SIA stock surges amid positive outlook for air travel
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Singapore Airlines said it expects air travel to remain robust in the first quarter of the current financial year, supported by a recovery in air travel in East Asia.
ST PHOTO: SHINTARO TAY
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SINGAPORE - Singapore Airlines (SIA) stock has been on a sharp take-off trajectory over the past few weeks and is now cruising at its highest levels since March 2020.
It closed at $7.60 on Wednesday, up 2.7 per cent for the session. But it has surged almost 20 per cent over the past two weeks, making it the top-performing blue chip on the local bourse. Analysts and brokers were at a loss to explain the sharp surge in the price over recent weeks.
But it comes after the company reported a record profit
In May, SIA announced a profit of $2.16 billion, rebounding from a loss of $962 million a year earlier. The latest results also included record revenue of $17.78 billion, a 133 per cent surge from 2022’s $7.62 billion. The company declared a dividend per share of 28 cents.
Operating profit soared to $2.69 billion, erasing a loss of $610 million a year earlier.
Passenger load factor remains around 85 per cent, one of the highest levels in recent memory.
Early in May, the company announced plans to redeem half of its mandatory convertible bonds (MCBs)
The bonds were issued to raise funds to support the company’s balance sheet amid an almost total shutdown of air travel during the pandemic.
Looking forward, SIA said it expects air travel to remain robust in the first quarter of the current financial year, supported by a recovery in air travel in East Asia.
The company revealed that forward sales remain healthy across all cabin classes, led by a strong pickup in bookings to China, Japan and South Korea.
However, cargo operations are seeing some softening as the industry navigates headwinds from the macroeconomic environment, and as overall inventory levels recalibrate to post-Covid-19 conditions.
