Astra Group businesses is significantly affected by the COVID-19 pandemic, especially in the second quarter of 2020 - Photo by the Company

JAKARTA (TheInsiderStories) – Indonesian conglomeration company, Astra Group businesses is significantly affected by the COVID-19 pandemic, especially in the second quarter (2Q) of 2020. The issuer reported, until June of this year, car and motorcycle sales down dropped 45 and 40 percent, respectively.

According to the president director, Djony Bunarto Tjondro, the pandemic had an impact to the group operations substantially, including the temporary closure of manufacturing and activities automotive distribution, as well as a significant increase in the number of loans restructured in the financial services business.

In addition, the decline in coal prices pressing heavy equipment business, mining contractors, and mining. This pandemic, and the steps taken to control its impact, are expected to continue affect performance until the end of the year, he adds.

“The business and financial performance of the Astra Group is significantly affected by the pandemic, especially in the second quarter,” said Tjondro in an official statement released on July 29.

He continued, during this challenging time with business disruption and uncertainty, 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 (US$2.66 billion).

During 2Q of 2020, the net profit from the of the automotive division declined by 79 percent to Rp716 billion, mainly due to the a significant decrease in sales volume in the second quarter. In details, national car sales decreased 46 percent to 261,000 units and motorcycle sales dropped 42 percent units to 1.9 million units in the first semester (1H) of the year. The sales of the Group’ car and motorcycle declined 92 percent and 40 percent compared to the 1Q of 2020.

The automotive component unit, PT Astra Otoparts Tbk (IDX: AUTO), posted a net loss of Rp296 billion in 1H of the year compared to prior year amounting to Rp246 billion, mainly due to decreased revenues from the manufacturing segment and replacement market.

The net profit’ its mining contractor unit, PT United Tractors Tbk (IDX: UNTR), which is 59.5 percent owned by the PT Astra International Tbk (IDX: ASII), also lowered 28 percent to Rp4.1 trillion. Komatsu’ heavy equipment sales decreased 56 percent to 853 units and PT Pamapersada Nusantara with a 10 percent reduction in the overburden removal to 420 million bank cubic meters and 8 percent reduction in coal production to 56 million tons in 1H of 2020.

In the same period, Astra‘ financial services net income also slumped by 25 percent to Rp2.1 trillion and the net profit plunged 16 percent to Rp545 billion from 1H 2019, mainly due to increased provisions to cover loss of non-performing loans of the consumer and heavy equipment business.

In addition, the Group’ infrastructure and logistics division recorded a net loss of Rp88 billion in 1H of 2020 compared to the net profit of Rp.83 billion in the 1H of last year. The company has a stake in 350 kilometers of operating toll roads along the Trans-Java toll road network and the Jakarta outer ring toll road.

Its other unit in information technology provider, PT Astra Graphia Tbk (IDX: ASGR) net slumped by 64 percent to Rp16 billion. But, the property division’ net profit increased from Rp32 billion to Rp71 billion, mainly due to higher occupancy rates at Menara Astra and from the Asya Residences development project.

The positive growth also showed by its  agribusiness division, the net profit increased significantly to Rp312 billion compared to 1H of 2019 worth of Rp35 billion, due to the higher of crude palm oil price. The unit, PT Astra Agro Lestari Tbk (IDX: AALI), which is 79.7 percent owned by the Group, reported the net profit rose from Rp44 billion to Rp392 billion in the first semester of 2020.

As a group, Astra‘ net income in the 1H of 2020 dropped 23 percent to Rp89.8 trillion compared to the same period o f last year. But the net profit rose by 16 percent to Rp11.4 trillion, supported by profits from the sale of shares in PT Bank Permata Tbk (IDX: BNLI).

US$1: Rp14,500

Written by Editorial Staff, Email: theinsiderstories@gmail.com