JAKARTA (TheInsiderStories) - The pandemic has hit the financial conditions of state-owned flag carrier PT Garuda Indonesia Tbk (IDX: GIAA) in the first semester (1H) of 2020. The company reported loss Rp10.1 trillion (US$696.55 million) after booked a net profit of $24.11 million in the 1H of last year.
According to the CEO, Irfan Setiaputra in an official statement released last week, the COVID-19 forced the firm to cut its frequency from 400 a day to 100 flights and was affected its revenues and profit. In addition, he said, the number of passengers has also plummeted by around 90 percent.
Garuda’ total revenue also nosedived by 58.2 percent to $917.28 million in the same semester. In the 1H of 2020, the income from scheduled flights plunging by almost 60 percent to $750.26 million but from unscheduled or chartered flights soared by almost 400 percent to $21.55 million.
To help the national flight carrier, Setiaputra has proposed issues mandatory convertible bond to state financial firm, PT Sarana Multi Infrastruktur, with worth of Rp8.5 trillion. So far there are no responses from the government on the company proposal.
Due to weak financial conditions, the issuer has failed to fulfill its obligation to pay the matured global SUKUK bond worth of $500 million and its asset back securities Rp1.44 trillion. For the global SUKUK, Garuda had received the approval from bond-holders to extend the tenure from initially matured on June 3, 2020.
The company also is in talks with Airbus SE (AIR.PA) to delay the deliveries of four aircraft. Earlier the airlines company has cancelled the orders of 49 units Boeing 737 Max 8. The flight firm also aims to restructure its aircraft leasing and to terminate unsuited contracts. Early of this year, Setiaputra said will bring in four new Airbus aircraft was order in 2016.
Garuda ordered around 14 units of Airbus series A330 – 990 Neo type. The booking agreement was witnessed by President Joko Widodo in London, England. In November 2019, the first A330 – 900 Neo had landed.
Currently, the flight carrier operates 204 aircraft, consisting of 139 fleets use by the company and 62 aircraft operated by its unit PT Citilink Indonesia. As many as 105 units are narrow body type aircraft and 34 units of wide body type.
A total of 181 aircraft operated by Garuda are chartered, while 20 are owned by the company. Setiaputra admitted that the flight company explores various options to overcome the company’ debts amid the COVID-19 outbreak.
Quoting the 2019′ financial statements, the company has a total loan of $1.83 billion and a net loan of $1.53 billion while the equity share reached $720.62 million. Its mean, the debt to equity position around 2.55 times and net debt to equity ratio about 214 percent.
Setiaputra stated, beside renegotiate with its creditors, Garuda is also seeking financing support from financial institutions. In addition, the airline planned to cut its expenses by 20 percent, and is seeking some form of government support.
Last year, the flight company recorded a net profit of $6.99 million. The achievement of this 2019′ profit reversed the 2018 net loss of $231.16 million which was booked after restated the financial report.
The net profit was in line with Garuda‘ total revenue which rose 5.5 percent to $ 4.57 billion last year from the previous year of $ 4.33 billion. But in the first quarter of 2020, the company actually posted a net loss, reversing from the previous bookkeeping profit due to decrease in income.
US$1: Rp14,500
Written by Editorial Staff, Email: theinsiderstories@gmail.com
