Singapore Airlines group has reported a 12.8% year-on-year increase for its FY2012/13 net profit, although operating profits fell by 20% owing to continued weakness at its cargo unit.
The Star Alliance carrier earned S$379 million ($302 million) for the 12 months to 31 March, up by S$43 million from a year earlier.
Group revenue was up 1.6% to S$15 billion, an increase of S$240 million, with more passengers carried, albeit at lower yields.
"Promotional activities necessitated by intense competition as well as depreciation of revenue-generating currencies against the Singapore dollar drove passenger yields lower by 4.2%," says the carrier. "Cargo revenue continued to suffer from a contraction in both loads (-6.0%) and yields (-4.3%)."
Group expenditure rose by 2% to S$14.9 billion, owing to rises in fuel (40% of expenditure), staff and other costs.
Lower yields, "persistently high fuel prices" and weak global economic conditions pushed operating profits 20% lower to S$229 million.
Nonetheless, the mainline premium carrier's operating profit rose by S$6 million to S$187 million. Operating profits at SIA engineering fell by $2 million to $128 million, Silkair's operating profit fell by $8 million to $97 million, and SIA Cargo's operating loss widened by S$48 million to S$167 million.
During the fourth quarter, the group earned a net profit of S$68 million compared with a net loss of S$38 million previously, but attributes this to one-off gains from the sale of aircraft, spares, and spare engines.
The group's fourth quarter operating loss was S$44 million, sharply down from its operating loss of S$5 million the previous year.
During FY2012/13, SIA's capacity as measured by ASKs rose by 4.3%, while traffic as measured by RPKs rose by 6.8%. This pushed its load factor 1.9 percentage points higher to 79.3% for the year.
SilkAir's ASKs rose by 20% during the year, but RPKs grew by just 16.9%. Consequently, its load factor fell by 2.1 percentage points to 73.6% for the year.
SIA warns that the global economic outlook will remain challenging.
"Forward passenger bookings for the next few months are almost flat compared to the same period last year," adds SIA. "Yields are likely to remain under pressure amid weak economic sentiment and revenues will be further diluted if key revenue generating currencies continue to depreciate against the Singapore dollar. The cargo business faces an additional issue of overcapacity in the market, which will add pressure on loads and yields. Furthermore, fuel prices remain persistently high."