Singapore Airlines - Maybank Research 2024-11-11: Weaker-than-expected 2QFY25; Competition Takes Toll

Singapore Airlines - Weaker-than-expected 2QFY25; Competition Takes Toll

Published:
SIA (SGX:C6L) | SGinvestors.io
  • SIA’s 2QFY25 net profit of S$290m (-59% y-o-y, -36% q-o-q) is below our and market expectations. This took 1HFY25 earnings to S$742m, achieving 43%/37% of MIBG/consensus FY25 estimates.
  • Despite lower profitability, the group retains its interim dividend of 10 cents, which translates into dividend payout ratio of 43.7%.

Full-service carrier faces keen competition

  • - Read this at SGinvestors.io -
  • Amid intensifying competition in its key markets, pax load factor also fell to 85.8% (-2.8ppt y-o-y, -1.1ppt q-o-q) with Scoot showing relatively more resilience.
  • Looking ahead, SIA's management expects air travel demand to stay robust heading into the year-end peak, although it’s cognizant of the challenging operating landscape. As such, we think pax yields are likely to remain under pressure, especially due to increased industry capacity in East Asia route region.

Cargo yields appear to stabilise

  • - Read this at SGinvestors.io -
  • While there was a 7.7% y-o-y decline in cargo yield to 36.2 cents per load tonne-kilometre along with higher belly-hold capacity, we note the yield has somewhat stabilised at this level since 4QFY24.
  • Notwithstanding healthy air freight demand, SIA still needs to closely monitor key trade lanes and adjust its capacity accordingly in view of the ongoing geo-political tensions and macroeconomic uncertainty, which may impact global trade.

Successful merger of Air India-Vistara

  • Read more at SGinvestors.io.




Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.




Eric Ong Maybank Research | https://www.maybank.com/ 2024-11-11



Previous report by Maybank:
2024-09-02 Singapore Airlines - Clearing The Final Hurdle For Merger Of Vistara & Air India.

Price targets by 4 other brokers at SIA Target Prices.

Listing of research reports at SIA Analyst Reports.

Relevant links:
SIA Share Price History,
SIA Announcements,
SIA Dividends & Corporate Actions,
SIA News Articles





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