SINGAPORE (Thomson Financial) - Singapore Airlines said Wednesday its first quarter to June net profit fell to 424.1 million Singapore dollars from 575.1 million a year ago in the absence of exceptional gains.
The quarterly earnings from the previous year was inflated by exceptional gains from the sale of SIA's office building.
However, the net profit was better than the 300-357 million dollar forecast by two analysts polled by Thomson Financial.
Operating profit rose 69 percent year-on-year to 463.3 million dollars in the three months to June, bolstered by strong passenger traffic and stable cargo load.
Revenue was up 5.9 percent from a year earlier at 3.62 billion dollars, a record for the April to June quarter, SIA said.
Fuel prices eased slightly during the period with fuel expenditure, net of hedging, down 4.7 percent year-on-year to 1.17 billion dollars.
'Demand for air travel is expected to remain buoyant in the second quarter, with high forward bookings across all route regions, especially in the premium cabins,' the company said in a statement.
'On the cost side, fuel remains a significant challenge, with price volatility continuing to be a key variable to financial performance,' SIA said.
DBS Vickers Securities analyst Paul Yong said the results were slightly above his expectations but he will maintain current earnings estimates for the flag carrier due to the recent increases in fuel prices.
'Increases in the fuel price is the largest risk factor for SIA. But given this set of good results, we remain confident that the airline can still grow its earnings under a difficult fuel price environment,' Yong said.
(1 US dollar = 1.51 Singapore dollars)
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