GMF AeroAsia slipped into the red for the first quarter of the year, on the back of higher expenses and falling revenue amid the coronavirus outbreak.
For the quarter ended 31 March, the MRO unit of Garuda Indonesia posted an operating loss of $32.4 million, reversing the $8.29 million profit it made the same period in 2019.
Expenses rose nearly 25% year-on-year to about $140 million, led by increases in employee and subcontracting expenses. Revenue for the period dipped 10.8% to $107 million.
The company also recorded a net loss of $31.2 million for the period.
GMF ended the quarter with significantly lower cash and cash equivalents than at the start of the year — $3.2 million, compared to nearly $27 million as at 1 January.
The company flagged cash flow — amid the impact from the coronavirus outbreak — as a key concern going forward.
“The group’s ability to maintain its business as a going concern and to face external challenges depends on [its] ability to generate sufficient cash flow, including from the collection of trade receivables and gross receivables from airline customers, to meet its liabilities on a timely basis and to comply with the terms and conditions of the loans, as well as [its] ability to improve its operations, performance and financial position,” it states.
GMF, in an earlier earnings guidance, had warned of a significant revenue loss — to the tune of between 25 and 50% — for the period, with a 75% year-on-year fall in net profit for the period.
It added that the outbreak has affected line maintenance work both inside and outside of Indonesia because of reduced flight activity. GMF has also had to cut back on repair and overhaul work, as part of pandemic prevention measures.