Virus Shock Sparks Profit Warnings From Indonesian Firms

(Bloomberg) -- Indonesian companies from airlines to builders of luxury condominiums and cement makers are warning investors of plunging revenue and profit as the coronavirus pandemic ravages Southeast Asia’s largest economy.

While national carrier PT Garuda Indonesia and PT AirAsia Indonesia are hit by a ban on domestic travel and large scale social distancing rules, property developers are reporting declines in their sales as buyers turn more cautious. The pandemic has shattered businesses from retail to tourism and automobiles, with Indonesia’s economic growth now forecast to halve to 2.3% from a year earlier and even contract 0.4% in a worst-case scenario.

Here’s a round of profit and revenue warning from Indonesian companies:

Garuda Indonesia

The flag carrier expects operational income to slump about 33% in the first quarter as it grapples with a decline in volume of passengers. The airline reported a 22% drop in passenger traffic in the January-March period. Garuda is in the middle of talks to restructure $500 million sukuk and is counting on a credit line from the government to tide over what it calls the “extremely challenging environment for airlines.”

AirAsia Indonesia

The low-cost carrier, part of Malaysian tycoon Tony Fernandes’ AirAsia Group Bhd, may see its first-quarter net income plunge more than 75%, it said in an exchange filing. Its revenue may fall 25%-50%, hurting the airlines’ ability to repay debt. The carrier doesn’t plan to renew expiring aircraft leases and is renegotiating terms with lessors for lower rental.

Agung Podomoro Land

The builder of high-end condominiums and shopping malls forecasts its net income and revenue to decline 51%-75% in the first quarter as partial lockdowns in major Indonesian cities hit operations. The pandemic will also impact 135-billion rupiah ($9.3 million) in short-term interest liability, it said.

Adhi Karya

The state-owned builder expects the first-quarter net income to fall more than 75% and revenue to slide less than 25%. Operational restrictions due to the Covid-19 outbreak will affect the company’s ability to repay 4 trillion rupiah in short-term principal debt. The company is proposing a rollover of bank cash and non-cash loans that will mature during the pandemic period, it said.

Graha Layar Prima

The operator of South Korean movie theater chain CGV Movies in Indonesia, said its net income may tumble more than 75% in the first quarter with revenue expected to decline as much as 25%. The company has negotiated lease with property owners, cut operational costs and developed a digital platform to cope with the current situation.

PT PP

The state construction firm says first-quarter consolidated revenue may decline 25%-50% while net income is forecast to dive more than 75%. The pandemic-triggered shutdown of some of projects may impact its ability to pay the principal of 1.63 trillion rupiah short-term debt.

Indocement Tunggal Prakarsa

The cement maker, a unit of conglomerate Salim Group, has shuttered majority of its 10 plants in Citeureup area as a result of the partial lockdown. The suspension will slash its first-quarter revenue less than 25%, it said in a filing.

Bank Rakyat Indonesia

The country’s largest lender by assets has cut this year’s loan growth estimate to 5% from previous target of 10%-11%. It sees net interest margin shrinking to 5.5% from previous guidance of 7%.

Timah

The tin producer sees revenue and net income sliding by 51%-75% in the first quarter and is carrying out efficiency measures in operations to minimize the impact of coronavirus.

Ace Hardware Indonesia

The household products retailer, which was forced to close dozens of its outlets, forecasts net income and revenue each dropping less than 25% in the first quarter. It has since intensified online sales and stepped up promotion of goods for curbing infections.

Gudang Garam

The cigarette maker is seeing lower sales volume as the pandemic weakens people’s purchasing power. It expects sales to fall sharply from April through May, it said in a filing.

Waskita Karya

The state builder sees consolidated revenue falling 25%-50% in the first quarter as the outbreak hampers some projects. The company is working to accelerate the progress of other projects to meet its revenue target.

Wijaya Karya

The state construction company forecasts net income and revenue may be 25%-50% lower in the first quarter from a year ago. It has suspended operations in 13% of its 208 existing projects due to the pandemic, while 23% of projects are reporting a slowdown in operations due to the implementation of physical distancing.

Jasa Marga

The state toll road operator is now carrying out limited operations, which it says could lead to a 25%-50% drop in first quarter net income and revenue to slump as much as 25%.

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