SIA posts record $1.44 billion net profit for first half

SINGAPORE – Geopolitical tensions, elevated fuel prices and softer economic conditions did little to prevent Singapore Airlines from posting record first-half earnings.

Boosted by strong travel demand, the carrier group booked a record $1.44 billion net profit for the half year to end-September, up 55 per cent from $927 million for the same six months a year ago. Operating profit came in at a record $1.55 billion, a 26 per cent jump.

Revenue was up 9 per cent to $9.16 billion.

The company declared an interim dividend of 10 cents, amounting to $297 million in total payout.

As of Sept 30, the group shareholders’ equity stood at $17.3 billion, a decline of $2.5 billion from March 31. This comes after half of the $3.4 billion of mandatory convertible bonds (MCBs) that were issued in June 2021 were redeemed in June 2023. The redemption saw SIA’s cash balance decrease by $2.8 billion to $13.5 billion.

The latest half-year results were underscored by strong operating numbers.

SIA, together with its low-cost unit Scoot, carried 17.4 million passengers in the April-September 2023 period, an increase of 52.3 per cent year on year.

Passenger traffic rose 38 per cent from a year before, outpacing the capacity expansion of 29 per cent, and boosting the group passenger load factor (PLF) – which essentially measures the percentage of seats occupied fleet-wide – by some 5.8 percentage points to a record half-yearly figure of 88.8 per cent.

The only discernible “soft” area for SIA was cargo. Its cargo load factor fell 8.4 percentage points to 52.7 per cent year on year as cargo loads dipped 6 per cent against capacity growth of 8.9 per cent. That said, the cargo performance was still stronger than the years immediately prior to the pandemic.

SIA expects the demand for air travel to remain healthy through the first quarter of 2024, prompting the group to rapidly expand its network services.

During the July-September quarter, SIA reinstated services to Busan, South Korea; and Scoot resumed flights to Jinan, Nanchang, and Shenzhen in China. Besides taking over the Shenzhen route from Scoot this month, SIA is ramping up flight frequencies to Guangzhou. Meanwhile, Scoot will resume operations to Chinese cities Kunming and Changsha from November 2023.

With these, SIA and Scoot will serve 23 destinations in China, compared with 25 in the pre-pandemic period.

Services are also being ramped up to Hong Kong, Melbourne, Sydney, Frankfurt, Cairns, Male, and Barcelona. SIA will also launch four weekly direct flights between Singapore and Brussels in April 2024.