Singapore Airlines 2001 Annual Report Download - page 35

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EARNINGS
The Group’s operating profit for financial year 2000-01 was $178 million (+15.2% ) higher at $1,347 million. The operating profit of the
Company increased by $128 million (+15.0% ) from 1999-00, to $983 million. Revenue increased by $889 million (+10.7% ) to $9,230
million, while expenditure grew $760 million (+10.2% ) to $8,246 million, mainly from the escalation in fuel costs (+$630 million or
49.4% ). The rising fuel prices were mitigated by higher yields, fuel hedging programme and a young fuel-efficient aircraft fleet. The full
year results would have been better if not for the slowdown in the US economy and a downturn in global electronics demand in the
second half of the financial year.
The Company’s profit before tax was $1,607 million, down $34 million (-2.1% ) after the inclusion of:-
(i) higher interest on borrowings amounting to $44 million;
(ii) a surplus of $166 million from the sale and leaseback of two B747-400, the disposal of one B747-400 passenger aircraft, the trade-
in of one A310-200 and four B747-300 passenger aircraft, the sale and leaseback of six A340-300 spare engines, and the sale of
spares and other spare engines;
(iii) lower gross dividends from subsidiaries and associated companies of $60 million [Singapore Airport Terminal Services Limited (SATS)
and SIA Engineering Company (SIAEC) did not pay a final dividend for financial year 1999-00, but a special dividend was paid in
March 2000 totalling $371 million as part of a capital restructuring prior to their initial public offerings (IPOs) on 5 May 2000];
(iv) a profit of $575 million on disposal of vendor shares representing 13.0% equity interests in SATS and SIAEC (At Group level, the
profit amounted to $440 million after deducting 13.0% of the net tangible assets of SATS and SIAEC as at 5 May 2000 from the
net proceeds of sale); and
(v) a provision of $132 million to pay an ex-gratia bonus to employees in view of the 33.1% improvement in the Group’s profit
attributable to shareholders.
Profit after taxation rose $73 million (+5.7% ) to $1,340 million as provision for taxation dropped $107 million (-28.6% ) on account of
lower chargeable income, since capital gains on disposal of vendor shares are not taxable in 2000-01. If the profit from the IPOs and
the ex-gratia bonus payment in 2000-01, and the profit from the sale of investments in DL, SR and Equant N.V. and the special dividend
received in 1999-00 were excluded, profit after tax would have increased by a lower amount of $43 million (+5.2% ) to $865 million
after tax.
The operating profit of the subsidiaries went up by $38 million (+12.4% ) to $343 million. This was mainly attributable to higher profits
of SIAEC Group (+$25 million), SATS Group (+$13 million), and profit achieved by Auspice ($17 million) against a loss incurred ($15
million) last year, partially offset by lower profit (-$34 million) from Sing-Bi Funds and higher loss (-$2 million) by SilkAir. Profit after tax
of the subsidiaries fell $158 million (-33.5% ) to $314 million as last year’s profit included SIAEC’s recognition of a $203 million profit
(deferred from 1998-99) arising from the sale of 51% equity in ESA to Pratt and Whitney Holdings LLC.
33 SIA annual report 00/01
Financial Review
■■■ Group
■■■ Company
■■■ Provision for Taxation
2,000
1,500
1,000
500
0
2,000
1,500
1,000
500
0
Profit Before and After Tax
$ Million
$ Million
1996/97 1997/98 1998/99 1999/00 2000/01