JAKARTA (TheInsiderStories)–PT Garuda Indonesia Tbk (IDX: GIAA) eyes US$500 million loans to pay off this year’s maturing debts.
Garuda Indonesia‘s Finance and Risk Management Director Helmi Imam Satriyono said on Monday (30/7) that the loans consists of US$300 million of syndication loan and US$200 million of a bilateral loan. He added that the rupiah depreciation against US Dollar caused the firm to shift rupiah currency loan to US dollar currency loan. The company will increase the hedge level to 50 percent from previous 20 percent to anticipate further rupiah depreciation against US dollar.
“Our first half could be considerable savings [from hedging] of US$35 million. In the future we will continue to monitor,” Satriyono said, as quoted by Kontan.
He said that in addition to refinancing, the company also negotiates to extend the maturity period. The company’s short-term debt that matures this year reaches 65% of the total Garuda Indonesia loan.
The company recorded US$1.9 million in revenue in the first semester this year, a 5.9 percent up from US$1.8 million in the first semester last year. However, the company still booked US$114 million in a loss in the first semester of this year, a 59.8 percent down from US$283.8 million in the first semester last year.
President Director of Garuda Indonesia Pahala N. Mansury said the loss decline due to the company action to increase revenue and boost expenditure efficiency at the same time. One of the efficiencies held by the company is reducing unprofitable flight routes this year. Mansury stated the company reduces unprofitable flight route to 11 routes from 22 routes.
The company recorded US$2.1 billion in expenditure in the first half of this year, up 0.3 percent from the first semester last year. The aviation fuel expenditure up 12 percent (year on year) that contributed to 30 percent or US$639.7 million of the total expenditure in the first semester this year. It higher than 27 percent or US$571.1 million of the total expenditure in the first semester last year.
Garuda Indonesia targets to earn a net profit of US US$8-10 million. However, the target is reviewed due to rupiah depreciation and aviation fuel price hike. Garuda Indonesia serves flight to more than 90 destinations consisting of 22 international destinations and 68 domestic destinations.