SINGAPORE (Nov 5): Singapore Airlines saw earnings of $94.5 million for 2Q20 ended Sept 30, 70% higher compared to a year ago.
SIA says this was mainly due to higher contributions from associates and joint ventures of $78 million only to be offset by higher finance charges of $28 million.
Revenue for 2Q20 rose 5.3% to $768.5 million from $700 million a year ago mainly driven by growth in passenger-flown revenue, although the topline was dragged down by cargo-flown revenue.
Operating performances were mixed across the group. Parent airline reported a 1.7% decrease in operating profit to $233 million from $237 million a year ago; SilkAir reported losses remained unchanged at $3 million a year ago; while Scoot reported losses widened to $39 million from $11 million.
The increase in SIA’s revenue was led by a growth in passenger loads, but this was offset by weaker cargo revenue and higher net fuel and other expenditure. SilkAir also saw higher revenues from traffic growth of 3.1% but was matched by an increase in expenditure partly contributed by the grounding of the Boeing 737 MAX 8 aircraft.
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Scoot saw passenger revenue rising $15 million, driven by a 5% increase in passenger carriage on 4.7% capacity growth. However this was offset by 7% higher costs, which included fuel.
Meanwhile, SIA Engineering reported a $8 million improvement in operating profit to $19 million mainly due to higher revenue from airframe and line maintenance segment, lower subcontract costs and a favourable exchange variance.
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Across the entire group, passenger revenue was up 7.5% to $244 million while cargo revenue dropped 16.3% to $93 million. Expenditure increased 4.7% to $180 million due to capacity injection which outpaced revenue growth of $160 million, or 3.9%.
In its outlook statement, SIA is forecasting stronger passenger bookings in the coming months, with yields supported by premium cabin traffic in their outlook. However, SIA also sees headwinds in the form of intensifying competition in key operating markets and an uncertain global outlook. Cargo demand is also forecast to remain weaker in the face of ongoing trade tensions and a manufacturing slowdown. Fuel prices are expected to remain volatile as well due to geopolitical and economic risks.
Shares in SIA closed 4 cents lower at $9.43 on Tuesday before the results were announced.
