Singapore Airlines *Official* (SGX:C6L)

mrclubbie

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SIA's net loss narrows by 63.6% to $409 million in 1QFY22​



Singapore’s national airline, Singapore Airlines (SIA) has reported net losses of $409 million for 1QFY22 ended June 30. This is a 63.6% or $714 million improvement from the $1,123 million loss it had posted the year before.

The losses come as border controls and travel restrictions remained largely in place in the first quarter of the year, despite the heightened rate of Covid-19 vaccinations that were being administered in Singapore and other key markets the group operates in.

Still the improved performance follows a 52.2% y-o-y jump in revenue to $1,295 million due to an increase in both passenger and cargo flights.

The group’s passenger traffic – which is measured in revenue passenger-kilometers – rose to 28% of pre-Covid-19 levels by end June following calibrated increase in passenger capacity.

This translated to a 4.6 percentage point increase in the passenger load factor for 1QFY22 to 14.8% on a y-o-y basis.

Meanwhile, cargo revenue was up 32.4% to $214 million, as the slow resumption in passenger flights saw an increase in cargo capacity (+46.9%) and load carried (+68.2%).

Overall, the cargo load factor was up 11.3 percentage points to 89.1% in 1QFY22, while yields moderated from the exceptionally high levels seen during the same period last year.

This reflects healthy demand fundamentals and an ongoing capacity crunch in the sector, SIA notes in its results filing on July 29.

The airline ended the quarter with 115 passenger aircraft and seven freighters in operation. Its low-cost budget airline Scoot, had an operating fleet of 49 passenger aircraft.

The company’s passenger network covered 63 destinations including Singapore, up from 60 compared to the previous quarter. Of this, SIA served 49 destinations while Scoot covered 24 points.

The Group’s cargo network comprised 76 destinations including Singapore, up from 72 as at the end of the prior quarter.

1QFY22 saw SIA’s expenditure fall by 16.9% to $1,569 million. This was despite a 132.3% increase in the net fuel cost $360 million that was mainly due to higher fuel prices as well as in increase in the volume uplifted in tandem with the capacity expansion.

In this time, the fuel hedging gains came in at $13 million, up from losses of $71 million in 1QFY21 ended June 30 2020. Market-to-market gains of $72 million were also recognised on ineffective fuel hedges, a reversal from the $464 million in losses recognised in the previous year.

Conversely, non-fuel expenditure came in at $1,281 million, up 0.9% from the year before due to the higher costs that came with the increased flying activities. These were partially mitigated by lower depreciation costs as surplus aircraft were removed from the fleet.

Overall, SIA’s operating losses came in at $274 million, improving from the $1,037 logged last year.

As at 1QFY22, the group has completed its rights issuance which raked in $6.2 billion in additional liquidity. This brings its total amount raised to $21.6 billion since 1 Apr 2020.

SIA ended 1QFY22 with shareholders’ equity of $22.3 billion as well as a $5.9 billion increase in cash and bank balances to $13.7 million thanks to the rights issuances.

In this time, the group’s total debt balance increased by $0.7 billion to $15.1 billion, due to the increase in lease liabilities as a result of sale-and-leaseback activities.

Going forward, the group expects passenger capacity to be around 33% of pre-Covid-19 levels in the second quarter of FY2021/22. By end of September 2021, the SIA Group expects to serve around 50% of the points that were part of our passenger network before the onset of Covid-19.

Shares in Singapore Airlines closed up 6 cents or 1.17% at $5.18 on July 29, before its results announcement.


 

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SIA ends monthly variable component wage cuts for all Singapore-based staff​


Additional pay cuts for pilots and senior management will remain, said a Singapore Airlines spokesperson.


SINGAPORE: Singapore Airlines (SIA) has ended the monthly variable component (MVC) wage cuts of its Singapore-based staff, which were cut last year as the company's revenue plunged due to COVID-19.

On Friday (Aug 13), an SIA spokesperson told CNA that the airline has ceased the MVC cuts from Aug 1.

However, the additional pay cuts for pilots will remain, as per an agreement with the Airline Pilots' Association - Singapore (ALPA-S) union in September last year to mitigate further job losses for pilots.

