SIA quarterly profit up 15.7pc to US$226.8 million as revenue rises 3pc
SINGAPORE Airlines' SIA Group posted a 15
SINGAPORE Airlines' SIA Group posted a 15.7 per cent year-on-year increase in third quarter net profit to S$315 million (US$226.8 million), drawn on revenues S$4,471 billion, up three per cent.
For the nine months ending December 31, SIA Group operating profit rose S$48 million (+5.9%) to S$862 million and net profit was up S$40 million (+8.3%).
The growing scale of the coronavirus outbreak poses significant challenges to the SIA Group. Demand for services to mainland China has been severely affected. Singapore Airlines and SilkAir have reduced frequencies on all mainland China routes in February and March, while Scoot has suspended all flights to mainland China until March 28, the end of the northern winter operating season.
Volatility in fuel prices is likely to persist, in view of recent geopolitical tensions and the demand-side uncertainties in the global oil market. However, the group's hedging policy provides stability in net fuel costs.
For the fourth quarter, the group has hedged 79 per cent of its fuel requirements in MOPS (Mean of Platts Singapore) at a weighted average price of US$76. For FY2020/21, the group has hedged 51 per cent in MOPS and 22 per cent in Brent at weighted average prices of US$74 and US$58 per barrel respectively.
The Transformation Programme has strengthened the group's revenue generating capabilities and driven operational efficiencies while maintaining high service standards. Together with our strong liquidity, this provides the group with the resilience to weather the current challenges.
SilkAir recorded an operating profit of S$7 million, flat against last year. During the quarter, capacity for the carrier fell 8.2 per cent, primarily attributable to the grounding of the 737 MAX 8 fleet as well as the progressive transfer of routes to Scoot.
Scoot registered an operating profit of S$4 million, S$3 million higher than a year ago. Passenger flown revenue increased S$26 million (+6%), supported by higher passenger traffic (+6.8%).
Operating profit for SIA Engineering was stable year on year at $16 million. Revenue fell $4 million (-1.5%), mainly attributable to a reduction in airframe and line maintenance revenue. A reduction in expenditure of $4 million, primarily from lower material costs cushioned the reduction in revenue.