STRONG demand and a continued recovery in the global aviation industry led Singapore Airlines’ (SIA) : C6L 0% net profit to soar to S$1.2 billion for the second half ended March, reversing a loss of S$125.2 million in the corresponding year-ago period.

The group’s H2 earnings were up 32.7 per cent, or S$303 million higher, compared with the first half ended September 2022.

The stronger second-half bottom-line results helped the group post its highest full-year net profit in its 76-year history to S$2.2 billion for FY2022/23, versus a net loss of S$962 million in FY2021/22, the company said in a bourse filing on Tuesday (May 16). 

SIA’s board has recommended a final dividend of S$0.28 per share. Including the interim dividend of S$0.10 per share, the total dividend payout for the fiscal year stands at S$0.38 per share. 

The final dividend is subject to shareholder approval at the upcoming annual general meeting on Jul 27, and will be paid out to shareholders on Aug 18. 

The group attributed the stronger profit figures in H2 compared with H1 to a better operating performance, as well as a net interest income in the second half versus net finance charges in the first half. These were, however, partially mitigated by a higher tax expense. 

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Revenue for H2 came in at S$9.4 billion, nearly double that of revenue of S$4.8 billion in the year-ago period. This was also another record half-year revenue figure for the airline. 

Revenue for H2 was also up 11.2 per cent from H1. Passenger flown revenue was up 23.5 per cent on the back of a 24.8 per cent growth in traffic, outpacing the 18.5 per cent expansion in capacity. Passenger load factor for the period rose 4.4 percentage points to a record 87.4 per cent. 

Cargo flown revenue, meanwhile, fell 28.3 per cent due to declines in loads and yields. 

Expenditure for H2 was up 10 per cent from H1 to S$7.9 billion. This comprised a S$900 million or 20.1 per cent rise in non-fuel expenditure, that was partly offset by a S$182 million or 6.8 per cent decrease in SIA’s net fuel cost to S$2.5 billion due primarily to a drop in fuel prices. This was partly offset by higher fuel volume uplifted and a lower fuel hedging gain, SIA said. 

Looking ahead, SIA said the demand for air travel remains robust in the first quarter of FY2023/24, underpinned by the recovery in air travel in East Asia. 

The company said forward sales remain healthy across all cabin classes, led by a strong pick up in bookings to China, Japan, and South Korea. It added that it will monitor the demand for air travel, and adjust its capacity accordingly. 

On the cargo front, SIA said near-term demand is expected to remain soft as the industry navigates headwinds from the macroeconomic environment, and as inventory levels recalibrate to post-Covid conditions. 

Inflation and weak economic conditions will impact consumer demand and trade, while increased bellyhold capacity amid softer demand continues to exert downward pressure on cargo yields, particularly on key trade lanes, it noted. 

“Geopolitical and macroeconomic uncertainties, as well as high cost inflation, could pose challenges for the airline industry in the months ahead. Even though fuel prices have moderated in recent months, they remain at elevated levels,” said the group. 

Shares of SIA gained 0.3 per cent or S$0.02 on Tuesday to close at S$5.92.