Singapore Airlines Beats Expectations With Highest Profit In Seven Years
Singapore Airlines Ltd on Thursday (May 17) topped market expectations by reporting a 148% rise in full-year net profit to the highest level since 2011, as passenger and cargo revenue rose and it bene...
Singapore Airlines Ltd on Thursday (May 17) topped market expectations by reporting a 148% rise in full-year net profit to the highest level since 2011, as passenger and cargo revenue rose and it benefited from a transformation programme.
However, it warned of pressures from intense competition, costs and rising fuel prices despite strong bookings for the coming months and a continued stabilisation in airfares.
The carrier, a benchmark for Asia's premium airlines, made S$893 million ($665.6 million) in the year ended March, up from S$360 million a year earlier and 28 percent higher than the S$697 million average forecast from 14 analysts polled by Thomson Reuters I/B/E/S.
A strong fourth quarter marked a turnaround from a year ago, when an operating loss by its flagship full-service airline led the company to launch a three-year transformation programme designed to cut costs and boost revenue amid competition from Chinese and Middle Eastern rivals and low-cost carriers.
Singapore Airlines said transformation initiatives including a new revenue management programme, a new airfare pricing structure and the establishment of a centralised pricing unit boosted revenue, while the airline also saved costs via more efficient use of fuel and waste reduction.
"The first year of the ... three-year transformation programme has shown good progress," the airline said. "The next two years of the programme will further build on initiatives around enhancements to the customer experience, revenue growth and improvements in operational efficiency."
Singapore Airlines' group revenues rose 6.3% to S$15.8 billion for the full year, with improvements across all business lines, outpacing a 3.5% rise in costs, including an 18 percent increase in fuel.
The airline announced a final dividend of S$0.30 a share, nearly triple the S$0.11 paid a year earlier.
In the fourth quarter ended March 31, operating profit rose to S$214 million from S$27 million a year earlier, with the flagship full-service airline swinging from last year's S$41 million loss to a S$137 million profit.
Average ticket prices, or yields, rose 1% in the fourth quarter, breaking a downward trend as the airline and its peers curbed discounting to counter rising fuel prices.