Singapore Airlines share price dip 0.96% after full-year profit fell 47.5%

Singapore Airlines (SIA) on Thursday said its net profit for the full financial year ended March 31 sank 47.5% to S$683 million, due mainly to higher fuel prices and costs incurred in preparation for SilkAir’s merger with the parent airline.

For the fiscal fourth quarter, the group posted a 28% fall in net profit to S$202.6 million, compared to S$281.1 million a year ago.

Despite the profit plunge, the group reported a record full-year revenue of S$16.3 billion, compared to S$15.8 billion a year ago, attributing the performance to its transformation initiatives. For the fourth quarter, the group reported a 1.4% increase in revenue to S$4.08 billion from S$4.02 billion a year ago.

Singapore Airlines share price

SIA’s shares slipped by 0.96% or S$0.09, to S$9.31 minutes into Friday’s trading. The group had posted its earnings results after trading hours on Thursday.

The decline in share price erased the gains the airline company had made this year. It started the year trading at S$9.38, rising to a peak of S$10.19 on February 25 but external conditions such as the United States (US)-China tariff war, the US’ tension with Iran, and volatility in oil prices spooked investors. On Thursday, SIA’s share price had closed at S$9.40.

Singapore Airlines earnings report highlights

SIA’s board has recommended a final dividend of 22 Singapore cents per share, which is lower than the 30 Singapore cents declared in the previous corresponding period.

The group’s operating profit for the full-year came in at S$1.07 billion.

Passenger load factor for the group’s carriers, which includes SIA, SilkAir and budget airline Scoot, rose to a record 83%.

Expenditure for the group rose by 7% or S$999 million, with higher net fuel costs accounting for two-thirds of the increase. Fuel expenditure had climbed 17.6%, or S$688 million, as jet fuel prices gained by an average 21.6% during the year.

Some other expenses came from the overhauling the fleet of its regional wing SilkAir, which is changing from Airbus to Boeing, and costs to restructure as SilkAir prepares to merge with into the parent airline.

Going forward, SIA said that 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.

Meanwhile, China's international traffic growth rates have softened while the supply in the market increases.

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 airline company said.