JAKARTA: Indonesian flagship airline PT Garuda Indonesia Tbk swung to a net profit in the first half of 2015 from a loss a year earlier, sending its shares up more than 7 percent on Wednesday.
Garuda also signed an agreement worth around $600 million with aircraft engine supplier GE Aviation, a unit of US conglomerate General Electric Co, to equip 50 planes that it recently ordered.
Garuda shares jumped as much as 7.3 percent to their highest in more than a month, outperforming the broader Jakarta stock exchange index which was nearly 1 percent higher.
The airline posted a net profit of $27.7 million for the six months ended June compared to a restated $203 million loss a year ago, it said in an announcement published by newspaper Bisnis Indonesia on Wednesday.
Garuda made a profit of $16.3 million for the April-June quarter, higher than the $11.4 million profit it booked in the previous quarter, according to Reuters calculation.
The airline's performance was lifted by cost reductions as well as fuel and currency hedging, Garuda officials said on Wednesday.
Garuda has done a "network restructuring" by focusing on more profitable routes, chief executive Arif Wibowo told reporters.
It had also hedged 45 percent of its fuel needs and is aiming to gradually raise that level to at least 50 percent this year, compared to about 10 percent last year, Wibowo said. Oil prices have fallen about 20 percent since May on concerns over global oversupply.
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