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
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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
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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
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Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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