SIA's 2Q profit down 43 per cent, hit by losses from associated companies

SINGAPORE Airlines (SIA) reported a 43 per cent drop year on year in net profit to S$90.9 million for the second quarter ended Sept 30, hit by losses from associated companies.

However, its operating profit for the second quarter was up some 52 per cent to nearly S$132 million, boosted by lower expenditure.

Revenue was nearly flat at S$3.9 billion, while earnings per share worked out to 7.7 Singapore cents, down from 13.6 cents in the corresponding quarter a year earlier.

The group said passenger revenue was marginally higher, as an increase in passenger carriage was offset by a 0.9 per cent dip in yields. Meanwhile, cargo revenue edged down 0.5 per cent as capacity was scaled back by about four per cent, although yields improved by 2.8 per cent.

Losses from associated companies came to S$104 million, versus a profit of S$34.3 million a year ago, from the losses Tiger incurred from subleasing surplus aircraft and from the sale of Tigerair Australia to Virgin Australia.

For the first half of the fiscal year, net profit was down 55.5 per cent to S$125.7 million, while revenue slipped two per cent to S$7.58 billion.

SIA said: "The operating landscape for the airline industry remains competitive and challenging, as an uncertain global economic climate and geopolitical concerns persist. Demand is generally flat, and yields will remain under pressure amid intense competition from other airlines and promotional activities in weaker markets."

Jet fuel prices have been easing, but the group said it was concerned that this could reflect a slowdown in major economies, which could hurt travel demand.

SIA is declaring an interim dividend of five Singapore cents per share.