Singapore Airlines Q1 profit falls 59% as oil price rise, lower airfares bite

Singapore Airlines reported a 59% fall in Q1 net profit, below analyst expectations, Thursday due to a rise in the oil price, lower airfares and a lack of one-off items that had boosted the prior year. The carrier earned S$140m in the three months ended June 30, down from a revised figure of S$338m a year before, it said in a stock exchange filing. The prior-year figure was restated due to accounting changes and had included S$175m of one-off benefits from changes to its frequent flyer programme accounting and compensation for aircraft delivery slots. Maybank had forecast a net profit of S$251m for Q1, based on yields, a proxy for airfares, rising by 5.5%. SIA said yields fell by 3.2% during the quarter, bucking a broader global industry trend toward rising yields. The figure was dragged down by a 10.3% decline at regional arm SilkAir. Group revenues fell 0.5% to S$3.84b during the quarter, with cargo and passenger revenues rising but not by enough to cover the lack of one-off items from the prior year. SIA said passenger traffic was expected to grow in the coming months, but costs remained under pressure, especially from higher fuel prices.<br/>