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Astra seeks new opportunities in mining, infrastructure
Astra's net profit dropped by 6 percent in the first half of the year.
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PT Astra International president director Prijono Sugiarto explains the business group's expansion plan. (kompas.com/Kristianto Purnomo)
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iversified conglomerate PT Astra International is seeking to further expand its businesses in the mining and infrastructure sectors to reduce its reliance on car manufacturing.
The publicly listed company was hit badly during the first half of this year as the country’s car sales dropped sharply during the January-June period. To make matters worse, low crude palm oil (CPO) prices also caused its plantation subsidiary PT Astra Agro Lestari to suffer a financial loss during the first six months of 2019.
With such unfavorable conditions, Astra booked a 3 percent increase in total revenues to Rp 116.18 trillion (US$8.147 billion) year-on-year (yoy), but its net profit fell by 6 percent to Rp 9.8 trillion.
According to the Association of Indonesian Automotive Manufacturers (Gaikindo), the country’s total car sales dropped by 13 percent yoy to 481,557 cars during the January-June period. Astra, which has a 53 percent market share in the country’s car market, reported a 5.5 percent drop in car sales during the period.
Market analysts believe that sluggish sales would continue in the second half, as there have been no signs of improvement in the economy. With such conditions, Astra will further step up cost-efficiency measures, said the group’s president director, Prijono Sugiarto.
“For the short term, we’re trying to be the lowest-cost producer,” he told reporters during a press briefing at the Indonesia Stock Exchange (IDX) in Jakarta on Monday.
In the meantime, he said, the company would also look for new opportunities to expand its other business, particularly in mining and infrastructure.
