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SIA posts sharp rise in Q4 profit, thanks in part to cheaper fuel
SINGAPORE Airlines (SIA) reported a net profit of S$224.7 million for the fourth quarter ended March 31, 2016, up from S$39.6 million a year ago, thanks to lower fuel costs and the refund of competition-related fines.
During the quarter, SIA Cargo received a refund of S$117 million for a fine paid in a prior year.
Revenue fell from S$3.88 billion to S$3.71 billion, driven down by weaker passenger and cargo revenue.
Operating profit for the fourth quarter was higher across the parent airline, SIA Engineering, SilkAir, Scoot and Tiger Airways, but weakened for SIA Cargo.
Earnings per share for the quarter under review jumped from 3.4 Singapore cents to 19.3 cents.
For the full year, net profit climbed from around S$368 million in FY15 to S$804.4 million in FY16, while revenue declined from S$15.57 billion to S$15.23 billion.
SIA has proposed a final dividend of 35 cents per share.
As at the start of FY17, the group had hedged 42 per cent of its first quarter fuel requirement at a weighted average Singapore jet kerosene (MOPS) price of US$87 per barrel. The full year's fuel requirement was 25 per cent hedged in MOPS at US$83 per barrel and 6 per cent in Brent at US$64 per barrel.
"The group is contending with a challenging operating environment in key markets, caused in part by weak economic activity and relatively rapid growth in capacity, evidenced by increasing promotional fare activity," said SIA. "Nevertheless, the group is well positioned to compete in this environment."