SINGAPORE – A better performance by associates and joint ventures (JVs) led Singapore Airlines (SIA) to post a 10.9 per cent increase in net profit for the third quarter to $315 million from S$284 million a year ago, the national carrier reported on Friday (Feb 14).
Group revenue for the quarter rose 3 per cent to register a record high of $4.5 billion on the back of initiatives from its three-year transformation plan yielding results as well as strong growth in passenger revenue.
Despite demand for services to China taking a hit as a result of the coronavirus outbreak, the group believes that the transformation programme has strengthened its revenue generating capabilities and has driven operational efficiencies to weather the current challenges.
“Amidst this challenging environment, the SIA group will continue to be proactive and nimble in making appropriate network adjustments and managing costs tightly,” the group said.
Meanwhile, the group is also expecting volatility in fuel prices to persist but said that its hedging policy will provide stability to net fuel costs.
Passenger revenue grew by 7 per cent boosted by robust traffic growth. Cargo revenue, on the other hand, declined $112 million as a result of weak cargo demand amid trade uncertainties and an export manufacturing slowdown in Europe and Asia.
Group expenditure increased 1.7 per cent to $4 billion as a result of higher non-fuel expenditure. Non-fuel expenditure rose 4.2 per cent on capacity increase and higher traffic, which was partially offset by lower net fuel cost primarily due to a decrease in average jet fuel price post-hedging.
Operating performance across the companies in the group remained stable with better showing from the parent airline firm and Scoot.
Operating profit for the parent airline company rose 11.9 per cent to $413 million year-on-year due to growth in passenger revenue.
SilkAir recorded an operating profit of $7 million, flat against last year as capacity fell 8.2 per cent due to the grounding of the 737 MAX 8 fleet as well as the progressive transfer of routes to Scoot.
Scoot reaped an operating profit of $4 million, up S$3 million a year ago, supported by higher passenger traffic.
SIA Engineering's operating profit stood at $16 million year-on-year with a 1.5 per cent decline in revenue mainly attributable to reduction in airframe and line maintenance revenue.
The group reported an earnings per share of 26.6 Singapore cents versus 24 cents a year ago. No dividend was declared for the period.
SIA shares advanced three Singapore cents or 0.35 per cent to finish at $8.62 on Friday.