- SIA (SGX:C6L)'s 3QFY23 (Oct-Dec 2022) core net profit of S$588m was 19% higher q-o-q due to the seasonal travel peak that pushed SIA mainline (SQ)’s EBIT to S$373m (our estimate, up from 2QFY23’s S$301m), while Scoot’s EBIT surged to S$135m (from 2QFY23’s S$12m). See SIA's announcement dated 21 Feb 2023.
- - Read this at SGinvestors.io -
- On the other hand, cargo profits fell to S$263m (from 2QFY23’s S$383m), on a 19% q-o-q drop in revenue per unit of cargo capacity, which more than overpowered the 9% q-o-q fall in cargo unit costs.
- SIA's 9MFY23 core net profit of S$1.4bn was 83% of our previous FY23F and 85% of Bloomberg consensus, which outperformed expectations.
Pax yields may moderate as competition restores network
- - Read this at SGinvestors.io -
- Our model reflects a moderation in PLF from 85% in FY23F to 82% in FY24-25F; we expect pax yields to fall 12% y-o-y in FY23F followed by a further 5-6% annual decline in FY24-25F – caused by the progressive restoration in capacity of SIA’s regional and international competitors that may increase price competition.
- We expect cargo’s operating metrics to weaken at a faster rate, with the 6% y-o-y fall in cargo yields in FY23F potentially accelerating to a 20% decline in FY24F, and another 15% drop in FY25F – due to a global slowdown in consumer goods purchases due to inflation, excess goods inventory, and the decongestion of the container shipping value chain that has also led to a collapse in shipping freight rates back to pre-COVID levels.
SIA's quarterly core net profit likely past the peak
- Read more at SGinvestors.io.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
Raymond YAP CFA CGS-CIMB Research | https://www.cgs-cimb.com 2023-02-22
Read also CGS-CIMB's most recent report:
2024-01-09 Singapore Airlines - Upgrade To ADD For Big Returns Over Half Year.
Previous report by CGS-CIMB:
2023-11-08 Singapore Airlines - Somewhat Overcast Skies Into 2HFY24.
Price targets by 5 other brokers at SIA Target Prices.
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SIA Dividends & Corporate Actions,
SIA News Articles