Hot stock: Tiger Airways gains ground on profitable Q3 FY2015 results

SHARES in Tiger Airways gained five Singapore cents to trade at 31 cents Monday morning as the budget carrier unveiled profitable third-quarter results.

At around noon, it was the most heavily traded stock by volume with some 76.46 million shares changing hands.

In a testament to recent efforts to turn around its operations, Tiger swung into the black for the three months ended Dec 31, 2014, with a net profit of S$2.19 million. In the corresponding quarter a year ago, the budget carrier had posted a net loss of $118.54 million, buffeted by a S$30.33 million loss from its divestment of Tigerair Philippines as well as by a S$57.96 million loss from impairment of associates and S$23.07 million in share of losses of associates.

Revenue for Q3 FY2015 climbed 5.9 per cent year-on-year to S$182.26 million, while stronger yields, higher loads and capacity curbs helped lift operating profit to S$4.1 million, versus an operating loss of S$8.79 million a year ago.

During the quarter under review, total expenses fell 1.5 per cent to S$178.17 million as staff and actual fuel costs came down.

However, the carrier did say that it has hedged 35 per cent of its fuel needs for the 15 months spanning January 2015 to March 2016 at US$111.68 per barrel.

Amid the challenging operating environment in South-east Asia, Tiger has been trying to turn itself around by pulling itself out of markets where its units suffered heavy losses - such as Australia, Indonesia and the Philippines - in order to focus on the ailing Tigerair Singapore.

It has placed out surplus aircraft to India's IndiGo and also cancelled orders for nine Airbus A320 aircraft scheduled for delivery in 2014 and this year. A recent rights issue, where it raised nearly S$230 million, will also put it on firmer footing financially-speaking.

In a conference call on Monday, Tiger's management said that it will continue to work towards a stronger partnership with Scoot, and with the rest of the Singapore Airlines (SIA) group. SIA wholly-owns Scoot, as well as holds a near 56 per cent stake in Tiger.

Tiger still has a 10 per cent stake in Tigerair Taiwan.