SIA Q3 net profit dips 27%

NATIONAL carrier Singapore Airlines on Thursday posted a 27 per cent drop in net profit for the third quarter to S$284 million from a restated S$389.3 million a year ago on the back of weaker operating profit that was exacerbated by share of losses in the group's joint ventures, namely NokScoot.

Group revenue rose 6.5 per cent to S$4.3 billion led by stronger flown revenue, thanks to a 7.7 per cent growth in passenger demand over the period.

The improved topline helped offset higher net fuel cost that rose steeply by 22.2 per cent with operating profit for the three months to December coming in at S$388 million, down 14.5 per cent.

Fuel cost before hedging for the airline group rose by S$285 million, largely owing to a 21.1 per cent or US$16 per barrel jump in average jet fuel price which was partially alleviated by a larger hedging gain versus last year, said the airline in its results announcement.

Share of losses of the group's joint ventures mainly stemmed from NokScoot - its Thai JV carrier - which was hurt by high fuel prices and intense competition.

While the parent airline company's operating profit rose marginally by 0.8 per cent to S$369 million driven by a healthy 6.6 per cent rise in revenue that outpaced higher expenditure, SilkAir and Scoot saw a weakening in operating profits owing to higher net fuel bill.

SIA Engineering's operating profit fell nearly 16 per cent to S$16 million on the back of lower revenue due to lower airframe and fleet management activities.

The group reported an earnings per share of 24 Singapore cents versus 32.9 cents a year ago. No dividend was declared for the period. It is SIA's practice to declare dividends, if any, at half- and full-year results announcements.

SIA advanced 14 Singapore cents or 1.4 per cent to finish at S$9.87 on Thursday. Year-to-date, the counter is up 4.7 per cent.