Singapore Airlines - OCBC Investment 2024-08-01: Dark Clouds Ahead, Though Nothing Out Of The Blue

• Singapore Airlines (SIA)'s 1QFY25 (financial year ending 31 Mar 2025) revenue grew 5.3% y-o-y on capacity increase, but net profit tumbled 38.5% y-o-y as higher fuel costs resulted in margin erosion.

SIA reported a 5.3% y-o-y increase in 1QFY25 group revenue to S$4.7b

• - Read this at SGinvestors.io -
• Meanwhile, cargo flown revenue slipped 0.2% y-o-y to S$541m. Increased demand for air freight from eCommerce as well as tensions in the Red Sea supported a 5.9 ppt increase in cargo load factor to 57.7%, partially offsetting a 19.1% decline in cargo yields as recovery in bellyhold cargo capacity continued.

Group expenditure outpaced revenue growth during the period, up 14% y-o-y to S$4.2b

• - Read this at SGinvestors.io -
• Fuel costs, however, rose 30.1% y-o-y due to higher volume uplift, higher fuel prices, and lower hedging gains – and was the main detractor of margin performance this quarter, in our view.
• Consequently, operating profit and net profit moderated 37.7% and 38.5% y-o-y to S$470.2m and S$451.7m, respectively.
• SIA’s 1QFY25 revenue and PATMI came in at 24.8% and 26% of our initial full year forecast, respectively.

SIA’s share price came under pressure after 1QFY25 results

• Read more at SGinvestors.io.

Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-08-01 SGinvestors.io

---