- Singapore Airlines (SIA)’s 1QFY24 reported net profit of S$734m falls within our guidance of S$700m-750m. Besides the still-strong pax yields and upbeat load factors, the record quarterly earnings were also helped by several tailwinds such as favourable fluctuation of jet fuel price.
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- Maintain SELL on SIA with a lower target price of S$6.82 based on 1.35x FY24F P/B (1.5 standard deviation above historical mean).
SIA's 1QFY24 results in line
- SIA’s 1QFY24 net profit of S$734m (+22% q-o-q, +98% y-o-y) is in line with our expectation, falling within the guided range ofS$700m-750m. Apart from the still-strong pax yields and upbeat pax load factors, we note that 1QFY24 also benefitted from a number of tailwinds including:
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- fuel hedge gain of S$101m (pre-tax), and
- some moderate forex gain (about S$60m).
- Excluding one-off items, SIA’s 1QFY24 adjusted net profit was S$600m (+16% q-o-q) by our estimate.
Pax operation: slight moderation of pax yields q-o-q.
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