Senior management will also continue to take additional pay cuts to their basic salary - remaining at 15 per cent for senior vice presidents, 20 per cent for executive vice presidents, and 25 per cent for the chief executive officer.

Board members will continue to take a 30 per cent cut in fees in solidarity with the management, said the spokesperson.

STAFF NUMBERS 20% LOWER THAN BEFORE PANDEMIC​


SIA's measures to cut expenditure in response to the COVID-19 pandemic continue to remain in place, including "renegotiating contracts with suppliers, deferring non-critical projects and tight controls on discretionary expenditure".

Staff numbers were 20 per cent lower than pre-COVID-19 levels as a result of various measures taken, said the spokesperson.

These included a hiring freeze, no-pay leave, deeper salary cuts, MVC cuts, voluntary release schemes, and a retrenchment exercise in September last year.

About 4,300 positions were cut across SIA's three airlines - 2,400 employees affected by job cuts and another 1,900 positions eliminated by measures such as a recruitment freeze and early retirement schemes.

"Since the retrenchment exercise, we have experienced higher attrition amongst our ground staff and cabin crew. Our staff have also continued to suffer a reduction in their salary for over one and a half years." said the spokesperson.

"A loss of critical resources and ability will impede our ability to recover, and hinder our efforts to ensure that the SIA Group and Singapore’s aviation sector emerge stronger."

The spokesperson added that SIA must be able to retain its current talent and continue to have the ability to attract and recruit new talent as it recovers.

"We will continue to maintain a tight lid on costs, while being nimble and agile to grab all revenue and growth opportunities in the market. Our current transformation programme will also be key to our future success," the spokesperson said.

"We will also continue to make the necessary investments, both in our people and the business, to ensure that we are in a position to emerge stronger and fitter as international travel recovers."

In March, SIA Group reported a 90.2 per cent year-on-year decline in overall passenger carriage.
 

mrclubbie

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SIA Cargo improves in July, passenger load factor still down​



Singapore Airlines' (SIA) passenger traffic (measured in revenue passenger-kilometres) grew on the back of a calibrated increase in passenger capacity (available seat-kilometres), which rose to around 32% of pre-Covid-19 levels in July 2021. Passenger load factor (PLF) came in at 16.3%, 5.3 percentage points lower than a year before. SIA Cargo registered a monthly cargo load factor (CLF) of 87.2%, up 2.6 percentage points year-on-year as cargo loads (freight tonne-kilometres) rose by 57.9% on the back of a 53.1% capacity (capacity tonne-kilometres) expansion. East Asia, Americas, and West Asia and Africa route regions recorded year-on-year increases in CLF during the month.
 

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SIA reports passenger capacity at 32% of pre-Covid levels in August operating results update​



The Singapore Airlines (SIA) group says its passenger capacity remained steady month-on-month at around 32% of pre-Covid-19 levels.

The group’s passenger traffic grew 7.4%.

Its passenger load factor (PLF) stood 1.3 percentage points lower y-o-y and 1.2 percentage points higher m-o-m at 17.5%.p

The group’s passenger capacity for its flagship airline surged around four times y-o-y to 4,383.8km in August from 1,068.1km in August 2020. The surge was in part attributable to the low base last year.

Passenger carriage, similarly, surged some four times to 133,300 from 32,700 in August 2020.

Its low-cost carrier Scoot saw passenger capacity surge six times to 732.6km from 122.0 km in August 2020.

Passenger carriage grew more than three times y-o-y to 22,100 in August from 7,100 in August 2020.

The group overall saw a five time surge in passenger capacity of 5,116.4km in August from 1,190.1km in August 2020.

SIA Cargo registered a cargo load factor (CLF) of 87.6%, which is 5.8 percentage points up y-o-y.

Cargo loads rose by 56.2% due to a 46% increase in capacity.

SIA’s passenger network covered 67 destinations as at end August, while Scoot served 25 cities.

Shares in SIA closed 6 cents lower or 1.22% at $4.86 on Sept 15.
 

