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SIA Annual Report 01/02 33
Financial Review
Group Revenue and Expenditure
$ Million
$ Million
1997/98 1998/99 1999/00 2000/01 2001/02
Revenue
Expenditure
10,000
8,000
6,000
4,000
2,000
0
10,000
8,000
6,000
4,000
2,000
0
Group Operating Profit, Profit Before Tax
and Profit Attributable to Shareholders
$ Million
$ Million
1997/98 1998/99 1999/00 2000/01 2001/02
Profit Before Tax
Profit Attributable to Shareholders
Operating Profit
2,000
1,500
1,000
500
2,000
1,500
1,000
500
Group Earnings
The Group’s performance for financial year 2001-02 was adversely affected by a slowdown in the global economy and the worsening
slump in electronics demand, made worse by the terrorist attacks in the US on 11 September 2001. The Group’s operating profit
dropped 27.0% (–$363 million) from the previous year to $983 million. Revenue declined 5.1% (–$504 million) to $9,448 million.
Expenditure was 1.6% lower (–$140 million) at $8,464 million. Staff costs were mainly lower because no provision for profit sharing
bonus has been made, whereas a bonus equivalent to 4.54 months of salary amounting to $390 million, and an ex–gratia payment of
$135 million, were paid last year. Expenditure was also reduced by $275 million from a change in aircraft depreciation rate (SIA : $265
million, SilkAir : $10 million). Despite the aftermath of September 11 with ensuing drop in loads in the months of October to December
2001, the Group’s second half operating profit rose 2.9% (+$14 million) over the first half. This was primarily due to recovery in loads in
the final three months, savings from lower fuel costs, wage cuts and other cost reduction measures implemented after September 11,
and better results from SilkAir and SIA Engineering Company (SIAEC) Group.
The fall in Group operating profit came mainly from poorer performance by the Company (–$426 million) and Singapore Airlines Cargo
(–$82 million; Singapore Airlines Cargo was incorporated as a wholly owned subsidiary on 1 July 2001). SIAEC Group and Singapore
Airport Terminal Services (SATS) Group did better with higher profit of $87 million and $72 million respectively. SilkAir, helped by the
change in aircraft depreciation rate, made an operating profit of $17 million compared to a loss of $6 million the year before.
The Group’s profit before tax was $926 million, down 51.4% (–$979 million). Apart from the decline in operating profit, the drop was
also attributable to:
(i) lower surplus on disposal of aircraft, spare engines and spares (–$115 million);
(ii) share of losses of associated companies of $66 million (versus share of profit of $82 million in the previous year), mostly from Air
New Zealand and Virgin Atlantic ;
(iii) a provision of $267 million for diminution in value of investment in Air New Zealand following the release of its results for the financial
year ended 30 June 2001, and further losses arising from the closure of its wholly owned subsidiary, Ansett Australia; and
(iv) the profit of $440 million from sale of 13.0% vendor shares in SATS and SIAEC in the previous financial year (on 5 May 2000).