SIA Q1 earnings more than double on lower fuel prices and one-off gains

Singapore Airlines planes sit on the tarmac in Singapore's Changi Airport.
Singapore Airlines planes sit on the tarmac in Singapore's Changi Airport. PHOTO: REUTERS

SINGAPORE - First quarter earnings at Singapore Airlines (SIA) more than doubled on lower fuel prices, better operational performance and one-time gains.

Group net profit for the three months to June 30 surged to S$256.6 million from S$91.2 million in the same period a year ago, SIA reported on Thursday.

The earnings were partly boosted by one-off gains which totaled S$178 million.

Of that, about S$142 million came from SIA Engineering's divestment of its 10 per cent stake in Hong Kong Aero Engine Services (HAESL), and a special dividend of S$36 million from HAESL following the sale of HAESL's 20 per cent interest in Singapore Aero Engine Services.

SIA said group revenue slipped 2.1 per cent to S$3.65 million, due in part to lower passenger revenue from the parent premium airline. The decline was partially compensated by improved performance from subsidiaries Scoot and SilkAir, owing to growth in operations.

Total spending during the quarter fell 4.4 per cent to S$3.46 billion, mainly due to a 28 per cent decline in average jet fuel prices.

With the exception of SIA Engineering and SIA Cargo, all the companies in the group - the parent airline, SilkAir, Scoot and Tiger Airways performed better in the April to June period, benefitting from the lower fuel cost.

SIA expects the business outlook for the parent premium airline to remain challenging amid economic weakness and geopolitical concerns in some markets.

"Competition remains intense with aggressive capacity injection, and yields will continue to remain under pressure. Yields will be further diluted if key revenue-generating currencies depreciate against the Singapore dollar," it said in a statement.