SINGAPORE (Feb 13): Singapore Airlines (SIA) saw group earnings soar 61.6% to $286.1 million for the 3Q ended December, from $177.2 million a year ago.
The increase was due to a 12% increase in operating profit to $329.4 million in 3Q17/18, as well as the absence of a $79 million writedown of the Tigerair brand and trademark made a year ago.
Group revenue grew 6.0% to $4.08 billion in 3Q17/18, from $3.85 billion a year ago, on the back of revenue improvements in all business segments.
Passenger flown revenue was 4.2% higher, with a 6.9% traffic growth outpacing a 3.1% reduction in passenger yield.
Cargo revenue improved by $88 million as freight carriage growth of 4.4% was further supported by a 12.1% improvement in cargo yield.
Engineering services registered revenue growth of $8 million, or up 7.9%, largely attributable to line maintenance, and aircraft and component overhaul activities.
Group expenditure increased by 5.4% to $3.75 billion.
Net fuel cost rose by $82 million, or 9.2%, as average jet fuel prices were up 20.1%. The increase was partially offset by a hedging gain versus a loss last year. Ex-fuel costs were up $107 million, or 4.1%, partly attributable to the enlarged operations of SilkAir and Scoot.
As at end December, cash and cash equivalents stood at $2.39 billion.
Despite a stabilisation in yields in recent months, SIA says pressure on yields remains as competitors mount significant capacity in key markets with aggressive pricing.
In addition, the group says these challenging market conditions have been exacerbated by recent fuel price movements, which have been trending higher.
However, the group expresses confidence that it is well-positioned to meet the ongoing competitive challenges, on the back of its various key strategic initiatives and the strength of its portfolio of airlines.
SIA says its three-year transformation programme is well on track, with initiatives already bearing fruit in terms of enhancement of customer experience, revenue generation and improvements in operational efficiency.
Meanwhile, it adds that new initiatives are being actively explored, with significant investments being made to lift the group’s digital capabilities.
Shares of SIA closed 1 cent lower at $10.62 on Tuesday.
