Wah, SIA Earn So Much Still Profit Drop?! What Happen Ah?

Wah, SIA Earn So Much Still Profit Drop?! What Happen Ah?

Hello, you all aviation kaki! Today, we wanna talk about Singapore Airlines (SIA Group) one Q1 FY25/26 results, lah. From far far away look like very good, record high sales and all. But you go closer look, then you know got some problems hiding inside. So, what's the story, hor?

 

🚀 Sales 'Power', but Profit 'Sian'!

SIA Group this quarter, they hit $4.79 billion in sales, record high, you know! Up 1.5% from last year, mostly thanks to passenger flights. But then, you look at the operating profit, it drop 14.0% to $404.5 million. And the

net profit? Wah, drop 58.8% to $186.1 million only!

How come sales go up, but profit go down? Very weird, right?

📉 Who Make the Profit Drop So Much?

This big drop in profit, got a few reasons, lah.

1. Air India, You Make Me Sian! One big reason is the losses from their associate companies. Especially Air India, it really hit their profit hard. Last year, they actually earned from these companies, but this quarter, kena $121.6 million loss! That one really pull down the profit, lor.
2. Last Year Got 'Bonus', This Year No More! Another big thing is that last year got a one-off accounting gain from selling Vistara, like a big bonus of $1.09 billion. This year, no more this bonus, so when you compare, the profit looks super low, like got optical illusion, mah.
3. Non-Fuel Costs 'Chiong' Up, Eat My Profit! Even though fuel prices drop, their total spending still go up 3.2%. Why? Because
4. non-fuel costs jump 8.5%! Things like depreciation, plane rental, handling fees, all go up because of inflation and they fly more planes. So, the money saved from fuel, all gone because of these other costs, then operating profit drop.
5. Interest Money Also Gone! Last year, they got interest income, but this quarter, they kena $52.9 million in net interest expense. That also eat into the profit, lah.

✈️ Still Got Hope, Leh!

Even though things look a bit sian, SIA Group still got some good points, you know.

• Full Planes: Their passenger load factor (PLF) is still very high, 87.6%! Means their planes are very full, people still wanna fly with them. Good sign, hor.
• Money Still Solid: They cut down a lot of debt and still got good cash in hand. So, financially, they still quite strong, can tahan the challenges.
• Asia Market 'Power': IATA (the airline big boss association) say Asia Pacific region's air travel demand will grow a lot in 2025. Since SIA is very strong in Asia, this is a good chance for them!

💡 So, What Next Ah?

For SIA Group to fly high again and make more profit, they need to do a few things:

• Control Non-Fuel Costs: Must find ways to cut down those non-fuel costs that keep going up because of inflation and more flights.
• Manage Yields Better: With more competition, ticket prices might drop. So, they need smarter ways to manage prices, maybe offer more premium services or optimize routes to earn more per passenger.
• Review Associate Investments: If Air India and other associate companies keep losing money, SIA needs to seriously look at what to do with them.

This quarter's results show that after the big rebound from COVID, the airline industry is now facing a more realistic and challenging market. Can SIA Group overcome these headwinds and fly back to high profits? We all wait and see, lah!

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Hope this Singlish summary helps you understand better, hor! Any more questions, just ask, can?