Govt to Evaluate Garuda's Finance

Jakarta (Antara Bali) - The government is evaluating the financial performance of Garuda Indonesia, following a slump in its net profit recorded last year, stated State Enterprises Minister Dahlan Iskan.

"We are evaluating why the financial performance has plunged," he noted while inspecting a slaughterhouse at the Gandasari village in the Bekasi district, West Java, on Wednesday.

Dahlan had forecast that the financial performance of the national flag carrier will decline due to the rupiah's depreciation against the US dollar.

"It has come to my notice that they (Garuda) are seeking to raise fuel surcharges as a result of the US dollar's appreciation, coupled with a rise in the price of aviation turbine (avtur) fuel," he reported.

He has also given his consent to the management of Garuda Indonesia to find ways of resolving the slump in the company's financial performance.

On Monday, Garuda Indonesia announced that its net profit had sharply dropped by 89.89 percent to reach US$11.2 million in 2013, down from US$110.8 million recorded in 2012.

Meanwhile, its operating profit also nosedived by 66.4 percent to reach US$56.4 million, down from US$168.1 million reported in 2012.

"Garuda Indonesia's financial performance in 2013 was affected by the rupiah's depreciation and high price of fuel," claimed Garuda Indonesia President Director Emirsyah Satar.

He remarked that apart from these two factors, Garuda has also invested heavily in 2013 to purchase aircraft in order to support the development of its subsidiary, Citilink, as a low-cost carrier.

"The company's income was a bit different when calculated in the US dollar term. As the rupiah has depreciated, our income in the US dollar has been affected by it. However, in the rupiah term, our income is quite good," he noted.

"Sixty percent of Garuda Indonesia's operating cost is in the US dollar, while the remaining 40 percent is in the rupiah. Fifty percent of its income is in the US dollar and the balance 50 percent is in the rupiah," he reported. (*/DWA)