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SIA Annual Report 01/02 45
Financial Review
Performance of subsidiaries
As at 31 March 2002, there were 23 subsidiary companies in the SIA Group. The major subsidiaries are Singapore Airport Terminal
Services Limited (SATS), SIA Engineering Company Limited (SIAEC), Singapore Airlines Cargo Private Limited, and SilkAir (Singapore)
Private Limited. The following review of their performances is done before adjusting for inter-company transactions:
Singapore Airport Terminal Services Group
The Group’s profit after tax increased $42.2 million (+24.7%) to $212.8 million. Revenue was up $8.1 million (+0.9%): ground handling
revenue increased $7.8 million (+1.9%); inflight catering revenue dropped $6.1 million (–1.5%); while revenue from other services grew
$6.4 million (+11.3%), mainly from aviation security services rendered. Revenue from inflight catering declined as a result of lower
passenger loads. Expenditure decreased $64 million (–9.2%) to $628.6 million, the result largely of lower staff costs (–$82.3 million or
–20.2%). Staff costs were mainly lower because no provision for profit sharing bonus was made, whereas a bonus equivalent to 4.54
months of salary amounting to $75.8 million was paid the previous year. This is in line with the profit sharing agreement which is based
on profits of the SIA Group and is applicable until the end of financial year 2003-04.
Operating expenditure excluding staff costs increased $18.3 million (+6.4%) because of higher costs associated with the commissioning
of the sixth airfreight terminal (+$14.5 million), and higher insurance costs (+$5 million) as a result of 11 September events. The increase
was offset by lower raw material costs (–$3.4 million).
Profits from overseas operations through associated companies increased $4.8 million (+27.1%) to $22.5 million and represent 8.9% of
the Group’s profit after tax.
The Group’s shareholders’ funds rose $169.0 million (+22.2%) to $930.3 million (last year’s shareholders’ funds were restated because of
new and revised Statement of Accounting Standards). Earnings per share rose 4.2 cents to 21.3 cents and net tangible assets per share
went up 16.1 cents to 92.2 cents as at 31 March 2002.
Capital expenditure was $80.7 million, mainly on the sixth airfreight terminal, second express courier centre, and information technology
systems.
SIA Engineering Group
Notwithstanding the events of September 11 and a downturn in the global airline industry, the Company’s operating profit for the
financial year 2001-02 was $208.9 million, up $86.5 million (+70.6%) from FY 2000-01. Revenue increased $180.0 million (+27.7%)
to $830.9 million. Significant improvement in productivity was achieved from improved allocation of resources and work processes.
Workload increased as a result of additional capacity from the new hangar 3 from October 2001. Expenditure increased at a lower rate
of 17.1% to $627.7 million because of productivity improvements and cost cutting measures. In addition, there were cost savings from
non-payment of profit-sharing bonus, in line with the SIA Group profit-sharing agreement. A payment equivalent to 4.54 months basic
wage ($58.2 million) was made for FY 2000-01.
The Company’s profit before tax was $216.0 million, an increase of $88.6 million (+69.6%). The Company’s profit after tax was
$190.6 million, an increase of $77.1 million (+67.9%).
The Group’s operating profit rose by $87.2 million (+71.4%) to $209.4 million. Profit before tax increased by $123.3 million (+95.4%) to
$252.5 million, assisted by an increase of $38.4 million in share of profits from associated companies and joint venture companies.
16 associated companies and joint ventures in Singapore, China, Hong Kong, Taiwan and Ireland generated about $1.7 billion in
revenue, with 83% derived from airlines outside the Singapore Airlines Group.
The Group’s shareholders’ funds rose 40.8% to $682.7 million (last year’s shareholders’ funds were restated because of new and revised
Statement of Accounting Standards). Return on average shareholders’ funds was 38.2%, an increase of 11.9% points over FY 2000-01.
Basic earnings per share was 22.3 cents, an increase of 92.4% over FY 2000-01.