SIA Group operating profit halved in 3QFY2012, pax yield under pressure, cargo decline to continue

SIA Group revenue up 1% - financial highlights for three months ended 31-Dec-2011:

• Total revenue: USD3108 million, +0.9% year-on-year;
• Total costs: USD2982 million, +11.6%;
  • Fuel: USD1207 million, +35.2%;
  • Labour: USD434.7 million, -2.5%;
• Operating profit (loss): USD126.1 million, -69.1%;
  • Singapore Airlines: USD109.9 million, -63.8%;
  • SIA Engineering: USD22.5 million, -17.6%;
  • SilkAir: USD25.7 million, -28.9%;
  • SIA Cargo: (USD32.1 million), compared to a profit of USD38.5 million in p-c-p;
• Net profit: USD108.4 million, -53.1%;
• Passenger numbers:
  • SIA: 4.4 million, -0.3%;
  • SilkAir: 808,000, +6.9%;
• Passenger load factor:
  • SIA: 77.2%, -2.5 ppts;
  • SilkAir: 78.8%, -2.0 ppts;
• Passenger breakeven load factor:
  • SIA: 76.0%, +4.9 ppts;
  • SilkAir: 59.2%, +3.8 ppts;
• Passenger yield: USD 9.7 cents, stable;
• Passenger cost per ASK: USD 7.4 cents, +7.0%;
• Cargo volume: 323,500 tonnes, +6.2%;
• Cargo load factor: 64.7%, -0.3 ppt;
• Cargo breakeven load factor: 69.2%, +8.0 ppts;
• Cargo yield: USD 27.8 cents, -2.5%;
• Cargo cost per CTK: USD 19.2 cents, +10.1%;
• Total assets: USD17,455 million, -11.0% when compared to period ended 31-Mar-2011;
• Cash and bank balances: USD3567 million, -38.7% when compared to period ended 31-Mar-2011;
• Total liabilities: USD6849 million, -15.0% when compared to period ended 31-Mar-2011. [more - Original PR]

*Based on the conversion rate at USD1 = SGD1.24706

SIA: "Forward bookings continue to show signs of weakness in the final quarter of the financial year, due to uncertainty in the global economy and the protracted Eurozone debt crisis. Similarly, the air cargo market remains weak as forward indicators such as Purchasing Manager Indices slide further alongside weak consumer demand in major developed economies. Passenger yields are expected to remain under pressure while cargo yields are expected to continue to decline. As the price of jet fuel remains high and volatile, fuel costs continue to adversely impact the Group's financial performance. Amidst these challenges, the Group will continue to proactively seek out revenue opportunities and exercise flexibility in aligning capacity deployment to market demand. Vigilance in cost management will be maintained," Company statement. Source: SIA, 02-Feb-2012.