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Singapore Airlines Profit Drops 68% on Air India Hit, Plans Special Dividends

Management pledges support for Air India’s turnaround despite softer yields.

Overview

  • Net profit for the six months to Sept 30 fell to S$239 million from S$742 million a year earlier, with the share of associates’ results S$417 million lower largely due to Air India.
  • The board declared a 5-cent interim dividend and a 3-cent first interim special dividend payable on Dec 23, and proposed 10 cents per share in special dividends annually for the next three financial years, totaling about S$900 million subject to approval.
  • Interest income declined by S$103 million due to smaller cash balances and interest rate cuts, while total expenditure rose by S$170 million on capacity expansion and inflationary pressures.
  • SIA and Scoot carried 20.8 million passengers in the first half, up 8% year on year, as passenger yields slipped about 2.9% to roughly 9.9 Singapore cents per revenue passenger-kilometre amid intensified competition.
  • Executives reiterated commitment to Air India’s multi-year transformation after a difficult year for the Indian carrier, and SIA shares fell about 2.3% on Nov 14 during the results briefing.