SIA Group Q1 FY2019-20 Results 1 August 2019 Slide 1 Slide 1
SIA Group – Q1 FY19/20 Key Takeaways Passenger traffic growth drove improvements in overall RASK and revenue – SIA Pax: Captured strong demand, outstripping growth in capacity to achieve record passenger load factor. RASK improved 2.4%. – MI: Performance significantly impacted by 737 MAX 8 grounding – Scoot: Capacity growth matched by passenger traffic improvement. RASK declined 2.1%, on lower yields. – Cargo: Cargo flown revenue declined due to weaker demand amid trade uncertainties. Grounding of 737 MAX 8 fleet slows expansion Net fuel cost rose, led by an increase in volume uplifted on capacity expansion and a stronger US dollar. Benefitted from fuel hedging gains. Slide 2 Slide 2
SIA Group Financial Results Q1 FY19/20 Q1 FY18/19 Better/ ($’M) ($’M) (Worse) (%) Total Revenue 4,102.2 3,844.5 6.7 Total Expenditure 3,902.2 3,651.4 (6.9) - Net Fuel Cost 1,172.7 1,079.4 (8.6) Fuel cost 1,229.8 1,211.6 (1.5) Fuel hedging gain (57.1) (132.2) (56.8) - Non-fuel expenditure 2,729.5 2,572.0 (6.1) Operating Profit 200.0 193.1 3.6 - Operating Profit Margin 4.9 5.0 (0.1) pt Group Profit Attributable to Owners of the Parent 111.1 139.6 (20.4) - Basic Earnings Per Share 9.4 11.8 (20.3) Slide 3 Slide 3
Pax traffic growth across all airlines; record Q1 PLF for SIA Q1 Change (%) FY19/20 Revenue Passenger-KM (M) 26,628.3 9.0 SIA (Passenger) Available Seat-KM (M) 32,002.7 7.4 Passenger Load Factor (%) 83.2 1.2 pts Revenue Passenger-KM (M) 2,302.1 2.4 SilkAir Available Seat-KM (M) 2,949.5 (1.6) Passenger Load Factor (%) 78.1 3.1 pts Revenue Passenger-KM (M) 7,410.3 6.5 Scoot Available Seat-KM (M) 8,607.0 6.5 Passenger Load Factor (%) 86.1 - Cargo Load Tonne-KM (M) 1,645.4 (4.4) SIA (Cargo) Cargo Capacity Tonne-KM (M) 2,805.1 0.1 Cargo Load Factor (%) 58.7 (2.7) pts Slide 4 Slide 4
Group revenue improvement led by strong pax flown revenue Group Revenue $M 4,400 4,341.5 4,300 Q1 FY19/20 4,200 $4,102.2M 4,102.2 4,075.1 4,062.1 4,100 4,000 Year-on-Year 3,900 3,844.5 $257.7M 3,800 (+6.7%) 3,700 3,600 3,500 Q1 Q2 Q3 Q4 Q1 FY18/19 FY19/20 Slide 5 Slide 5
Strong pax traffic growth drove improvements in RASK and revenue Pax Flown Revenue Cargo and Mail 3,331.6 488.9 (+270.5, +8.8%) (-44.6, -8.4%) 81.2% 11.9% Engineering Services 127.2 (+17.9, +16.4%) Other Pax Revenue 83.7 (-7.9, -8.6%) Others 70.8 (+21.8, +44.5%) Flown Revenue RASK Yields Carriage/Load Capacity Q1 FY19/20 y-o- y ($’M) y-o-y (%) y-o-y (%) y-o-y (%) y-o-y (%) SIA (Pax) +258.4 +2.4 +1.0 +9.0 +7.4 SilkAir -1.5 +1.3 -2.9 +2.4 -1.6 Scoot +14.0 -2.1 -1.8 +6.5 +6.5 SIA (Cargo) -44.6 n.a. -4.2 -4.4 +0.1 Slide 6 Slide 6
Group expenditure increased on expansion Group Expenditure $M 4,000 3,953.9 3,902.2 3,900 Q1 FY19/20 3,829.2 3,821.6 $3,902.2M 3,800 3,700 3,651.4 Year-on-Year 3,600 $250.8M 3,500 (+6.9%) 3,400 3,300 Q1 Q2 Q3 Q4 Q1 FY18/19 FY19/20 Slide 7 Slide 7
