Garuda Indonesia Reports Positive H1 2015 Results

Garuda Indonesia has reported a net profit of US$ 29.3 million for the first semester of 2015, an increase of 114.5% compared to the same period last year.

Garuda Indonesia also succeeded in increasing its operating revenue to US$ 1.84 billion, an increase of 4.7% from US$ 1.76 billion compared to the previous year; while operating expenses decreased by 11.6% from US$ 1.99 billion to US$ 1.76 billion.

In line with the ongoing network expansion program, Garuda Indonesia (including Citilink) successfully transported 15,900,961 passengers, an increase of 19.5% from a total of 13,307,351 passengers last year.

Garuda Indonesia transported 11,555,319 passengers (comprised of 9,432,349 domestic passengers and 2,122,979 international passengers), an increase of 15.3%, while Citilink managed to transport 4,345,642 passengers, an increase of 32% from 3,382,844 passengers last year.

Meanwhile, cargo reached 176,123 tons, decreased from 193,508 tons compared to last year.

The flight frequency of Garuda Indonesia, both the domestic and international routes, reached 122,446 flights, an increase of 13.8% compared to the same period last year. Meanwhile, the availability seat kilometers (ASK) increased by 7.2%, or 26.08 billion from 24,32 billion ASK in the second semester of 2014.

Similarly, Seat Load Factor/SLF in the first semester of 2015 improved to 75.8% compared to 69% in the same period of last year. On Time Performance (OTP) reached 89.7%, while aircraft utilisation reached 09:12 hour.

The airline also successfully increased its domestic and international market share. In H1 2015 Garuda Indonesia commanded 44% of domestic market share, a noticeable increase from 37% last year. International market share has also increased to 28% from 21% in the same period of 2014.

Up to June 2015, Garuda Indonesia operates a total of 180 aircraft (Garuda Indonesia and Citilink) consisting of Boeing 777-300ER (7), Airbus 330-200/300 (22), Boeing 747-400 (2), Airbus 320 (35), Boeing 737-500/800NG (89), Bombardier CRJ1000 NextGen (15), and ATR 72-600 (10) with an average fleet age of 4.8 years.

By the end of 2015, Garuda Indonesia will operate a total of 190 aircraft with an average fleet age of 4.3 years.

In an anticipation of the weakening Indonesian Rupiah to US Dollar, in the first quarter of 2015, Garuda Indonesia has signed a “Cross Currency Swap” agreement with various banks in order to protect any transaction in the amount of IDR 2 trillion.

The "Cross Currency Swap" is an effort to avoid or limit the dramatic increase of the operational expenses as a consequence of the weakening of the Rupiah to US$, as most of the operational expenses paid are in US$, such as spare parts purchasing, maintenance, and aircraft lease.

Further, as a resolve to lock-in new funding at an attractive cost and more competitive cost financing, since May 2015, Garuda Indonesia had priced a US$ 500 million 5-year Sukuk offering with a coupon of 5.95%. This US$ 500 million Sukuk offering by Garuda Indonesia was the first un-rated Global Sukuk in US$ denomination issued by one corporation in Asia Pacific, with the total amount of order reaching 4 times from the target. Through this exercise, Garuda Indonesia has successfully re-profiled and extended maturity of its debt schedule.

The offering was structured as a Wakala Sukuk based on Rights to Travel using an orphan-based SPV, with Garuda Indonesia Global Sukuk Limited as the issuer. This is the first non-sovereign US$ Sukuk out of Indonesia – paving the way for other Indonesian SOEs and corporates to tap this market. Garuda’ Indonesia's Sukuk offering was done without any government or financial institution guarantee, making it the first Asia Pacific national flag carrier to successfully issue a US$ benchmark bond on a standalone basis.