Astra braces for tough times with no end in sight to COVID-19

first_img“Our slowing overall performance in the first quarter of this year was caused by the drop in coal prices,” he said in a statement on Monday.The benchmark ICE Newcastle coal price this year averaged around $65 to $75 per metric ton, lower than the average of $78 per metric ton in 2019, as reported by Kontan on March 27. The lower prices discouraged coal mining activities and hit the company’s business.Although Astra’s subsidiary and publicly listed heavy equipment distributor and mining service provider PT United Tractor (UT) recorded a 25 percent increase in coal sales, that failed to offset a 48 percent contraction in heavy equipment sales and a 9 percent decline in mining service activities.Meanwhile, Astra’s other business segments increased profits during the January to March period. The highest increase was recorded by its agribusiness segment, where profit skyrocketed 887 percent yoy to Rp 296 billion as of March 31, which Prijono attributed to the rise of crude palm oil (CPO) prices.“Although the crude palm oil and palm oil derivative sales volume was down 19 percent, the segment still recorded a jump in profit thanks to the rising CPO price, which was up by 45 percent on average compared to last year,” he said.The profit of the company’s infrastructure and logistics business soared by 356 percent yoy to Rp 73 billion, while that of its property business rose 167 percent yoy to Rp 40 trillion.However, Astra’s biggest profit contributors, the automotive and financial services segments, recorded only slight improvements in performance during this year’s first three months.The automotive segment booked a 1-percent increase in profit to Rp 1.9 trillion despite the 3-percent decline in car sales and 5-percent decline in motorcycle sales during the period.“The increase in profit for this segment was caused by an increase in operating margin and profit from foreign exchange transactions,” said Prijono.The company’s financial services segment also recorded a 1-percent increase in profit to Rp 1.4 trillion during the period, thanks to rising financing for motorcycles.Going forward, the company expected to face more challenges due to social restrictions implemented to curb the spread of the COVID-19, Prijono said.The disease has infected at least 9,500 people in the country with more than 770 deaths as of Tuesday afternoon, official data show, disrupting business activity and hitting demand as customers stay at home following the government’s call to practice social distancing to contain the virus.“This has disrupted Astra Group’s performance in April and is expected to continue until some time in the future,” he said.However, he assured shareholders that the conglomerate remained in a strong financial position that allowed it to mitigate the risks it would face during such a challenging time.Pilarmas Sekuritas equity analyst Maximilianus Nico Demus expected that the company would face bigger pressure as the pandemic’s impacts would rise in the second quarter of this year.“The pandemic will hamper the public’s purchasing power and [eventually Astra’s] sales, particularly in its property and automotive segments,” he told The Jakarta Post on Tuesday, adding that additional pressure would also come from plunging commodity prices following crushing oil prices.Despite the challenges, Maximilianus expressed optimism that Astra would survive the COVID-19 crisis due to its business diversification.“If one segment’s performance drops, other business segments could still cushion the impact so the company can maintain its performance amid the pandemic’s effects,” he said.Astra’s stock traded at Rp 3,740 per share at Tuesday’s close, 0.81 percent higher than the preceding day, while the main gauge of the market, the Jakarta Composite Index (JCI), rose 0.36 percent. Astra’s shares have lost 45.99 percent since the beginning of the year.Topics : Diversified conglomerate PT Astra International expects the COVID-19 pandemic to further affect its already declining financial performance as the outbreak limits social and economic activities.In the first quarter of this year, the publicly listed company booked an 8 percent year-on-year (yoy) decline in profit to Rp 4.8 trillion (US$311.84 million) as its revenue dropped by 9 percent to Rp 54 trillion.President director Prijono Sugiarto attributed the fall in revenue to plummeting sales in the heavy equipment, mining, construction and energy business segment, the third-biggest contributor to the company’s profit.last_img read more

SHOCK AS EASONS LETTERKENNY GOES INTO EXAMINERSHIP

first_imgExclusive: THERE is shock in the business community today after Donegal Daily learned that the company which runs Easons at the Courtyard Shopping Centre in Letterkenny was placed in examinership.The interim examinership which was granted in the High Court in Dublin on Friday afternoon.It gives protection to the company from its creditors for up to 100 days. It is different from liquidation or receivership in that it is designed to allow a company in financial difficulty to re-structure debt in the hope of continuing to trade. However it also means creditors owed money won’t be able to claim it before Christmas.Michael McAteer of Grant Thornton, Chartered Accountants was appointed by the High Court as Interim Examiner of Bookfinder Limited.The company’s current directors are Alan Bundschu and Mark Bundschu. It was founded in Galway in 1986 is headquartered in Salthill.The prime purpose of the Examinership process is to assist companies in financial difficulty and to allow the Examiner formulate a rescue plan for the Company. “The protection period of the Court can extend up to a maximum of 100 days from the presentation of the petition. During this period no creditor is entitled to institute any proceedings against the Company nor can a secured creditor seek the appointment of a Receiver,” Bookfinder Limited said in a letter to people owed money today.The letter goes on: “If the Examiner considers that the Company is capable of surviving he must then formulate what is termed a “Scheme of Arrangement” (“the Scheme”), dealing with liabilities of the Company as at the date of presentation of the petition.“This process is done in close consultation with the management, shareholders and creditors of the Company. The Scheme, when formulated, is presented to the various classes of the Company’s creditors so they can express their views as to its acceptability or otherwise.“The Examiner then reports the outcome of those meetings to the Irish High Court who will then decide whether the Scheme has sufficient support to warrant an order to put the Scheme into effect. Once this order is made the Scheme becomes binding on all creditors and comes into effect not later than 21 days after the Scheme has been approved by the Court.“For Examinership to succeed it is essential that the Company continues without undue disruption while it is under the protection of the Court. In this regard, the Examiner, unlike a Receiver or Liquidator, does not take over the executive powers of the Company.” Creditors are told to contact Grant Thornton with details of the money owed to them.SHOCK AS EASONS LETTERKENNY GOES INTO EXAMINERSHIP was last modified: November 17th, 2015 by John2Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window)Tags:courtyardEasonsexaminershipShockShopping centrelast_img read more