- SIA reported net profit of S$ 410mil (-28.7% y-o-y) in 4QFY25, with full-year net profit of S$ 2,778mil (+3.9% y-o-y) a record high. Excluding the one-off non-cash accounting gain of S$ 1,098mil from the Air India-Vistara merger, core net income would have been S$ 1,680mil – 6% above consensus and 2% above our estimate.
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4QFY25 operating profit of S$285mil (-50% y-o-y) missed street/DBS estimates by 45%/41% on cost pressures.
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- Total expenditure, however, rose 8.0% y-o-y in 4QFY25, higher than anticipated, reflecting broad-based cost inflation across the aviation ecosystem. In particular, other operating expenses grew 55.9% y-o-y in 2H25 (quarterly split undisclosed), attributed to lease remeasurement charges, FX losses (mainly due to a net long US$ position), and provisions for Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) emissions, though these provisions are small (estimated in range of tens of millions S$) and not payable until 2027.
- Net fuel costs were stable y-o-y in 4QFY25. As a result, SIA's operating profit declined 49.6% y-o-y to S$ 285mil in the quarter, missing both street and internal estimates by 45% and 41%, respectively. Operating margin contracted 5.9ppt y-o-y to 5.9%, underscoring the margin pressure from cost escalation.
Passenger yields are expected to continue moderating, albeit at a slower rate.
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