The company’s planned capex has been reduced by half from Rp 20 trillion (US$1.4 billion) to between Rp 10 trillion and Rp 11 trillion this year.

The cut is part of the publicly listed company’s effort to conserve cash amid the impacts of the COVID-19 pandemic on the global economy, according to Astra International’s newly appointed president director Djony Bunarto Tjondro.

“We are also reducing other unnecessary spending and maintaining our cash flow so we can conserve our funds during this trying time,” he said during a press briefing on Tuesday, adding that the strategy also applied to its subsidiaries.

The company suffered a 9.4 percent year-on-year (yoy) decline in revenue in this year’s first quarter to Rp 54 trillion, while its profit also nosedived 7.8 percent yoy. Meanwhile, the company had Rp 29.2 trillion in funds in the first quarter this year, a 20.1 percent increase from the same period last year.

Astra’s many business lines have been hurt by the pandemic, in particular its automotive business, which contributes up to 50 percent to the company’s profit and has been impacted by the steep drop in car sales.

Association of Indonesian Automotive Manufacturers (Gaikindo) data show that just 3,551 cars were sold in the country throughout May, a 95 percent drop compared to the same period last year, as large-scale social restrictions (PSBB) were implemented in a number of regions to contain the spread of COVID-19.

However, Djony stated that the company would still maintain its stable financial performance this year despite the COVID-19 headwinds.

He said the government’s plans to reopen the economy and the relaxation of PSBB measures in several regions, including Jakarta, would help spur an economic recovery.

“We’ve started to see an increase in car sales in June, so we hope the transitional PSBB policy will help restore [our sales],” he said.

The PSBB measures have been seen as hurting Astra’s market share, which plunged to a 10-year low of 31 percent last month, from 48 percent in April, according to a research note from RHB Sekuritas analyst Andrey Wijaya.

Andrey projected that the so-called “new normal” phase would benefit Astra in the long term as people would lean toward using private vehicles over public transportation.

“Astra International should benefit from this trend in the long term, as its popular sports utility vehicle brands account for 40 percent of the 2WD [two-wheel drive] cars on the road in Indonesia,” the research note reads.

Meanwhile, Jasa Utama Capital analyst Chris Apriliony said on May 17 that he believed Astra could still make a profit this year following the sales of its stake in Bank Permata to Thailand-based Bangkok Bank.

Bangkok Bank completed its acquisition of a 89.12 percent stake in Bank Permata in May in an estimated Rp 33.66 trillion deal with the bank’s previous shareholders, Astra International and British lender Standard Chartered Bank (SCB).

Meanwhile, the company’s general shareholders meeting on Tuesday also agreed that the company would disburse Rp 8.66 trillion in dividends this year. The company will pay Rp 214 per share, unchanged from last year.

The shareholders meeting also agreed to appoint former president director Prijono Sugiarto, who has led the company for the past 10 years, as the firm’s new chairman, as he was succeeded by Djony Bunarto Tjondro, according to the company’s chief of corporate affairs Riza Deliansyah.

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