GMF AeroAsia saw its full-year operating profit for 2019 slump, on the back of ballooning expenses.
The Garuda Indonesia subsidiary posted an operating profit of $15 million, down 47.1% year-on-year.
This was partly attributed to a higher increase in expenses — the MRO saw expenses rise 14.2% to $504 million. Material and subcontracting costs saw larger year-on-year increases.
Revenue for the year rose 10.5% to $519 million, led mainly by its repair and overhaul business.
Despite posting an operating profit for the year, GMF posted a net loss of $3.19 million, reversing 2018’s net profit of $11.1 million. The company did not comment on the matter.
GMF ended the year with less cash and cash equivalents — at about $27 million, compared to $39.1 million a year ago. The MRO states the decrease was due to the need to pay factoring liabilities due in 2019.
For the year, GMF maintained 430 airframes, most of which were Garuda’s. While it was a slight dip from 2018’s figures, the MRO notes that it took in more third-party business for the year for its airframe maintenance business.
On the engine front, GMF inducted 136 powerplants for the year, 9% higher than 2018. It also saw increase in the volume of work done in its component services business.
Line maintenance saw a 5% dip in work done, which GMF attributed to “capacity adjustments made” by airline customers.
Along with parent company Garuda Indonesia, GMF has had to restate its 2018 financial results, which saw a significant drop in its operating profit for that year.
Garuda was asked by Indonesia’s Financial Services Authority (OJK) to restate its 2018 results, following questions raised on non-compliance to accounting standards.
The MRO adds in its latest financial results: “[We] did not comply with certain financial covenants as specified in the factoring and bank loans agreements, among others, minimum debt service coverage and current ratios, and …suffered loss for the year of US$2,988,523.”
It has requested for a waiver from its creditors as a result.
In its outlook for the year, GMF adds that it was closely monitoring the coronavirus outbreak situation, stating that it “directly affects” its operational activities.
To this end, it is hoping to stem revenue loss by “adjusting sensitivity rates based on…flight hours for fixed-price line maintenance” with parent company Garuda. It is also looking to growing its pool of customers to increase its takings.
GMF will also request for credit restructuring and relaxation for bank loans in line with OJK’s recommendations.