Singapore Airlines 2005 Annual Report Download - page 58

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Financial Review
56 SIA Annual Report 04/05
CC
฀MOD: CN1323
M Y
C K
While every effort has been taken to carry out instruction to customers satisfaction
NO RESPONSIBILITY liablilty will be accepted for errors
CUSTOMERS ARE THEREFOREURGED TO CHECK THOROUGHLY BEFORE
AUTHORISING PRINTRUNS
DALIM
1 2 3 4 5 6 7 8 9 10 OK TS
CC196777 DLMAC13 10.06.2005 150#
1
Performance of Subsidiary Companies (continued)
Singapore Airlines Cargo (continued)
SIA Cargo generated an operating profit of $263 million, 30.2 per cent higher (+$61 million) from a year ago. Higher
revenue (+$463 million) from increased loads (+8.6 per cent) and yield improvement (+8.5 per cent), and cost management
contributed to the strong operating performance. Profit after taxation was $184 million, after accounting for net interest
costs of $20 million and provision for tax of $62 million. Higher provision for tax and nil tax write-back this financial year
(there was a $27 million tax write-back due to reduction in the Singapore statutory tax rate last year) diluted the increase in
profit after tax (+4.5%).
Expenditure rose 18.3% (+$402 million) more than the 13.7% growth in capacity due mainly to significantly higher fuel
costs (+$128 million) and increased staff costs (+$33 million).
Load factor fell to 63.5 per cent (-3.0 percentage points) as load increase fell short of the 13.7% capacity increase. However,
breakeven load factor improved by 2.9 percentage points to 59.3 per cent due to the significant yield increase.
Shareholders’ funds as at 31 March 2005 stood at $1,787 million, while total assets reached $3,415 million.
During the year, SIA Cargo expanded its operating fleet by one B747-400 freighter to a total of 14 B747-400 freighters.
Capital expenditure for the year of $359 million was primarily for the delivery payment for one B747-400 freighter and
progress payments for firm aircraft orders.
SilkAir
2004-05 2003-04
$ million $ million % Change
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total revenue 294.2 226.8 + 29.7
Total expenditure 270.6 210.8 + 28.4
Operating profit 23.6 16.0 + 47.5
Profit after taxation 30.6 15.7 + 94.9
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
SilkAir’s revenue grew $67 million (+29.7 per cent) to $294 million as a result of increased load (+28.0 per cent) and better
yield (+2.1 per cent). The increase in expenditure (+$60 million) was mainly due to higher fuel costs, payroll costs, handling
charges, and airport charges. As a result, operating profit improved by 47.5 per cent (+$8 million). Surplus on disposal of
aircraft, spares and other fixed assets ($16 million) also contributed to the 94.9 per cent increase in profit after tax.
Unit cost rose 1.5 per cent to 66.7 cents/ctk. Yield improved 2.1 per cent to 134.4 cents/ltk. Consequently, breakeven load
factor was slightly better by 0.3 percentage point at 49.6 per cent.
Shareholders’ funds was $357 million (+9.4 per cent) at 31 March 2005.
Capital expenditure for the year of $73 million was mainly for delivery payment for one A320 aircraft, and pre-delivery
payments for two A320 and two A319 aircraft, scheduled for delivery between 2005 to 2007.
SilkAir’s route network spanned 25 cities in 10 Asian countries. During the financial year, SilkAir added 3 new destinations
– Chongqing (China), Da Nang (Vietnam), and Kuching (Malaysia), and terminated its service to Macau and Krabi. Flight
frequencies to Phuket and China destinations were reduced, and operations to Padang were suspended as a result of the
adverse impact of the Asia tsunami. The airline plans to increase flight frequencies to Phuket, Davao, Kochi, Manado and
Yangon, and resume its twice-weekly service to Padang in 2005-06.