JAKARTA -- A stellar performance at Astra International's financial services and heavy equipment divisions helped Indonesia's largest publicly-listed conglomerate log a 25% increase in net profit for last year.
Astra said on Tuesday that its 2017 net income jumped to 18.8 trillion rupiah ($1.3 billion), while revenue rose 14% to 206 trillion rupiah.
The financial services division booked the highest profit increase at 3.7 trillion rupiah, nearly five times the amount in 2016. Bank Permata, 44% of which is owned by Astra, booked 748 billion rupiah in profit after a net loss of 6.5 trillion rupiah the previous year -- with the bank's gross non-performing loans nearly halving from 8.8% to 4.6%. Astra's insurance subsidiary and a motorbike multifinancing unit also reported positive performances with respective increases in net income of 9% and 11%.
The commodity sector recovery has contributed to Bank Permata's return to profit, as well as the improving performance of Astra's heavy equipment division -- the second biggest contributor to the company's revenue. United Tractors, a heavy equipment distributor majority owned by Astra, posted a 48% net income jump to 7.4 trillion rupiah.
"The increase [in United Tractors' profit] was caused by the significant strengthening of coal prices -- leading to improved performances of the construction machinery business, mining contractors and also mining activities," Astra President Prijono Sugiarto said in a press statement.
The positive performances of the financial services and heavy equipment divisions helped offset negative growth in Astra's automotive business, its main revenue contributor.
Astra said price pressures from "tighter competition" caused a 2% drop in its car sales to 589,000 units last year -- causing its market share in Indonesia's automotive industry to shrink slightly from 55% to 54%, despite the launches of 11 new car models and 11 revamped models over 2017.
The 2017 profit growth is Astra's highest in more than five years.
"The Astra Group is hoping to keep benefiting from improving economic conditions as well as stable commodity prices," Sugiarto said.