Singapore Airlines - CGSI Research 2024-02-20: Good Quarterly Profit, But Below Expectations

• Singapore Airlines (SIA)’s 3QFY24 core net profit of S$628m was down 3.2% q-o-q, contrary to our forecast of a q-o-q increase. Passenger ASK, RPK, yield and RASK metrics were stronger q-o-q due to the year-end peak travel season, closely hewing to our expectations.

SIA’s cargo yields did not track the Baltic Index upwards

• - Read this at SGinvestors.io -
• SIA’s post-results analyst briefing tomorrow morning may shed light on the reason for the weak q-o-q cargo yield growth.
• - Read this at SGinvestors.io -

Bloomberg consensus’ expectations for SIA may have run ahead of reality

• Bloomberg consensus is forecasting SIA's FY24F PATAMI of S$3.15bn, and our forecast of S$2.7bn is 16% lower.
• In its results release, SIA guided for demand for air travel to remain healthy in 4QFY24F and 1QFY25F, stating that “forward sales continue to be robust, in line with capacity increases in most markets, supported by the demand for leisure travel through the school holidays and Easter peak in Mar and Apr 2024F.” This suggests that passenger load factors would continue to sustain at high levels in the near term, not least supported by key events in Singapore, such as the Singapore Airshow in Feb and the Taylor Swift concerts in Mar.
• However, we think that these positives have been well reflected in its share price, and the street may have run ahead of what SIA can reasonably deliver.

FY24F core earnings forecast cut by 9%

• Read more at SGinvestors.io.

Raymond YAP CFA CGS International Research | https://itrade.cgsi.com.sg 2024-02-20 SGinvestors.io

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