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Indonesian airline Garuda swings to profit in H1, shares jump
[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 per cent on Wednesday.
Garuda also signed an agreement worth around US$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 per cent 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 US$27.7 million for the six months ended June compared to a restated US$203 million loss a year ago, it said in an announcement published by newspaper Bisnis Indonesia on Wednesday.
Garuda made a profit of US$16.3 million for the April-June quarter, higher than the US$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 per cent of its fuel needs and is aiming to gradually raise that level to at least 50 per cent this year, compared to about 10 per cent last year, Wibowo said.
Oil prices have fallen about 20 per cent since May on concerns over global oversupply.