SIA posts record revenue and earnings, expects robust travel demand to prevail in 2023 - The Straits Times

SINGAPORE – The rolling good times are back for Singapore Airlines (SIA).

A week after announcing it would be redeeming half of its outstanding mandatory convertible bonds (MCBs), and a day after posting strong monthly passenger numbers, the airline unveiled record revenue and profit numbers for the 2022/23 financial year.

The company posted net profit of $2.16 billion for the year ended March 31, rebounding from a loss of $962 million a year earlier.

This came on the back of record revenue of $17.78 billion, a 133 per cent surge from March 2022’s $7.62 billion.

Operating profit soared to $2.69 billion, erasing a loss of $610 million a year earlier.

Expenditure rose 83.4 per cent to $15.08 billion, primarily due to a 138 per cent increase in net fuel costs, a 61.5 per cent increase in non-fuel expenditure, and an increase in the year-on-year impact of fair-value changes on fuel derivatives.

The $3.02 billion rise in net fuel costs was underpinned by an almost 50 per cent increase in fuel prices. But this was partially offset by higher fuel hedging gains.

Group shareholders’ equity was $19.9 billion as at March 31, a reduction of $2.5 billion from a year ago following the redemption in December 2022 of the MCBs that were issued in June 2020.

Total debt balances decreased by $400 million to $15.3 billion, mainly due to the repayment of borrowings. This was partially offset by an increase in lease liabilities as a result of sale and leaseback activities.

Consequently, the group’s debt-to-equity ratio rose from 0.7 times to 0.77 times.

Cash and bank balances saw an increase of $2.5 billion year on year to $16.3 billion.

Net cash generated from operations, including proceeds from forward sales, contributed $9.1 billion, while the group paid $3.9 billion for the redemption of the 2020 MCBs.

In addition to the cash on hand, the group retains access to $2.2 billion of committed lines of credit, all of which remain undrawn.

SIA is planning to pay a final dividend of 28 cents per share for FY2022/23. Including the interim dividend of 10 cents per share paid in December 2022, the total dividend for FY2022/23 will be 38 cents per share.

The results came on the back of a robust pickup in traffic following border openings early in 2022.

SIA and its low-cost carrier, Scoot, carried 26.5 million passengers during the past year, a sixfold increase from a year before.

The group’s passenger load factor (PLF) jumped 55.3 percentage points to 85.4 per cent, the highest in its history. PLF represents the percentage of available seats on a flight that are filled by passengers.

Individually, SIA achieved a record PLF of 85.8 per cent, while Scoot delivered a PLF of 83.9 per cent.

The group’s passenger capacity reached 79 per cent of pre-Covid-19 levels in March, higher than the average of 58 per cent in the Asia-Pacific region. It is projected to reach an average of around 83 per cent of pre-Covid-19 levels in the first half of FY2023/24.

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