Singapore

SIA reports full-year net loss of $212m

This article is more than 12 months old

The sudden halt to global travel hit Singapore Airlines in the fourth quarter and left it in the red for the year, it reported yesterday.

It recorded a net loss of $732.4 million in the three months to March 31, a stark reversal of the $202.6 million profit in the same period last year.

Revenue was hammered as well, falling 22 per cent to $3.2 billion.

Full-year net loss came in at $212 million, down from earnings of $683 million in the previous year, on turnover of $16 billion, a fall of 2.1 per cent.

Operating profit for the year fell 94.5 per cent to $59 million, down from $1.07 billion.

The airline has set up an internal task force "to review all aspects of our operations" so that it will be ready to ramp up when air travel is out of the doldrums.

"This includes any modifications to our in-flight products and end-to-end service delivery to provide additional health and safety assurances to our customers and our crew," said SIA yesterday.

The sudden turn in fortunes came in the last quarter - the group had in fact racked up a strong performance in the preceding nine months, driven by robust passenger traffic numbers and business transformation initiatives.

But once fears about the virus took hold, passenger traffic declined sharply.

As a result, it swung into an operating loss of $830 million in the fourth quarter, a reversal from the $253 million profit a year earlier.

Fuel prices also plunged unexpectedly in the fourth quarter amid the oil price war between Saudi Arabia and Russia, which led to a supply glut.

This led to $198 million in fuel hedging losses for SIA.

OVER-HEDGED

Furthermore, the expected capacity cuts in the new financial year will mean lower fuel consumption than anticipated, causing the group to be in an over-hedged position.

SIA is undertaking a rights issue to raise gross proceeds of $8.8 billion through the sale of rights shares and rights mandatory convertible bonds. It can also issue up to an additional $6.2 billion through additional mandatory convertible bonds.

SIA shares hit a 30-year low of $3.74 ahead of yesterday's results before closing down 4.75 per cent at $3.81. - THE STRAITS TIMES

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