Binsis Fundamental Claimed To Be Solid, Analysts Estimates Garuda Indonesia's Performance Will Grow

Garuda Indonesia (Photo: Doc. Antara)

JAKARTA - PT Garuda Indonesia (Persero) Tbk (GIAA) managed to record a profit in 2023. For this achievement, Garuda Indonesia's performance is projected to be more prospective in the future. This projection is based on indicators of financial performance and operations that grow positively.

Sinar Mas Sekuritas analyst, Isfhan Helmy said that in the midst of recording the implementation of the EBITDA position on an annual basis or year on year (yoy) as well as steps to improve the equity that is currently being carried out.

"GIAA has succeeded in increasing efficiency as reflected in reducing non-fuel costs," he said in an official statement, Friday, April 5.

On the other hand, according to Isfhan, Garuda Indonesia also managed to reduce the cost of G&A to 25 percent during 2023 to 177 million US dollars, while maintenance costs also fell slightly by 5 percent to 387 million US dollars in 2023. Where the biggest decline in G&A is the cost of professional services which fell 86 percent to 15 million dollars in 2023.

"EBITDA surpassed our expectations at the 105 percent run-rate of USD 310 million compared to our expectations of USD 295 million," he said.

Although total revenue is slightly lower than our expectations of 98 percent or 2.9 billion US dollars, large savings occurred in non-fuel costs which fell by 5 percent yoy and only reached 93 percent of expectations.

Meanwhile, Isfhan said the post-pandemic aircraft rental scheme was also profitable because aircraft financing was calculated based on flight hours.

"This is certainly very profitable for Garuda Indonesia, because the EBIT FY23 is 310 million US dollars, five times compared to the 2019 EBIT which is only 63 million US dollars. This was achieved in extraordinary terms of only half of the number of fleets before the pandemic," he said.

According to Isfhan, this year's increase in Garuda Indonesia's financial figures will bring a new catalyst.

With the current EV/EBITDAR multiples of 1.3 times. This figure is far below similar airlines in areas with complete services such as Singapore Airlines, which currently operates close to 2.5 times EV/EBITDAR," he concluded.

Profitability According To Path

Meanwhile, Kiwoom Sekuritas analyst Vicky Rosalinda said Garuda Indonesia was already on the track to achieve profitability. By 2024, Garuda's profit is predicted to be USD 580 million this year.

"Income is estimated to have increased by 40 percent to 4.2 billion US dollars. We recommend investors to wait and see Garuda shares," he said.

On the other hand, he emphasized, the momentum of Eid 2024 is expected to increase Garuda's income. This is also used by the company by preparing additional seats and also discounts during the Eid holiday.

According to Vicky, Garuda will maximize all its potential to spur revenue this year.

"The company also said operational improvements could help generate profits, although they were considered insignificant," Vicky said.

Business Interests And National Interests Are Balanced

Meanwhile, aviation observer Gatot Rahardjo said with the current number of fleets, Garuda Indonesia was on the right track because management managed to balance the business interests and interests of the country as a state-owned airline, connecting the air in the country.

The Garuda group is just adjusting the need for maximum use of aircraft through a fleet that is slowly starting to grow this year. I think Garuda can sort out which routes are important and profitable for the company. This importance and benefits must of course be sorted again which really provides great financial results and benefits for Garuda," he said.

Gatot added that Garuda can now collaborate better with Citilink as a subsidiary, both for business development and carrying out state duties through the availability of existing fleets.

"If later Garuda, Citilink and Pelita are combined while maintaining their respective AOCs, of course, it will also be better because they will be able to cooperate and be more efficient in the company's operations," concluded Gatot.

The 2023 performance year, Garuda Indonesia on a consolidated basis scored 40 percent revenue growth to 2.94 billion US dollars from the previous year 2.1 billion US dollars. This is one indicator that Garuda's business performance restructuring step continues on track.

After going through a challenging phase in the pandemic era several years ago by carrying out various improvement steps, Garuda managed to record a profit for the year of 252 million US dollars. This further strengthens Garuda's fundamentals after completing the final restructuring of 2022.

In terms of balance sheet, Garuda's short-term liabilities fell 31 percent from 2022 to USD 1.7 billion to USD 1.2 billion. This is an important indicator in describing the solidity of financial performance restructuring, especially related to the value of operating debt in the current year of performance.

Garuda's operational performance is also solid. Throughout 2023, Garuda Indonesia Group posted a growth in the number of passengers by 34 percent to 19.9 million, compared to 2022 with 14.8 million. In detail, Garuda transported 8,291,094 passengers and Citilink as many as 11,678,930 passengers," he said.