Singapore Airlines' net profit surges 47%

GMT 16:15 2015 Thursday ,14 May

Arab Today, arab today Singapore Airlines' net profit surges 47%

Singapore Airlines
Singapore - AFP

Singapore Airlines said Thursday its fourth quarter net profit surged 47 percent year-on-year as its fuel bill declined, but warned of a tough outlook due to stiff competition.

Net profit in the three months to March 31 rose to Sg$39.6 million ($30.05 million) from Sg$27.0 million in the same period a year ago on revenue of Sg$3.88 billion, up from Sg$3.63 billion.

For the full year to March, net profit jumped 2.34 percent to Sg$367.9 million from Sg$359.5 million, the airline, known as SIA, said in a filing to the Singapore Exchange.

Full-year revenue was Sg$15.57 billion, up 2.1 percent from Sg$15.24 billion.

Fourth quarter performance was boosted due to reduced operating expenditure from lower fuel prices, and improved passenger yields that benefited from "stringent inventory control", SIA said.

Fuel costs, which account for over a third of expenditures, fell to Sg$1.29 billion from Sg$1.38 billion during the quarter.

World oil prices have fallen sharply since June last year due to a global supply glut.

SIA said full-year profits were dragged down by "weaker share of results from joint venture and associated companies".

SIA currently owns 55.8 percent of Tiger Airways after it annexed the struggling budget carrier last year.

For the full year to March, Tiger's losses widened to Sg$264.2 million from Sg$223 million a year ago, the airline reported separately on May 4.

SIA said the outlook remains tough.

"Market conditions remain challenging amid an uncertain global economic outlook. Demand in key markets is soft, primarily on Americas and European routes," it said.

"Competition remains intense as other airlines continue to inject capacity with aggressive pricing," the airline added.

The airline, Asia's third-largest carrier by market value according to Bloomberg News, said the depreciation of "key revenue-generating currencies" such as the Australian dollar, Japanese yen and the euro will "place further pressure on yield and demand".

A strengthening US dollar will increase operating costs, it said.

Despite an improving performance from its freight arm, SIA Cargo, the airline said "cargo yields are expected to remain under pressure due to excess capacity in the market".

The airline said its subsidiaries SilkAir, Scoot and Tiger Airways will add new routes this year, which will see its network expand to 119 destinations from the current 116, across 35 countries.

SIA currently has 105 passenger aircraft including 19 Airbus A380 superjumbos.

SIA shares fell 0.26 percent to Sg$11.64 ahead of the release of the earnings report. The Straits Times Index rose 0.8 percent to 3,455.78.

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