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SIA’s 2HFY2024 earnings up just 0.3% y-o-y; ends full year at a record

Singapore Airlines group has reported record earnings of $2.68 billion for its FY2023/2024, translating to an EPS of 61.4 cents.

Singapore Airlines (SIA) group has reported earnings of $1.2 billion for its 2HFY2024 ended March, up just 0.3% y-o-y. Revenue in the same period was up 5.3% y-o-y to $9.85 billion, as air travel demand, while still growing, eased off somewhat amid more competition.

For the full year, the flag carrier was able to report record earnings of $2.68 billion for its FY2024, up 24% y-o-y, with some lift from one-offs amid a sustained recovery of the industry. Excluding the exceptional items, SIA’s operating profit for the year was up just 1.3% to $2.73 billion.

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This translates to an earnings per share (EPS) of 61.4 cents, up from 35.1 cents.

Revenue in the same period was similarly a record of $19 billion, up 7% y-o-y, with passenger revenue up 17.3% y-o-y to $15.7 billion. However, in a sign of a tougher operating environment, passenger yield was down 7.6%.

Throughout the year, SIA and low-cost unit Scoot carried a combined 36.4 million passengers, 37.6% higher y-o-y. Passenger load factor (PLF) improvement by  2.6 percentage points to a record 88.0%. Both SIA and Scoot delivered record PLFs of 87.1% and 91.2% respectively.

Revenue per available seat kilometre (RASK) dipped slightly to 9.6 cents, 4.0% lower y-o-y than FY2022/2023’s record 10.0 cents.

On the other hand, cargo-flown revenue was down 41.2% y-o-y to just $2.1 billion. Yet, cargo loads inched up slightly by 1.7% thanks to strong demand from the e-commerce segment. Cargo yields were 42.2% lower y-o-y, although still 29.8% above pre-pandemic levels.

For the period, the group’s total expenditure grew by 8.0% y-o-y to $16.3 billion, especially from non-fuel expenditure, which increased by 13.5% y-o-y to $1.34 billion. Fuel cost, however, dropped 2.5% in line with lower fuel prices.

As at March 31, cash and cash equivalents stood at $11.27 billion, from $16.33 billion in FY2022/2023.

With this, the group has recommended a final dividend per share of 38 cents, bringing full-year payout to 48 cents. In contrast, SIA paid a total of 38 cents for the previous year.

The group has also announced its intention to redeem all remaining mandatory convertible bonds (MCBs) that were issued in June 2021. The accreted principal amount payable, being 112.616% of the principal amount of the MCBs, will be $1.74 billion. The redemption amount will be paid to eligible bondholders on June 24.

With this, SIA would have fully redeemed the $9.7 billion of MCBs that were issued in 2020 and 2021, as part of the $15 billion rescue package mounted by the government to keep the airline afloat with the pandemic in full swing.

In its outlook statement, the group notes that the demand for air travel remains healthy in 1QFY2024/25, supported by a strong pick up in forward bookings to North Asia and Southeast Asia (SEA), although the airline industry continues to “face challenges including rising geopolitical tensions, an uncertain macroeconomic climate, supply chain constraints, and high inflation” across the globe.

“The SIA group is well-positioned to seize emerging growth opportunities and navigate uncertainties thanks to its strong foundations and long-term strategic initiatives,” says the group.

Shares in SIA closed at three cents lower or 0.44% down at $6.81 on May 15.

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