First year of transformation programme sees 70% improvement in operating profit, 148% increase in net profit.
In the first year of its three-year transformation programme, SIA Group reported a net profit of $893m for the 2017/18 financial year ending 31st March, an increase of $533m, or 148.1%, from the same period last year.
The increase was mainly attributable to a higher operating profit (+$434m), absence of SIA Cargo’s provision for competition-related matters (+$132m) and impairment of the Tigerair brand and trademarks (+$98m) last year, partially offset by the absence of SIA Engineering’s gain on divestment of its 10.0% stake in Hong Kong Aero Engines Services Ltd (HAESL) and special dividends received from HAESL (-$178m).
Operating profit for the Group soared 69.7%, to $1,1bn, on revenue of $15.8bn (+6.3%), with revenue improvements in all business segments. Passenger flown revenue rose $428m (3.6%), as traffic growth (+6.3%) outpaced the decline in passenger yield (-3.1%). Cargo revenue was up $266m on higher freight carriage (+5.3%) and yield (+8.9%).
Engineering services revenue grew $52m (+12.0%), largely attributable to line maintenance activities.
SIA also announced that its regional wing, SilkAir, is to undergo a significant investment programme to upgrade its cabin products as part of a multi-year initiative that will ultimately see it merged into SIA.
The programme will comprise investment of more than $100m to upgrade cabins with new lie-flat seats in Business Class, and the installation of seat-back in-flight entertainment systems in both Business Class and Economy Class. Aircraft cabin upgrades are expected to start in 2020.
The move follows the re-integration of SIA Cargo into the parent airline company on 1st April.
SIA says that the next two years of the transformation programme will focus on enhancements to the customer experience, revenue growth and improvements in operational efficiency.