SIA reports 35.6% drop in net profit for the October-December quarter

Singapore Airlines reported a net profit of $177 million for the October-December quarter.
Singapore Airlines reported a net profit of $177 million for the October-December quarter. PHOTO: ST FILE

SINGAPORE - Singapore Airlines (SIA) reported a 35.6 per cent drop in net profit for the October-December quarter to $177 million.

During the quarter, the group recognised a $79 million write-down of the

Tigerair brand and trademark following the announcement by Budget Aviation

Holdings that Tiger Airways and Scoot would operate under the common "Scoot" brand.

In addition, there was an absence of a gain from SilkAir's sale and leaseback of four 737-800s reported last year.

Operating profits in the three months increased by 1.7 per cent to $293 million.

Group revenue fell by 2.5 per cent to $3.8 billion, mainly attributable to lower passenger flown revenue in a weak-yield environment, SIA said on Tuesday.

Group expenditure contracted by $102 million - a 2.8 per cent dip - to $3.6 billion.

Profits for the nine months from April to December fell by 14 per cent to $499 million.

Improvement in operating profit was negated by lower dividends from long-term investments, among other factors.

"2017 is expected to be another challenging year amid tepid global economic conditions and geopolitical concerns, alongside other market headwinds such as overcapacity and aggressive pricing by competitors" SIA said.

Loads and yields for both the passenger and cargo businesses are projected to remain under pressure.

Fuel prices have trended upward since the last quarter and are expected to remain volatile as uncertainty lingers around global oil production output.

An expanding, fuel-efficient A350-900 fleet has enabled the addition of more long-haul routes for SIA. At the same time, with a deeper integration between budget carriers Scoot and Tigerair, the group can also capitalise on new opportunities to boost network connectivity and growth in the low-cost airline segment, SIA said.

The airline will maintain vigilance over its costs, and its strong balance sheet positions it well to weather the many challenges ahead, it added.

Quarterly earnings per share was 15 cents, down from 23.6 cents a year earlier, while net asset value per share was $11.72 as at Dec 31, up from $10.96 as at March 31 last year.