

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LG add US$331 million investment in Indonesia

PT LG Eletronics Indonesia (LGEI) to expand its operations in Indonesia with additional investment of US$331 million, the only major investment for the country in manufacturing sector in the last few years.

According to people close to LGEI, a subsidiary of South Korea's electronic giant LG, the new investment will absorb 203 new jobs. Under the major expansion plan, LGEI will boost production capacity of LCD (250,000 units/year), TV (1.2 million units/y), audio/video/car radio cassete (7 million units/y), and refrigerator (1.6 million units/y).
The new plants will be located at Kawasan Industri MM 2000, Bekasi, West Java province.
LG Electronics Indonesia which was named as PT Goldstar Astra (a JV with Astra Group) was established in 1990. In 1998, LG assumed 100% ownership at the company and subsequently change the name to PT LG Eletronic Indonesia.
Currently, the company is a major national force in electronics and information and communication products with more than 2000 employees in all regions in Indonesia.
LGEI is involved in three main businesses. First, Digital Display & Media (Digital TV, PDP, Monitor, CD-ROM Drives, DVD-ROM Drive, Super Multi DVD RW, Combo, Portable Combo, DVD Player, Audio). Second, Digital Appliance (Air Conditioner, Refrigerator, Microwave oven, Washing Machine). Third, Communication Handset both for GSM & CDMA.
LG is among the biggest investors in Indonesia. Besides LGEI, LG has other subsidiaries namely LG Innotek (established in 2000 to produce TV tuner, VCR head and components), LG Phillips (established in 2001 to produce CRT and electro gun), LG Insurance, and LG International Corp.

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Dorodjatun, commissioner at Hero

Former coordinating minister for the economy Dorodjatun Kuntjoro-Djakti has been appointed as independent commissioner at retail giant PT Hero Supermarket Tbk along with another high profile professional Budi Setiadharma, former president director at PT Astra International Tbk.

Hero Supermarket is one of the largest retailers in Indonesia with market capitalization of Rp1.94 trillion as of June 9, 2006, right behind Matahari (Rp1.97 trillion) and Ramayana Lestari (Rp5.13 trillion).
Last week, media quoted Jakarta Stock Exchange (JSX) director saying the authority would ask Hero why the company never paid dividend to shareholders in nine consequtive years since 1997 while the company booked profit along the way (except in 2003). I think Dorodjatun as the new independent commissioner should address the issue for the sake of public interest.
Hero operates four major retail chains---Hero, Guardian, Starmart, and Giant.

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Observers: Mind your words & paychecks!

A friend told me few days ago that one of the largest telecommunication companies in Indonesia had retained two media 'observers' as lobbyist with monthly fee of US$8,000 per month. What's the job? To defend the company's policies in public, lobbying regulators or parliament. Nothing wrong with that. But I hate to see media quoted these guys as 'observers'. Blame the journalists? Sure, because they're too lazy to do little research on who's talking. But these paid observers should tell the truth to public at large too.

I read an advertisement this morning about a seminar about telecommunication and corruption. One of the speakers would be the lobbyist but claimed himself in the ad as media and telecommunication law expert. The other guy would be the moderator of the panel discussion and claimed himself a public policy observer. I smell something.

So I decided to tell my reporters to be careful with these guys, not because they're paid observers but because they didn't tell public that they're representing the telecommunication industry.

That's also my standpoint when it comes to observers like Umar Juoro and Aviliani, both serve as commissioners at Bank Internasional Indonesia (BII) and Bank Rakyat Indonesia (BRI) respectively. They have the rights to be commissioners, but when they make statement, journalist should tell public that these guys are also work for a company that might related to the statements. On the other hand, these paid economists should frankly tell public that they said so representing a company's view.

Journalists should also make it clear to readers on some economists turns legislators. I just can't understand that guys like these mix up things easily and keep the readers in the dark on whether they talk as economists or legislators paid to serve people's interests.

Observers should also tell the truth when submitting op-ed to newspapers. We often see an expert staff for the state-owned enterprises minister and also commissioner in a state-owned bank, under the state payroll, wrote op-ed about SOE policies in newspapers as a lecturer. Or the president of a state-owned investment bank wrote an op-ed with the title as SOE observer.

So, I decided to list down economists or observers currently under the payroll of some companies/agencies:

- Umar Juoro: Economist, commissioner at Bank International Indonesia (BII)

- Aviliani: Economist from INDEF, commissioner at Bank Rakyat Indonesia/BRI (state-owned bank)

- Drajad Wibowo: Economist, legislator from Partai Amanat Nasional (PAN), former commissioner at Bank Negara Indonesia (SOE).

