Singapore Airlines' net cash grows to over $5bln

Continued improvement in passenger yield (+15%yoy, +3% qoq) was the key growth driver for the flag carrier’s 58% yoy jump in operating profit for 3Q11.

In a statement, DBS Bank said the airline’s profit was also bolstered by positive performances from SIA Engineering (+55% to S$34m), SIA Cargo (+20% to S$48m) and Silkair (+96% to S$45m).

“While overall carriage only rose 2.3%, overall yield improvement of 10.5% helped improve margins significantly,” the bank said.

SIA also reported PATMI for the same quarter of S$288m includesS$199m of fines on SIA Cargo, offset by recognition of S$45m in liquidated damages.

DBS said that SIA, whose balance sheet has improved to a net cash position of over S$5bn (over S$7bn gross cash), has a number of options to enhance shareholder value now that it is awash with cash.

“In order to improve its ROE (projected to be around 9%-10% in FY11/12), and enhance its shareholder value, we believe SIA could embark on one or more of the following : increase dividend payout to FY07 and FY08 levels of S$1 per share, [and/or] embark on a capital reduction exercise (as in FY08).”

The bank also suggested that SIA could acquire a stake in another airline that could boost its earnings over the medium to long term, and mentioned investing in China Eastern Airlines as a possible venture.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia