Singapore Airlines Financial Results FY2011/2012

SIA released its full year results recently for the financial year 1 April 2011 to 31 March 2012 (FY2012).

FY2012 was a challenging year for SIA. Net profit declined 69% from the year before to $336 million due mainly to high fuel prices and uncertain global economy that negatively impacted yield.

Net profits for different financial years were:
FY2007: $ 2,129 m
FY2008: $ 2,049 m
FY2009: $ 1,062 m
FY2010: $ 216 m
FY2011: $ 1,092m
FY2012: $ 336m

The current net profit compares similarly to FY2010 when the global financial crisis hit the airlines then. This time round, economic slowdown from US to Eurozone areas and high fuel prices caused by political turmoil in the Middle East put a dampener to profit of premium long-haul airline that is Singapore Airlines.

Because of better performance in previous financial year FY2011, SIA paid out ordinary dividend of 60 cents and a one-off special dividend of 80 cents. For this financial year, the board proposed 10 cents final dividend. Together with interim dividend of same amount paid out in December, total ordinary dividend for this year will be 20 cents.

Operating Results

In a difficult environment, total revenue still increased by 2.0% to $14,858 million and because total expenditure increased 9.9%, the net profit figure suffered.

2011/12 2010/11 % Change
Total Revenue $ 14,858 m $ 14,524 m + 2.0
Total Expenditure $ 14,571 m $ 13,253 m + 9.9

Financial Position and Ratios

2011/12 2010/11
Return on Equity 2.5% 7.9%
Earnings per share (cts) 28.3 91.4
Ordinary Dividend per share (cts) 20.0 60.0
Special dividend (cts)  — 80.0
Total Debt/Equity (times) 0.08 0.14
Cash and bank balances $ 4,702 m $7,434 m
Net asset value per share ($) $ 10.96 $11.89
Latest share price (cum dividend) $ 10.28
Price to Book (times) 0.93

Return on Equity (ROE) dropped to 2.5%. This was low when compared to 13% to 15% seen in better years. Earnings per share (EPS) was 28.3 cents. Out of this EPS, 20 cents will be distributed as ordinary dividend with a payout ratio of 70%. SIA kept to high dividend payout as seen in previous years. Dividend yield based on latest share price (cum dividend) is 1.94%.

Net asset per share declined to $10.96. With last traded share price (cum dividend) as at 11 May 2012 of $10.28, the Price-to-Book ratio was 0.93 times, which was below book value.

Cash and Bank Balances decreased to $4,702 million from $7,434 million in previous financial year. This is because of dividend payments and repayment of the $900 million fixed rate note in December 2011.

Total debt-to-equity ratio improved from 0.14 times to 0.08 times due mainly to repayment of borrowings. This strengthened the financial position of SIA to ride out the difficult operating environment.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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2 Responses to Singapore Airlines Financial Results FY2011/2012

  1. can I know how you derived your debt/equity and dividend per share?

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