Ex-fuel costs rose largely from expansion of operations Depreciation and AMO Costs Handling Charges Leased Aircraft 218.6 334.1 Charges (-36.1, -14.2%) (+5.2, +1.6%) 526.4 (+33.9, +6.9%) LPO* Charges 5.6% 13.5% 233.2 Staff Cost 8.6% 11.9% 81.2% (+17.3, +8.0%) 747.9 6.0% 19.2% (+90.3, +13.7%) 4.9% Passenger Costs 191.3 12.2% (+14.6, +8.3%) 30.0% Fuel Cost Post Hedging Others 1,172.7 478.0 (+93.3, +8.6%) (+32.3, +7.2%) *Landing, Parking and Overflying CASK CASK ex-fuel Q1 FY19/20 y-o-y (%) y-o-y (%) SIA (Pax) +1.2 +1.9 SilkAir +6.1 +4.8 Scoot +3.9 +5.9 Slide 8 Slide 8
Higher group fuel cost led by increase in volume uplifted on capacity expansion and stronger USD; benefited from fuel hedging gains Composition of Increase in Net Fuel Cost $M 1,200 +32.9 1,172.7 +69.7 1,150 +93.3 Stronger (+8.6%) USD 1,100 against -84.4 1,079.4 +75.1 SGD Higher 1,050 uplift 1,000 Lower Lower hedging weighted gain 950 average fuel price 900 Q1 Price Hedging Volume Exchange Q1 FY18/19 FY19/20 Slide 9 Slide 9
Group operating profit improved against last year Group Operating Profit $M 500 387.6 Q1 FY19/20 400 $200.0M 300 253.5 232.9 Year-on-Year 193.1 200.0 200 $6.9M (+3.6%) 100 0 Q1 Q2 Q3 Q4 Q1 FY18/19 FY19/20 Slide 10 Slide 10
Strong revenue growth outpaced expenditure increase Composition of Change in Group Operating Profit $M Largely: 500 • Staff costs (+90.3) +270.5 -44.6 • Depreciation & leased aircraft +17.9 -93.3 450 charges (+33.9) • Landing, parking & overflying Higher 400 Lower (+17.3) engineering cargo -157.5 revenue flown 350 revenue Higher 300 net fuel costs 250 +13.9 200.0 193.1 +6.9 200 (+3.6%) Higher Higher 150 pax ex-fuel flown costs 100 revenue 50 0 Q1 Pax flown Cargo Engineering Net fuel Ex-fuel Others Q1 FY18/19 rev flown rev rev costs costs FY19/20 Slide 11 Slide 11
Operating results for main companies in the Group Better/ Better/ Q1 FY19/20 Q1 FY18/19 (Worse) (Worse) ($’M) ($’M) ($’M) (%) SIA 232.0 180.8 51.2 28.3 (Parent Airline Company) SilkAir (15.9) 0.2 (16.1) n.m. Scoot (37.5) 1.1 (38.6) n.m. SIAEC Group 17.7 10.2 7.5 73.5 Slide 12 Slide 12
Parent Airline Company’s operating profit improved on strong revenue growth Composition of Change in Parent Airline Company’s Operating Profit $M 500 +258.4 Other major items include: -44.6 450 Higher ASC (-33.3) • Higher sales costs (-18.7) • -81.0 400 Higher LPO (-16.1) • Lower Higher passenger costs (-14.1) • cargo Lower AMO costs (+42.4) 350 • -79.6 FX/reval gains vs losses last year (+24.1) flown • Non-scheduled services revenue (+21.9) • revenue 300 Higher net fuel -2.0 232.0 250 cost +51.2 Higher 180.8 200 (+28.3%) staff Higher cost 150 pax flown 100 revenue 50 0 Q1 Pax Flown Cargo Net fuel Staff costs Others Q1 FY18/19 Revenue Flown cost FY19/20 Revenue Slide 13 Slide 13
