Singapore Airlines (SIA) - DBS Research 2023-05-18: Get Ready For Another Stellar Performance

Singapore Airlines (SIA) - Get Ready For Another Stellar Performance

SIA (SGX:C6L) | SGinvestors.ioSIA (SGX:C6L)
  • Singapore Airlines (SIA) reported net profit of S$601.9m in 4QFY23 (-4.2% q-o-q, vs net loss of S$209.9m in 4QFY22), marking the highest fourth quarter profit since FY07.

Yet another record quarter for SIA's earnings, surpassing the street’s expectation.

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  • SIA incurred a considerable FX loss of S$212.8m in FY23, primarily the result of a depreciation in the US$ and its net-long US$ position. While the group is typically net short in US$ as a sizable portion of expenses is denominated in US$, it was temporarily net long in US$ as significant proportion (42.4%) of its massive cash and bank balances were held in US$. Barring this development, SIA’s net profit would have been even more impressive.

Group revenue of S$4,511.9m in 4QFY23 was down 6.9% q-o-q due to seasonality but up 82.5% y-o-y.

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  • Passenger yields at the flagship carrier, SIA, and Scoot stayed robust in 4QFY23, and were 20% and 37% above pre-pandemic levels respectively. Similarly, passenger load factors sustained above historical levels at 86.3% and 91.5% at SIA and Scoot respectively, marking a record high for the group’s low-cost carrier.
  • Unsurprisingly, freight volumes and freight rates continued to descend during the quarter, burdened by sluggish demand amid macroeconomic challenges.
  • Unit costs (CASK) declined by 4.1% q-o-q at SIA but climbed by 9.4% q-o-q at Scoot in 4QFY23. As a group, ex-fuel unit cost per ATK rose by 5.6% h-o-h and 6.4% y-o-y in 2HFY23, primarily attributable to an acute increase in staff costs which more than offset improvements in other areas.
  • Staff costs soared above pre-pandemic levels in 2HFY23 even though capacity was not fully restored. A substantial part of the hike is attributed to an increase in bonus provision (linked to SIA’s performance) and to a lesser extent, wage inflation.

Operating cash flow of S$9.1bn is the highest in history

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Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Paul YONG DBS Group Research | Jason SUM CFA DBS Research | Tabitha FOO DBS Research | 2023-05-18

Read also DBS's most recent report:
2024-02-22 Singapore Airlines - Dual Turbulence - Navigating Pricing & Cost Pressures.

Previous report by DBS:
2024-01-18 Singapore Airlines (SIA) - Limited Upside As Earnings Peak.

Price targets by 4 other brokers at SIA Target Prices.

Listing of research reports at SIA Analyst Reports.

Relevant links:
SIA Share Price History,
SIA Announcements,
SIA Dividends & Corporate Actions,
SIA News Articles


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