SINGAPORE Airlines (SIA) : C6L 0% on Wednesday (May 15) posted a 0.3 per cent increase in net profit to S$1.2 billion for the half year ended Mar 31, 2024.
Revenue rose 5.3 per cent to a record high of S$9.9 billion, from S$9.4 billion over the same period a year earlier.
The board has recommended a final dividend of S$0.38 per share for FY24, up from S$0.28 per share that was declared a year earlier.
SIA said the rise in revenue was driven by a 10.1 per cent increase in passenger flown revenue on a 17.5 per cent gain in traffic.
However, the group’s passenger yields declined 6 per cent on intensifying competition as other airlines progressively restored capacity.
The rise in passenger flown revenue was also offset by a 29.7 per cent fall in cargo revenue as yields dropped 35.9 per cent due to a recovery in bellyhold cargo capacity.
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Meanwhile, SIA’s expenditure grew 9.8 per cent to S$776 million, due to a S$496 million increase in non-fuel expenditure and a S$280 million increase in net fuel costs.
The company noted that net fuel costs rose due to higher volume uplifted as well as lower fuel hedging gain, which was offset by a drop in fuel prices.
For the full year, SIA posted a 24 per cent year-on-year increase in net profit to a record high of S$2.7 billion, while revenue climbed 7 per cent to S$19 billion.
On Wednesday, the company also announced that it intends to redeem all remaining mandatory convertible bonds (MCBs) that were issued in June 2021. With the move, the company would have fully redeemed the S$9.7 billion of MCBs that it issued in 2020 and 2021.
“The accreted principal amount payable, being 112.616 per cent of the principal amount of the MCBs, will be S$1,744.6 million,” the company said, adding that the redemption amount will be paid to eligible bondholders on Jun 24.
For the year ahead, the company said it has begun operating the Embraer E190-E2 aircraft with flights to Krabi, Thailand.
“The aircraft will operate to existing destinations such as Hat Yai, Miri and Kuantan, as well as two new points – Koh Samui (in May 2024) and Sibu (in June 2024).
“Operating the aircraft on thinner routes to non-metro destinations in the Asia-Pacific allows the group to unlock significant growth opportunities in the region,” it said.
In a separate bourse filing on Wednesday, the company also noted that demand for air travel remained robust in its April 2024 operating results.
The group’s passenger traffic grew 11.9 per cent year on year for the month, while passenger capacity increased 13.2 per cent over the same period.
However, the group’s passenger load factor fell 1.1 percentage points to 87.2 per cent, from 88.3 per cent a year earlier.
As for the group’s cargo business, cargo loads increased 26.4 per cent year on year, which outpaced capacity expansion of 9.4 per cent over the same period. Cargo load factor came in at 58.6 per cent, rising 7.9 percentage points from a year earlier. The company attributed this to demand spillover from security concerns in the Red Sea.
SIA added that it had commenced four-times weekly passenger flights to Brussels since Apr 5, which have increased the number of European destinations in the group’s passenger network to 15.
SIA shares fell 0.4 per cent or S$0.03 to S$6.81 on Wednesday, before the results were released.