SilkAir significantly impacted by MAX 8 grounding Composition of Change in SilkAir’s Operating Profit $M 5 0.2 -9.8 0 (5) (16.1) (10) (n.m.) Lower pax -1.8 (15) flown revenue -4.5 -15.9 Higher and other (20) net fuel Higher revenue cost ex-fuel (25) costs (30) (35) (40) (45) (50) Q1 FY18/19 Revenue Fuel costs Ex-fuel costs Q1 FY19/20 Slide 14 Slide 14
Scoot’s capacity growth matched by pax traffic improvement Composition of Change in Scoot’s Operating Profit $M 20 +14.0 -10.5 Mainly: Higher passenger costs (+3.3) • 10 Higher handling costs (+2.7) • -10.5 Higher crew allowance (+2.7) • 1.1 Higher LPO (+2.2) • 0 Higher Lower -11.7 pax flown other revenue revenue (10) Higher net fuel -38.6 -14.1 cost (n.m.) (20) Higher ex-fuel variable (30) costs -4.5 -1.3 Higher dep & -37.5 (40) Higher lease staff aircraft costs charges (50) Q1 Pax flown Other rev Fuel costs Ex-fuel A/c Staff cost Others Q1 FY18/19 rev variable standing FY19/20 costs charges Slide 15 Slide 15
Lower Group net profit on share of assoc losses and higher net finance charges Group Profit Attributable to Owners of the Parent $M 300 284.1 250 Q1 FY19/20 $111.1M 202.6 200 139.6 150 Year-on-Year 111.1 $28.5M 100 (-20.4%) 56.4 50 0 Q1 Q2 Q3 Q4 Q1 FY18/19 FY19/20 Slide 16 Slide 16
Lower Group net profit on share of assoc losses and higher net finance charges Composition of Change in Group Net Profit $M 150 +6.9 139.6 140 Higher operating 130 profit +8.6 -28.5 (-20.4%) 120 +5.2 111.1 -31.2 Higher 110 +7.5 Share of share losses of of assoc vs profits 100 profits of JVs -25.5 last year Lower Higher net taxation 90 finance charges 80 Q1 Operating Associates JVs Net finance Taxation Others Q1 FY18/19 Profit charges FY19/20 Slide 17 Slide 17
Group fuel hedging position Q2 FY19/20 Jet Fuel Brent Percentage hedged (%) 79 - Average hedged price (USD/bbl) 75 - 9M FY19/20 Jet Fuel Brent Percentage hedged (%) 70 5 Average hedged price (USD/bbl) 76 52 FY20/21 to FY24/25 Jet Fuel Brent Percentage hedged (%) Up to 23% Up to 49% Average hedged price (USD/bbl) 77 58-62 Note: Fuel hedging position as at 22 July 2019 Slide 18 Slide 18
Group fleet movement Operating Fleet As at 31 Mar’19 In Out As at 30 Jun ’19 777-200 7 -2 5 777-200ER 5 5 Singapore 777-300 5 5 Airlines 777-300ER 27 27 A380-800 19 19 A330-300 17 -1 16 A350-900 XWB 32 +4 36 787-10 9 +3 12 747-400F 7 7 Total 128 +7 -3 132 A319 2 2 SilkAir A320 8 8 737-800 17 17 Total 27 27 787-8 10 10 787-9 8 +2 10 Scoot A319 1 1 A320 26 26 A320neo 2 2 Total 47 +2 49 GROUP TOTAL 202 +9 -3 208 Note: Excluded 737 MAX 8 in SilkAir’s operating fleet due to grounding Slide 19 Slide 19
THANK YOU SIA GROUP Q1 FY2019-20 Results 1 August 2019 Slide 20 Slide 20
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