State-owned railway operator PT Kereta Api Indonesia (KAI) posted a Rp 2.4 trillion (US$163.6 million) loss between January and September, a drastic turn-around from the Rp 1.5 trillion profit booked during the same period last year, as the COVID-19 pandemic continues to put pressure on travel demand.
Its revenue also fell by 31.4 percent year-on-year (yoy) to Rp 12.2 trillion as of September, KAI’s financial report submitted with the Indonesian Stock Exchange (IDX) website shows.
According to the financial report, the ongoing health crisis has created uncertainties that continue to affect the company.
“While the disruption is expected to be temporary, there is relatively high uncertainty over the scope of [the pandemic’s] impact on the company’s operational and financial performance. Currently, one of the significant impacts is a dwindling number of passenger volumes, as reflected on the decreasing passenger revenue,” the statement reads.
Of the total, the company’s revenue from passenger services fell steeply by 67.6 percent yoy to Rp 2.3 trillion in the first nine months of the year.
KAI shut down all of its long-distance and local passenger train services in April following the government's ban on the Idul Fitri mudik (exodus), and partially restarted its operations on June 12. The closures have caused a 43.6 percent yoy decline in passenger numbers during the first half of 2020 to 118.6 million people, according to Transportation Ministry data.
However, KAI spokesperson Joni Martinus told The Jakarta Post on Oct. 28 that there were signs of improvement in the company’s passenger numbers and the logistics services in the third quarter.
The company recorded 35.7 million passengers in the third quarter, an around 75 percent increase from the second quarter’s figure of 20.4 million, as the economy started to return to normal, according to Joni.
Meanwhile, KAI’s logistics services also carried 11.5 million tons of goods between July and September, a 16 percent quarterly increase from the second quarter.
“Train passengers numbers are starting to show signs of a slow but steady recovery,” he said via text message.
However, despite the quarterly increase in logistics volume, the company’s financial statement showed that KAI saw a 5.8 percent decrease yoy in revenue from the service as of September to Rp 4.79 trillion.
In order to improve the company’s balance sheet, Joni said KAI was working to secure its liquidity and ramp up cost reduction efforts.
“We are currently implementing cost efficiency measures in all areas, primarily in our operations. As of today, we could cut our annual expenditure by 30 to 40 percent from our efforts,” he said.
The company’s expenditure decreased some 6 percent yoy to reach Rp 12.1 trillion in the first nine months of 2020, the financial report shows.
Despite efforts to slash expenses, the company is not planning to lay off workers or cut wages, according to Joni.
He added that the company was also aiming to increase its revenue from logistics services by maximizing its operational structure, seeking new partnerships and looking for new potential routes.
“We will maximize our logistics line while demand for passenger services is slowly improving. We will also align our passenger service operations with public demand,” he said.
In early October, Transportation Minister Budi Karya Sumadi inaugurated the southern Java double-track railway network for partial service. Some 550 kilometers of the railway network, connecting Cirebon and Jombang, East Java, are ready to use.
The network will increase connectivity for both passengers and goods between Cirebon, West Java, and East Java’s capital of Surabaya.
“With the completion of the southern Java double-track railway, we will connect three big city agglomerations, namely Greater Jakarta, Joglosemar [Yogyakarta, Surakarta and Semarang] and Gerbangkertosusila [the Surabaya Metropolitan area],” Budi said in a statement at the time.
