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Singapore Airlines swings to Q2 profit, restores dividend as travel demand rebounds

Singapore Airlines swings to Q2 profit, restores dividend as travel demand rebounds

A Singapore Airlines plane arriving from Singapore lands at the international terminal at Sydney Airport. (File photo: REUTERS/Loren Elliott)

SINGAPORE: Singapore Airlines (SIA) on Friday (Nov 4) swung to a second-quarter profit and declared its first dividend in three years as international borders reopened and travel demand rebounded strongly in the peak summer period.

The company posted a net profit of S$556.5 million (S$393.20 million) for the three months ended Sep 30, compared with a S$427.6 million loss in the prior year.

It also declared an interim dividend of 10 Singapore cents per share, its first since November 2019 when it declared 8 Singapore cents apiece.

The carrier reported a record quarterly operating profit of S$678 million on a near tripling of its revenue from a year ago to S$4.49 billion.

 

SIA benefited from strong passenger demand over the peak summer period, which led to high ticket prices because there is less capacity available than before the pandemic.

"Demand is expected to be strong as we head into the year-end peak travel season. Forward sales are expected to remain buoyant in the coming months leading up to the Lunar New Year period," SIA said in a statement.

Singapore's flagship carrier, however, warned that cargo demand in the third quarter could be weaker from a year ago as this year's traditional air cargo peak period is expected to be muted.

The airline last month said it would spend S$3.86 billion to redeem convertible bonds issued in 2020 that helped it weather the halt in travel during the pandemic. It was able to do so because of its strong cash balance, the carrier added.

SIA is also in talks with India's Tata Group about a potential merger of Vistara, their joint venture airline, with Air India to give the Singaporean carrier a bigger foothold in South Asia.

SIA's management team will hold an earnings call for analysts and media on Monday.

Source: Reuters/ic
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