SIA posts record full year profits

Singapore Airlines (SIA) has posted a record net profit of $2.7bn for the full financial year, up 24% year-on-year (YoY) from $2.2bn in the previous financial year. Its operating profit was up 1.3% YoY to $2.7bn. The group's total revenues were up 7% YoY to $19bn, while its total expenditure was down 8% to $16.3bn. Passenger flown revenue rose by 17.3% to $15.7bn, despite a 7.6% decline in passenger yields. It said demand remained strong throughout the financial year and was ""boosted by a rebound in North Asia as China, Hong Kong SAR, Japan, and Taiwan fully reopened their borders,"" the group said. Both SIA and its low-cost subsidiary Scoot carried a total of 36.4 million passengers, up 37.6% YoY. Its passenger load factor improved by 2.6 percentage points to a record 88%, with SIA and Scoot recording a load factor of 87.1% and 91.2% respectively. At the end of the financial year, the group's shareholder equity was $16.3bn, down $3.5bn from the end of the previous financial year, which was due to its partial redemption in June and December 2023 of its June 2021 mandatory convertible bonds (MCB) for $5.1bn (including accrued yields). The group had repaid $1.9bn in borrowings, reducing its total debt balance $13.4bn. Cash and bank balances decreased by $5.1bn to $11.3bn. The company intends to redeem all remaining MCBs. The accreted principal amount payable, being 112.616% of the principal amount of the MCBs, will be $1.7bn. The redemption amount will be paid to eligible bondholders on June 24, 2024. With this, the company would have fully redeemed the $9.7 billion of MCBs that were issued in 2020 and 2021. The group's board of directors recommended a final dividend of 38 cents per share for the full year bringing the total dividend for the year to 48 cents per share, which includes the interim dividend of 10 cents per share paid on December 22, 2023. The final dividend is expected to be paid on August 21, 2024, for shareholders as of August 2, 2024. For the year ahead, the company expects passenger yields to continue to moderate due to increased capacity injection by airlines, especially in the Asia-Pacific region. It said it will monitor and adjust its network to keep it aligned with demand. It added that cargo demand strengthened towards the end of the financial year with e-commerce demand growing and the shift to air freight as the Red Sea issues continue.