SIA's full-year net profit tumbles 80% to S$215.8m

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Singapore Airlines (SIA) posted a 80% fall in its full-year group net profit to S$215.8 million ($153.4 million), maintaining its record of full-year profitability despite two loss-making quarters in the fiscal year.

Revenues declined 21% to S$12.7 billion for the year ended 31 March, says the Star Alliance carrier. Total expenditure fell 16% to S$12.6 billion.

Its operating profit tumbled 93% to S$63.2 million, says SIA.

In its fiscal fourth quarter, the airline's net profit surged 563% to S$278 million from the corresponding quarter a year ago.

Revenues in the quarter remained flat, growing 0.4% to S$3.3 billion. Expenditure fell 8% to S$3 billion, says the carrier.

"Expenditure on fuel increased S$220 million owing to higher jet fuel prices. However, this was offset by a reduction of S$524 million in hedging losses," it adds.

The group posted an operating profit of S$241 million in the quarter, rebounding from an operating loss of S$28 million a year ago.

The parent airline company's operating profit surged to S$159 million, from S$14 million a year ago.

Maintenance, repair and overhaul subsidiary SIA Engineering reported a 52% growth in full-year operating profit to S$41 million, while regional subsidiary SilkAir posted a 82% surge in operating profit to S$31 million.

SIA Cargo posted an operating profit of S$8 million, reversing from an operating loss of S$123 million a year ago, says SIA.

In terms of passenger traffic, SIA's full-year RPKs fell 8%. Total passenger numbers declined 10% to 16.5 million. Capacity, as measured in ASKs, declined 10%.

As a result, the airline's passenger load factor grew 1.9 percentage points to 78.4%, says the carrier.

Looking ahead, SIA says travel demand looks "encouraging", especially in the premium market.

On the cargo front, recent recovery in volumes are likely to hold up, it adds.

"The sustainability of this improvement depends on developments in the world economy and on business and consumer confidence," it says.

Fuel prices, however, remain a concern. "The group's uplift of jet fuel in financial year 2010-11 is projected to be 33 million barrels. At this point, the intention is to hedge at least a fifth of the required uplift," says SIA.

The airline expects to take delivery of four Airbus A380s in its current fiscal year. It will return one Boeing 747-400 at the end of its lease, sell four 777s and lease out six 777s.

"The resulting increase of one aircraft will bring the company's fleet to a total of 109 aircraft by March 2011. The planned deployment will produce a net growth of 2% in available seat kilometres," it adds.