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Garuda posts first quarter loss from “profound impact” of COVID-19
July 3rd 2020
Garuda Indonesia said this week the coronavirus pandemic was having a "profound impact" on its operations and financial health after it slumped into the red in the first quarter of calendar 2020. Read More »
The airline group reported a net loss of US$120.2 million for the three months to March 31, 2020, from a net profit of $20.5 million a year ago.
Revenue fell 30.1%, to $768.1 million, Garuda said in a regulatory filing to the Indonesia stock exchange.
"The COVID-19 pandemic has created an extremely challenging business environment for airlines globally," Garuda said in its consolidated financial statements. "The pandemic has severely hit the company’s operational and financial condition."
Garuda and its subsidiary, Citilink, carried six million passengers in the three months to March 31, down 22% from 7.7 million in the same months in 2019. The figures were even weaker for April, when passenger numbers tumbled 90.8% as the closure of international borders, restrictions on domestic flying at home and government-imposed stay-at-home orders left airlines worldwide with little choice but to cancel flights and ground hundreds of aircraft.
Garuda said it had operated cargo-only flights, closed uneconomic routes and right-sized the operating fleet in efforts to navigate through the pandemic.
The company's financial statement said it had worked to renew short-term loan facility agreements, requested banks and other financial institutions to "irrevocably waive the company's financial covenants", renegotiated with vendors to maintain cash flow and lower costs and sought extra time to make lease payments on aircraft.
"Considering the challenging situation of the COVID-19 pandemic, the company has been proposing principal and interest payment deferrals of six Bombardier CRJ-1000 aircraft financial leases for the period from June to December 2020 to Export Development Canada," Garuda said.
"Until now, the principal and interest payment deferral proposal still is in the process of negotiation with Export Development Canada."
Garuda was in the black on an operating profit basis, which removed one-off items and was regarded as the best indication of financial performance, albeit at a significantly reduced level.
The company said it achieved an operating profit of $616,040 for the three months to March 31, down 98.8% from $49.5 million in the prior corresponding period.
Figures from Johns Hopkins University in the U.S. showed there have been 57,770 confirmed cases of COVID-19 in Indonesia. Of those who tested positive for the virus, 2,934 people had died from COVID-19 and 25,595 had recovered.
Written by Jordan Chong
