Garuda Indonesia Racks Up $2.4bn Loss

Garuda Indonesia posted a net loss of $2.4 billion in 2020, with its auditor raising concerns over the continuity of the Southeast Asian country's flagship airline, Nikkei Asia reported. The net loss is Garuda's biggest since at least 2005, the oldest available data on Quick-Factset, and marks a staggering increase from the $38.9 million loss it reported the previous year. The figures, posted to the Indonesian Stock Exchange late Friday, further highlight the dire situation the company faces. Sales were down 68% compared with 2019, while group current liabilities exceed current assets by $3.8 billon, posing a serious problem for Garuda to meet its short-term financial obligations. It also had negative equity of $1.9 billion, meaning total liabilities exceed total assets. It also had negative cash flow -- spending more money than it made -- of $96.5 million in 2020. In a further blow, Garuda's auditor PwC assigned a "no opinion" on the financial results -- given when an auditor cannot judge whether a company's accounts have been properly created -- which would further undermine investor confidence in the carrier. Garuda shares have remained suspended from trading since June 18, after the company defaulted on coupon payments of $500 million on an Islamic bond. Read more.