SIA Q4 net profit drops 28% on weaker operating performance, higher costs

SINGAPORE Airlines (SIA) on Thursday reported a 28 per cent drop in fourth-quarter net profit to S$202.6 million from S$281.1 million a year ago on the back of weaker operating performance and a jump in non-operating costs related mainly to SilkAir's re-fleeting and restructuring.

Revenue grew 1.4 per cent to S$4.08 billion from S$4.02 billion a year ago, which was partially offset by higher net fuel cost - this was up 8 per cent - and non-fuel costs on capacity injection. Non-fuel costs increased 2.1 per cent, below the group's passenger capacity growth of 8 per cent.

For the full year, SIA net profit fell 47.5 per cent to S$683 million on the back of a record revenue of S$16.3 billion from S$15.8 billion a year ago.

The group attributed the record revenue and "solid" operating profit of S$1.07 billion, albeit lower from S$1.5 billion a year ago, to its transformation initiatives.

Earnings per share for the quarter stood at 17.1 Singapore cents versus 23.8 cents a year ago.

The board has recommended a final dividend of 22 Singapore cents per share, lower than the 30 cents declared in the previous corresponding period.

In terms of outlook, the group said most key markets, including those that have seen significant capacity growth such as the US, Japan, Indonesia and New Zealand, continue to grow at a healthy pace while China's international traffic growth rates have softened amid increased supply in the market.

It added that the ongoing trade disputes and slowing economic growth in key markets pose uncertainty to the operating environment and efforts will be made to capture opportunities and mitigate weaknesses in both cargo and passenger segments.

The counter fell four Singapore cents or 0.4 per cent to finish at S$9.40 on Thursday.