GMF Aeroasia has posted a $31 million loss for the first three months of the year, compared with a $3 million profit in the prior-year period.
Hit by Covid-19 disruption to its airline customers, especially former parent Garuda Indonesia, the listed Indonesian maintenance company saw revenues fall and its cash decline to just $3 million from $30 million at the start of the year.
The result is somewhat surprising given that in March, approaching the end of the quarter, the company was reporting higher demand from third-party customers because some airlines had been unable to land in China for scheduled maintenance.
Evidently, though, this was not sufficient to offset the huge dip in business from its main customer, which accounts for almost 90% of GMF’s sales.
The MRO provider’s deteriorating finances have pushed GMF into breach of certain financial covenants and forced it to request a waiver from creditors and a restructure of its bank loans.
Management said it is also seeking “payment relaxation” with the MRO provider’s suppliers and an adjustment of its flight-hour-based line maintenance agreements with Garuda.
“The Group’s ability to maintain its business as a going concern and to face external challenges depends on the Group’s ability to generate sufficient cash flow, including from the collection of trade receivables and gross receivables from airlines customers, to meet its liabilities on a timely basis and to comply with the terms and conditions of the loans, as well as the Group’s ability to improve its operations, performance and financial position,” stated GMF Aeroasia.
GMF’s main base is at Soekarno-Hatta International Airport near Jakarta. It comprises a 67,000m2 narrowbody maintenance hangar, the largest in the world, as well as a 22,000m2 widebody maintenance hangar, a 23,000m2 light maintenance hangar, and another 23,000m2 hangar with A330 maintenance facilities.
The company is also building a facility on the island of Batam, just a short hop from Singapore, where the region’s current dominant MRO player, ST Aerospace, is based.
