Singapore Airlines share price dip 0.96% after full-year profit fell 47.5%
The profit plunge was due mainly to higher fuel prices and costs incurred in preparation for SilkAir’s merger with the parent airline.
Singapore Airlines (SIA) on Thursday said its net profit for the full financial year ended March 31 sank 47.5% to S$683 million, due mainly to higher fuel prices and costs incurred in preparation for SilkAir’s merger with the parent airline.
For the fiscal fourth quarter, the group posted a 28% fall in net profit to S$202.6 million, compared to S$281.1 million a year ago.
Despite the profit plunge, the group reported a record full-year revenue of S$16.3 billion, compared to S$15.8 billion a year ago, attributing the performance to its transformation initiatives. For the fourth quarter, the group reported a 1.4% increase in revenue to S$4.08 billion from S$4.02 billion a year ago.
Singapore Airlines share price
SIA’s shares slipped by 0.96% or S$0.09, to S$9.31 minutes into Friday’s trading. The group had posted its earnings results after trading hours on Thursday.
The decline in share price erased the gains the airline company had made this year. It started the year trading at S$9.38, rising to a peak of S$10.19 on February 25 but external conditions such as the United States (US)-China tariff war, the US’ tension with Iran, and volatility in oil prices spooked investors. On Thursday, SIA’s share price had closed at S$9.40.
Singapore Airlines earnings report highlights
SIA’s board has recommended a final dividend of 22 Singapore cents per share, which is lower than the 30 Singapore cents declared in the previous corresponding period.
The group’s operating profit for the full-year came in at S$1.07 billion.
Passenger load factor for the group’s carriers, which includes SIA, SilkAir and budget airline Scoot, rose to a record 83%.
Expenditure for the group rose by 7% or S$999 million, with higher net fuel costs accounting for two-thirds of the increase. Fuel expenditure had climbed 17.6%, or S$688 million, as jet fuel prices gained by an average 21.6% during the year.
Some other expenses came from the overhauling the fleet of its regional wing SilkAir, which is changing from Airbus to Boeing, and costs to restructure as SilkAir prepares to merge with into the parent airline.
Going forward, SIA said that most key markets, including those that have seen significant capacity growth such as the US, Japan, Indonesia and New Zealand, continue to grow at a healthy pace.
Meanwhile, China's international traffic growth rates have softened while the supply in the market increases.
The ongoing trade disputes and slowing economic growth in key markets pose uncertainty to the operating environment and efforts will be made to capture opportunities and mitigate weaknesses in both cargo and passenger segments, the airline company said.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets