MAIN POINTS OF THE GROUP’S PERFORMANCE:
?Operating profit was $510 million (+12.8%)
?Profit before tax was $656 million (+127.9%)
?Tax writeback of $278 million
?Profit attributable to shareholders was $774 million (+473.8%)?Earnings per share was 63.5 cents (+472.1%)
?Shareholders’ funds amounted to $10,481 million (+6.4%)
At the halfway mark in the financial year, SIA Group recorded an
improved operating profit compared with the same period last year. The passenger
airline company and two major subsidiary companies [Singapore Airport Terminal
Services (SATS) Group and SIA Engineering Company (SIAEC) Group] had lower
operating profits, but cargo operations, which turned profitable from a loss a year
ago, contributed to the better results.
Said SIA Deputy Chairman and CEO Dr Cheong Choong Kong:
“We made full use of opportunities presented by a faster-than-expected recovery of
the passenger and cargo markets post-September 11, 2001. Unfortunately, in an
environment teeming with threats of war, whether we can continue to perform at the
same level for the rest of the financial year rests largely on developments beyond our
control. If there is any certainty it is that the SIA team will rise to the occasion.”
Profit attributable to shareholders was $774 million, up 473.8% (+$639
million) over the same period last year. This included a tax writeback of $278
million due to the cut in corporate tax rate from 24.5% last year to 22%. Without the
tax writeback, profit attributable to shareholders would have been $499 million
The Group’s operating profit rose 12.8% (+$58 million) to $510
million. A large part of the improvement was due to cargo operations, which turned
profitable from a loss the year before. Operating profit of the passenger airline
company was $15.4 million lower (-5.7%). Two major subsidiary companies - SATS
Group and SIAEC Group - also posted declines of 11.3% (-$16 million) and 16.0%
(-$14 million) respectively. These declines in operating profit were due largely to
provision for profit-sharing bonuses (No such bonuses were paid the year before).
SilkAir contributed a higher profit (+$6 million).
Revenue was up by 10.5% (+$497 million) at $5,229 million.
Expenditure grew 10.3% (+$440 million) to $4,719 million. Higher costs were
incurred on staff, aircraft insurance premium, aircraft maintenance and overhaul,
and aircraft depreciation. A provision for profit-sharing bonus was made (There was
none the previous year).
Passenger carriage increased 4.8%, outpacing a 2.4% expansion in seat
capacity. Passenger load factor improved to 76.8%, up 1.7 percentage points. Cargo
carried grew 22.6% on the back of a 12.9% increase in capacity. Cargo load factor
was 5.5 percentage points better, at 69.5%. Passenger yield declined 1.1%, while
cargo yield was marginally higher by 0.3%.
The Group’s profit before tax was $656 million, up 127.9% or $368
million (The rise would be lower, at 25.0% or +$131 million, if exceptional items are
excluded). The better results were due to:
(i) the surplus on disposal of aircraft, spare engines and spares
which rose $32 million;
(ii) a higher share of profits of associated companies (+$76 million)
principally because the Group no longer equity accounts the
financial results of Air New Zealand (Air NZ). Increased
contribution also came from Eagle Services Asia and Virgin
Atlantic Limited; and
(iii) a provision of $267 million in the previous year for diminution
in value of the investment in Air NZ.
The Group’s basic earnings per share rose 52.4 cents (+472.1%) to 63.5
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