In addition, the airline will see net cash outflow in FY2024 as it will have to spend $3.35 billion to partially redeem its second tranche of mandatory convertible bonds (MCBs) in June. SIA will also have to spend on renewing its fleet of aircraft as well as expand and invest around $360 million in the merged Vistara/Air India group, notes Mak. SIA owns a 49% stake in Vistara.
PhillipCapital analyst Peggy Mak has re-initiated coverage on Singapore Airlines (SGX:C6L
) (SIA) with a “reduce” call and a target price of $6.80.
In her June 22 report, Mak notes that SIA may have enjoyed an “exceptional” year for the FY2023 due to its first-mover advantage, its tapering passenger yields and load factors may cause the airline’s FY2024 and FY2025 net profit to decline by 24% and 46% respectively.
