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SINGAPORE: National carrier Singapore Airlines (SIA) said on Tuesday (Nov 7) that its second-quarter net profit nearly tripled from the same period last year, but warned that headwinds remain from intense competition in key markets.
Net profit for its fiscal second-quarter ended September rose 192 per cent year-on-year to S$190 million, led largely by stronger operating results, SIA said in a stock exchange filling after trading closed.
Operating profit for the second quarter rose 113 per cent to S$232 million, as a S$195 million improvement in revenue surpassed a S$72 million increase in expenditure.
The companies in the group recorded mixed results: The parent airline company and SIA Cargo posted earnings growth, while Scoot and SilkAir recorded weaker earnings as they continued to invest for expansion.
Operating profit for the parent airline company more than doubled year-on-year to S$170 million in the second quarter, in part due to higher passenger flown revenue from a 2.3-per-cent increase in passenger traffic. This, however, was offset by a 2 per cent reduction in passenger yield.
SIA Cargo reported an operating profit of S$26 million, reversing its loss of S$11 million in the same quarter last year.
US$850 million (S$1.16 billion) makeover of its Airbus A380s in what analysts called a “necessary” and “worthwhile” step to take amid cut-throat competition.
Both SIA and Hong Kong-based rival Cathay Pacific Airways have come under pressure due to growing competition from Chinese and Middle Eastern rivals. Both also lack domestic flight markets to help offset the international competition.
SIA is undertaking a three-year transformation plan of wide-ranging initiatives aimed at helping it reclaim market leadership, after announcing a surprise loss for the fourth quarter in May.
In July, SIA reported an 8.6 per cent drop in net profit for its fiscal first quarter, attributing it to the absence of a one-off gain from SIA Engineering last year.
“The group’s three-year transformation programme is progressing on track, with the first wave of initiatives, each with detailed action plans, underway. The group is identifying new opportunities for revenue generation, re-structuring of its cost base and enhancement of organisational effectiveness under the programme,” SIA said.
The company has declared an interim dividend of 10 cents per share.
SIA shares fell 0.7 per cent to close at S$10.32 on Tuesday, before the release of its financial results.
Read more at http://www.channelnewsasia.com/news...rofit-nearly-triples-to-s-190-million-9384148