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SINGAPORE Airlines (SIA) on Thursday said that it has exhausted the S$8.8 billion in gross proceeds raised from its rights issue in June last year, with the last S$0.6 billion having been used for aircraft and aircraft-related payments between July 1 and Sept 1.

In a filing to the Singapore Exchange, the flag carrier said that the net proceeds of S$6.2 billion from the issuance of additional mandatory convertible bonds (MCBs) in June this year had yet to be utilised as of Thursday.
 

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SIA's yields likely to remain weak, while cargo still expected to be key earnings driver in 2QFY22: UOB Kay Hian​



UOB Kay Hian analyst K Ajith has maintained his “hold” call on Singapore Airlines (SIA) with an unchanged target price of $4.85.

His target price indicates a valuation of an average book value of 1.15 times for FY2022 and FY2023.

The valuation factors in a recovery in aviation traffic, writes Ajith in a Sept 22 report.

Following the news that the US will open borders to vaccinated travellers from November, the airline’s stock price has risen by 3.5%, notes the analyst.

“The opening up of the transatlantic travel market is the most significant development for international air travel since the start of the pandemic,” he writes.

“This will pave the way for improved connectivity to other destinations. However, much of Asia, including Australia, still operates under travel restrictions,” he adds.

The move by the US will lead to greater pressure on China to ease travel restrictions, as the latter is a key market for air travel.

However, the general opinion is that China may be cautious in easing cross-border travel ahead of the Beijing Winter Olympics held in February 2022.

“Still, the move is a clear boost for international travel and International Air Transport Association (IATA) terms this as “a key shift in managing the risks of Covid-19 from blanket considerations at the national level to assessment of individual risk”,” he says.

In terms of air fares with the formation of vaccinated travel lanes to Brunei and Germany from Singapore, the airlines’ website indicates that there has been no material increase in ticket prices to German cities Munich and Frankfurt compared to pre-pandemic levels.

“The relatively low prices suggest that capacity still exceeds demand and this is likely to be the case over the next two quarters. This is in line with SIA’s own guidance for normalisation of pax yields,” notes the analyst.

Looking ahead, yields are likely to remain weak in the 2QFY2022 and that pax flown revenue may not improve materially, says Ajith.

SIA’s cargo revenue, which surged 21% q-o-q in the 1QFY2022 was the main reason behind the $70 million reduction in operating loss for the period. On this, Ajith says he will still expect cargo to be the airlines’ main earnings driver, which should contribute to a q-o-q reduction in losses.

“While efforts are being made to open up borders, the varying rate of vaccinations, renewed infections and changing regulations mean that the odds of a swift recovery in travel is slim,” he writes.

“For SIA, high yield business traffic could also recover at a slower rate. From a valuation perspective, SIA is

trading at close to 1.2 times FY2022’s adjusted book value, which is 30% higher than pre-pandemic levels,” he adds.

Naturally, a gradual relaxation of travel restrictions has been identified as a key catalyst to SIA’s share price.

Shares in SIA closed 2 cents lower or 0.4% down at $4.95 on Sept 22, or an FY2022 P/B of 0.7 times.
 
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Lai Liao, increase more than 8% within first hour after PM announced vaccine lane on Sat. A great first step for airline. I don't think this time government will revert their decision.
 

wira

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Lai Liao, increase more than 8% within first hour after PM announced vaccine lane on Sat. A great first step for airline. I don't think this time government will revert their decision.
good news for SATS too
 

edwinttt1978

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Fresh VTLs, fresh hopes of recovery.
Fresh hopes of recovery, fat hopes of dividends.

#MakeSIAGreatAgain

 

hmsweethm

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Got a little doubts on MCB. Googled and just want to confirm.
So if SIA not redeems the mcb by 10th year, all the units will be converted to shares right?
So if u have 1000units, it will be 1000 x current stocker exchange value?
 

lzydata

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Got a little doubts on MCB. Googled and just want to confirm.
So if SIA not redeems the mcb by 10th year, all the units will be converted to shares right?
So if u have 1000units, it will be 1000 x current stocker exchange value?
If we assume SIA does not redeem by 2030, there will be massive dilution. Of course it will not be multiplied by the current stock price.
 
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