Shares of the SGX-listed Singapore Airlines Limited (SG:C6L), or SIA, plunged by over 9% after it reported Fiscal Q3 numbers that disappointed investors and analysts. The airlines delivered some strong metrics but expressed concerns over rising costs and fierce competition in the industry.
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SIA is a leading global airline and Singapore’s flagship carrier that operates a network of about 107 destinations worldwide.
SIA’s Q3 Performance
Singapore Airlines generated a quarterly revenue of S$5.08 billion, driven by strong passenger demand, especially in North Asia. SIA saw a 4.9% year-on-year rise in Q3 FY23/24 net profit, reaching S$659 million. Lower taxes helped offset the impact of higher expenses on the bottom line. However, the Q3 FY23/24 net profit fell short of the consensus estimate by 15% and declined sequentially for the second consecutive quarter.
Singapore Airlines’ expenditure for the Fiscal third quarter rose 9.3% year-on-year to S$4.47 billion. The airlines further stated that competitive pressure impacted passenger yields as airlines worldwide expanded their flight frequencies and routes to accommodate growing travel demands.
For the full nine months of the fiscal year, there was a 35% year-on-year increase in net profit to S$2.1 billion.
Is Singapore Airlines a Buy or Sell?
Following the results, CLSA analyst Jeffrey Kiang reiterated a Sell rating on C6L stock with a price target of S$6.80.
According to TipRanks consensus, C6L stock has received a Hold rating based on one Sell, one Hold, and one Buy recommendation. The SIA share price target is S$7.18, which is 2.6% below the current price level.
