DEPOK (eNBe Indonesia) - Flag carrier Garuda Indonesia (GIAA) booked profit attributable to owners of US$3.74 billion in 2022, against loss of US$4.16 billion in 2021, as it recorded US$2.85 billion income from debt restructuring and gained US$1.38 billion on payment term restructuring.
Garuda involved in the suspension of debt payment or settlement (PKPU) since December 9, 2021 and it ended with the homologation result in June 27, 2022.
And the peace deal had been passed by judge of commercial court, in which, the settlement scheme is made gradually through operational cashflow, converting debt into equity, modifying new long term debt payment regulation, and settlement by haircut in the form of new loan.
Operations?
Improved, of course. Garuda booked revenue of US$2.1 billion in 2022, jumped 61.5% year on year (y/y). Both scheduled and non-scheduled (hajj flights) reported strong recovery last year.
Operating expenses declined 3.4% y/y to US$2.52 billion, but recording operating loss, whilst substantially smaller than 2021.
Garuda’s cashflow balance sheet improved, as it generated net cash of US$261 million from operating activities during 2022, higher than US$82.4 million it generated in 2021.
Payment for aircraft maintenance reserve fund reached US$177.5 million, lower than US$227.7 million it paid in 2021.
Garuda’s cash and cash equivalent rose to US$521.7 million by end December of 2022, from US$54 million by end December of 2021.
Garuda reported that its liabilities reached US$7.77 billion by end December 2022, of which long term lease liabilities accounted for US$2.4 billion and long term estimated liability for aircraft return and maintenance cost accounted for US$2 billion.
Short term lease liability was US$170 million, compared to US$1.84 billion a previous year.
Garuda’s assets reached US$6.2 billion, so it recorded negative equity of US$1.5 billion, meaning an unsound performance. The accumulated losses and higher loan for leased aircraft are factors on Garuda’s negative equity.
Garuda is said to focusing on its most profitable routes and cutting back on its loss-making international routes.
It plans to launch rights issues or to issue bonds worth US$330 million, to strengthen its capital after securing the court overseen agreement with creditors.
Garuda is set to issue 68.07 billion new shares, representing 268.97% of enlarged capital, priced at Rp182-210 per unit, to raise total proceeds of Rp14 trillion.
A stronger balance sheet will allow the flag carrier to recover number of fleets to 130 aircrafts this year from 80 last year.
Going forward, Garuda should have better earning prospect as air travel has recovered alongwith the declining Covid cases.
The flag carrier has also resumed flights for Hajj, adding flight frequencies, improving its operational performance.
President Director of GIAA, Irfan Setiaputra, stated that his party would focus on the company’s business plan as it promised at PKPU, and profitability.
Irfan is optimistic the flight recovery will occur quickly this year in line with increased mobility and public interest in traveling.
The he aviation sector has been hit hardly by the impact of the pandemic since 2020.
Irfan said GIAA could record operational performance growth this year, and GIAA’s passenger growth will be optimal.
Previously, Irfan also mentioned that GIAA targets to operate a total fleet of 124 aircraft by 2023, including for its subsidiary, Citilink.
The target of operating the fleet, both Garuda Indonesia and Citilink, is one of the implementations of the company’s performance recovery process, after the restructuring, which was completed last year.
The Ministry of Transportation (Kemenhub) is also optimistic that the number of air passengers in 2023 will increase compared to last year.
The flight of domestic passengers have recovered by 71% and international flights recovered 33%. Kemenhub predicts number of passengers to reach 98.67 million this year.***
