ASII Reallocated the Capex

Astra International Tbk (ASII) reallocated capital expenditure (capex) to raise the infrastructure division. This strategy aims to overcome the deceleration in the heavy equipment segment and mining contractors.

Prijono Sugiarto, the President Director of ASII, said that the infrastructure, logistic, and property sectors get 38% of the 14 trillion IDR worth of ASII consolidated capex. “There is a deceleration on the heavy equipment segment. Capex United Tractors, which is usually 5 trillion IDR – 6 trillion IDR but has become 3 trillion IDR, is being reallocated to the infrastructure sectors,” said Prijono.

On the first term in 2016, the net profit contribution from the infrastructure, logistic, and other sectors with their net profit soared by 156% to 174 billion IDR. On the other hand, the net profit contribution from the heavy equipment and mining segment decreased by 45% to 1.12 trillion IDR.

ASII consolidated revenue on the first term in 2016 dropped by 5% to 88.2 trillion IDR. Their consolidated net profit also decreased by 12 % to 7.1 trillion IDR.
In trading on Tuesday (2/8), ASII stock price had weakened to 7.975 IDR per level. Morgan Stanley recommended Buy for ASII share with a target price of 8.700 IDR. (*)