JAKARTA (TheInsiderStories) - The palm oil company, PT Astra Agro Lestari Tbk (IDX: AALI) prepared capital expenditure around Rp1.2 trillion (US$85.10 million) for next year, said the management on Monday (12/22). The amount was higher than this year’ budget of Rp1.1 trillion.
President Director of Astra Agro Lestari, Santosa, said most of the funds will allocates for the replanting program, while Rp250 billion for factories, ports, infrastructure and other supporting facilities. The rising capital expenditures, he said, with hope that the national production of crude palm oil (CPO) become better in 2021.
“From the demand side, hopefully there will be no decline in 2021 considering that until now many countries are still busy with the pandemics,” he noted by adding that CPO players must be ready to anticipate the worst conditions.
To help the industry, said Santoso, the main key is in the government’ biodiesel program and lowering the export tax. Now, the government allowed exporters not pay the CPO levies when prices were below US$570 per ton and imposed a maximum levy of $55 per ton if the price rises above $619 a ton.
He continued, in the midst of the current difficult situation, Astra Agro continues to ensure that its operations will run normally although demand is currently low. In terms of sales, he explained, the CPO inventory in China and India is quite low after the two countries locked the country.
In third quarter of 2020, the issuer posted a net profit of Rp582.54 billion, skyrocketing 424 percent compared to the same period last year amounting to Rp111.18 billion. The net income also rose 7.56 percent from Rp12.38 trillion to Rp13.32 trillion.
The Astra Group businesses was significantly affected by the COVID-19, especially in the second quarter of 2020, according to the president director, Djony Bunarto Tjondro. He continued, during this challenging time, Astra focuses on reducing operational costs and capital expenditure, working capital management, and liquidity certainty.
He asserted, the Group’ balance sheet remains strong with the availability of commitment of loan facilities worth Rp38.6 trillion. Recently, the conglomeration firm, PT Astra International Tbk (IDX: ASII) cut nearly half of its capital expenditure from Rp25 trillion to around Rp11 trillion due to the pandemic.
Beside, he continued, the publicly listed firm will focus on controlling costs and protecting the cash flow. Astra will also review projects and ongoing investments or to delay projects that are not critical.
The funds will be absorbed by its subsidiaries such as heavy equipment company, PT United Tractors Tbk (IDX: UNTR), Astra Agro, and other subsidiaries. The source of the spending is obtained from internal cash.
US$1: Rp14,100
Written by Editorial Staff, Email: theinsiderstories@gmail.com