- Sunarsip: Economist, commissioner at BRI

- Didik J. Rachbini: Economist, legislator from PAN

- Pradjoto: Banking law expert, commissioner at Bank Mandiri (state-owned bank) and Bank Internasional Indonesia (BII)

- Arif Arryman: Economist from Econit, commissioner at Telkom (state-owned)

- Setyanto P. Santosa: Economist, commissioner at Indosat
- Muhammad Ikhsan: Economist, expert staff for Coordinating Minister for the Economy, former commissioner at PT Bakrie & Brothers Tbk (owned by Bakrie Family)
- M. Chatib Basri: Economist, advisor to government, commissioner at PT Astra Otoparts Tbk
- Sjahrir: Economist, advisor to president Susilo Bambang Yudhoyono
- Anggito Abimanyu: Economist, Executive at the Ministry of Finance, Commissioner at PT Telkom
- Kurtubi: Economist, staff at Pertamina (SOE)
- Prof Subroto: Economist, advisor to PT Medco Energi Internasional Tbk (oil and gas company); Commissioner at PT DBS Bank Indonesia (a subsidiary of DBS Singapore).

- Prof Sadli: Economist, commissioner at PT Sepatu Bata Tbk
- Sutrisno Iwantono: Economist, commissioner at PT Bank Bukopin Tbk.

- Raden Pardede: Economist, commissioner at PT Bank Central Asia Tbk

- Cyrillus Harinowo: Economist, commissioner at PT Bank Central Asia Tbk

- Prof Roy Sembel: Management expert, commissioner at PT Bank Niaga Tbk
- Prof Din M. Syamsuddin: Chairman of PP Muhammadiyah, chairman of Syariah supervisory board of PT Bank Danamon Tbk (a subsidiary of Temasek Holdings)
- Rijanto: Bank observer, commissioner at PT Bank Panin Tbk

Imagine how much money a commissioner at a state-owned bank could get?

According to the financial report of BRI in 2005, bonus for the management was Rp19 billion with stock option of Rp35 billion. The state-owned bank didn't disclose the salary for both directors and commissioners. Bank Mandiri disclosed it better. Total salary for Mandiri's commissioners was Rp13.8 billion, stock option of Rp169 billion for the management, and bonus of Rp26 billion for the financial year 2005.

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Motorcycle sales to drop 25%

Indonesian motorcycle sales would likely to drop 25% in the first quarter 2006 due to reduced consumer spending, Antara reported.
Johannes Hermawan, director of PT Astra Honda Motor, the largest motorcycle producer in the country, predicts the Q1 sales would only reach 862 thousands unit against 1.151 million units in Q1 2004.
The Indonesian Motorcycle Manufacturers Association (AISI) announced early this year that motorcycle sales in 2005 rose 31.2 percent to 5.1 million units from 3.89 million units in 2004. Industry analysts say the dramatic increase in sales is a result of improving consumer sentiment during the fast half of 2005 and a shift to more fuel-efficient forms of transportation following early October fuel price increases.
AISI, however, predicts that higher interest rates, inflation, and reduced consumer spending will result in 2006 motorcycle sales of fewer than 3 million units.
Hermawan said Astra was targeting 52% market share. In the first quarter Astra's market share would be 50% the most. Weak demand is predicted to continue until the end of first half.

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Astra's profit decreased 5 percent

The largest automaker and distributor PT Astra International Tbk booked total sales of Rp61.17 trillion (almost US$6.22 billion) in 2005, increased 36 percent from Rp44.92 trillion (US$4.83 billion) in 2004. Sounds good. But look at the sales in US dollars, the actual growth was just 28.77 percent as the rupiah depreciated around 6 percent against US dollars last year.
As costs of goods sold jumped 37 percent, Astra booked 33 percent increase in gross profit at Rp13.72 trillion. Operating expenses also increased by 37 percent due to huge increase in general and administration costs. As a result Astra booked Rp6.41 trillion (US$652 million) of operating profit, a growth of 28.9 percent from 2004.
With significant growth in the contribution of associated and jointly controlled entities at Rp2.16 trillion, Astra's performance actually more 'real' than the previous year with almost Rp575 billion of gain in foreign exchangetranslation.

All in all, Astra then booked net profit of Rp5.457 trillion (US$551 million), 0.96 percent higher than Rp5.40 trillion (US$581 million) even though in US dollar the company's profit actually lower by 5.16 percent.

With the huge drop in automotive sales in the first three months of 2006, Astra is facing a difficult year.

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Aisin Seiki acquired more shares in Indonesia unit

Japanese Aisin Seiki Co Ltd has completed the acquisition of 16% shares in automotive parts manufacturer PT Aisin Indonesia at Rp123.33 billion (US$13.4 million) to boost its total shares in the company to 56.1%.

Aisin bought additional shares from PT Senantiasa Makmur, a subsidiary of listed automotive parts manufacturer PT Astra Otoparts Tbk. With the acquisition, Senantiasa's shares decreased to 34%. Other shareholders at PT Aisin Indonesia are Aisin Takaoka Co Ltd (3.3%), Aisin Chemical Co Ltd (3.3%), and Toyota Tsusho Corporation (3.3%).

PT Astra Otoparts Tbk is a subsidiary of diversified group PT Astra International Tbk. The group is the largest automotive manufacturer and distributor in Indonesia. Singapore's Jardine Cycle & Carriage Limited is the largest shareholder at Astra International with 50% stakes.

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