PRESS RELEASE
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Highest full year operating and net profits in the Group’s history as robust demand for air travel drives record passenger revenue and load factors
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Geopolitical tensions, macroeconomic uncertainties, inflationary pressures, and supply chain constraints pose challenges for the aviation industry
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The SIA Group’s robust foundations and long-term strategic initiatives position it strongly to capture future growth opportunities
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Proposed final dividend of 38 cents per share results in a total payout of 48 cents per share for FY2023/24, or a dividend yield of 7.5%1
The demand for air travel remained buoyant throughout FY2023/24, boosted by a rebound in North Asia as China, Hong Kong SAR, Japan, and Taiwan fully reopened their borders. SIA and Scoot carried a combined 36.4 million passengers, up 37.6% year-on-year. Passenger traffic grew 26.6%, outpacing the capacity expansion of 22.9%. As a result, the Group passenger load factor (PLF) improved 2.6 percentage points to a record 88.0%. SIA and Scoot registered record PLFs of 87.1% and 91.2% respectively.
Group revenue rose $1,238 million (+7.0% year-on-year) to a record $19,013 million. Passenger flown revenue rose by $2,319 million (+17.3%) to $15,685 million, despite a 7.6% decline in passenger yields. Cargo flown revenue fell $1,485 million (-41.2%) to $2,119 million. While cargo loads increased by 1.7% due to the strong demand from the e-commerce segment, yields were 42.2% lower year-on-year – albeit 29.8% above pre-pandemic levels2.
Group expenditure increased $1,202 million (+8.0%) to $16,285 million. Non-fuel expenditure rose by $1,336 million (+13.5%), and was partially offset by a $132 million decrease (-2.5%) in net fuel cost. The increase in non-fuel expenditure was lower than the 16.0% increase in overall passenger and cargo capacity. On the other hand, net fuel cost fell despite higher volumes uplifted (+$918 million) and a lower fuel hedging gain (+$358 million), mainly due to an 18.5% decrease in fuel prices (-$1,281 million).
As a result, Group operating profit reached a record $2,728 million, up $36 million or 1.3% from a year before.
The Group’s net profit improved by $518 million (+24.0%) to $2,675 million. This was mainly due to the better operating performance (+$36 million), a net interest income versus net finance charges a year before (+$215 million), lower tax expense (+$132 million)3, and a share of profits versus a share of losses of associated companies from the previous year (+$104 million).
SECOND HALF FY2023/24 – PROFIT AND LOSS
Second half Group revenue rose by $492 million (+5.3%) year-on-year to $9,850 million, marking a record for the Group’s half-yearly revenue. This was driven by a $749 million (+10.1%) increase in passenger flown revenue on the back of a 17.5% growth in traffic, which was slightly below the 17.7% expansion in capacity. The Group PLF remained almost flat at 87.3% (-0.1 percentage point). Passenger yields declined 6.0% on intensifying competition as other airlines progressively restored capacity.
Cargo revenue fell $446 million (-29.7%), with yields declining (-35.9%) amid the recovery in bellyhold cargo capacity. This was partly offset by an increase in loads (+9.7%) due to robust e-commerce flows. The demand for air freight from Asia was also supported by security concerns in the Red Sea, bolstering the overall cargo performance.
Expenditure grew $776 million (+9.8%), consisting of a $496 million increase (+9.2%) in non-fuel expenditure and a $280 million increase (+11.1%) in net fuel cost. Net fuel cost increased to $2,794 million, mainly due to higher volume uplifted (+$365 million) and lower fuel hedging gain (+$185 million), and partially offset by a 6.8% drop in fuel prices (-$219 million).
In the second half, the Group operating profit decreased by $284 million (-19.5%) from the previous year to $1,174 million. The Group net profit was stable, rising $4 million year-on-year to $1,234 million. This was mainly driven by a lower tax expense (+$249 million) and a surplus on disposal of aircraft, spares, and spare engines versus a loss the year before (+$45 million), which offset the decline in operating performance.
Balance Sheet
As of 31 March 2024, the Group shareholders’ equity was $16.3 billion, down $3.5 billion from 31 March 2023. This was due to the partial redemption in June and December 2023 of the June 2021 Mandatory Convertible Bonds (MCBs) for $5.1 billion, including accrued yield. Total debt balances decreased by $1.9 billion to $13.4 billion, mainly due to the repayment of borrowings. As a result, the Group’s debt-equity ratio increased from 0.77 times to 0.82 times.
Cash and bank balances decreased by $5.1 billion to $11.3 billion, arising from the redemption of the MCBs, repayment of borrowings, and payment of dividends. This was mitigated by the $5.1 billion of net cash generated from operations, which included proceeds from forward sales. On top of the cash on hand, the Group has access to $2.9 billion of committed lines of credit, all of which remain untapped at present.
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