Singapore Airlines - OCBC Investment 2024-05-17: Nearing The End Of The Runway For Exceptionalism

• Singapore Airlines (SIA)'s FY24 (financial year ended 31 Mar 2024) results were a slight beat, with a final dividend of S$0.38 proposed. See SIA's dividend dates.

2HFY24 revenue increased 5.3% y-o-y to a record S$9.9b

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• Passenger flown revenue spiked 10.1% y-o-y to S$8.1b. Although passenger yields declined 6% on additional capacity injected by competitor airlines, passenger traffic grew 17.5%, 0.2 percentage points (ppt) below capacity expansion such that passenger load factor (PLF) was flattish, down 0.1 ppt at 87.3%.
• Cargo flown revenue remained a drag, down 29.7% y-o-y to S$1.1b. Cargo loads were 9.7% higher on strong e-commerce demand especially in 3QFY24, as well as geopolitical concerns, partially offsetting a 35.9% decline in cargo yields as recovery in bellyhold cargo capacity continued.

Group expenditure outpaced revenue growth during the period, up 9.8% y-o-y to S$8.7b

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• Net fuel costs increased 11.1% y-o-y to S$2.8b, due to higher volume uplifted and as well as lower fuel hedging gain, which were partially offset by a decline in fuel prices.
• Altogether, SIA's operating profit for the period was down 19.5% y-o-y at S$1.2b.
• Together with a surplus on disposal of aircraft, spares and spare engines (versus a loss in 2HFY23), higher share of profits from associated companies, and lower tax expense, net profit eked out a 0.3% y-o-y increase, coming in at S$1.2b.

Overall FY24 results were a slight beat

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Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-05-17 SGinvestors.io

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