SQ profits surge Q4

SINGAPAORE Singapore Airlines said Thursday its fourth quarter net profit surged 47% year-on-year as its fuel bill declined, but warned of a tough outlook due to stiff competition.
Net profit in the three months to 31 March rose to SGD39.6 million (USD30.05 million) from SGD27.0 million in the same period a year ago on revenue of SGD3.88 billion, up from SGD3.63 billion.
For the full year to March, net profit jumped 2.34% to SGD367.9 million from SGD359.5 million, the airline, known as SIA, said in a filing to the Singapore Exchange.
Full-year revenue was SGD15.57 billion, up 2.1% from SGD15.24 billion.
inside no 7Fourth quarter performance was boosted due to reduced operating expenditure from lower fuel prices, and improved passenger yields that benefited from “stringent inventory control”, SIA said.
Fuel costs, which account for over a third of expenditures, fell to SGD1.29 billion from SGD1.38 billion during the quarter.
World oil prices have fallen sharply since June last year due to a global supply glut.
SIA said full-year profits were dragged down by “weaker share of results from joint venture and associated companies”.
SIA currently owns 55.8% of Tiger Airways after it annexed the struggling budget carrier last year.
For the full year to March, Tiger’s losses widened to SGD264.2 million from SGD223 million a year ago, the airline reported separately 4 May.
SIA said the outlook remains tough.
inside no 7.1“Market conditions remain challenging amid an uncertain global economic outlook. Demand in key markets is soft, primarily on Americas and European routes,” it said.
“Competition remains intense as other airlines continue to inject capacity with aggressive pricing,” the airline added.
The airline, Asia’s third-largest carrier by market value according to Bloomberg News, said the depreciation of “key revenue-generating currencies” such as the Australian dollar, Japanese yen and the euro will “place further pressure on yield and demand”.
A strengthening US dollar will increase operating costs, it said.
Despite an improving performance from its freight arm, SIA Cargo, the airline said “cargo yields are expected to remain under pressure due to excess capacity in the market”.
The airline said its subsidiaries SilkAir, Scoot and Tiger Airways will add new routes this year, which will see its network expand to 119 destinations from the current 116, across 35 countries.
SIA currently has 105 passenger aircraft including 19 Airbus A380 superjumbos.
SIA shares fell 0.26% to SGD11.64 ahead of the release of the earnings report. The Straits Times Index rose 0.8% to 3,455.78.

sourced:ttrweekly.com