Singapore Airlines Group Analyst/Media Briefing HALF YEAR FY2013-14 14 RESULTS 13 November 2013 THE PARENT AIRLINE 1H FY2013/14 RESULTS
THE PARENT AIRLINE COMPANY RESULTS 2Q & 1H FY13/14 2Q/13 $million Better/ (Worse) $million % 1H/13 $million Better/ (Worse) $million % Total Revenue 3,222 81 2.6 6,382 137 2.2 Total Expenditure 3,125 (68) (2.2) 6,196 (120) (2.0) -Fuel Cost 1,280 (39) (3.2) 2,451 33 1.3 - Fuel Hedging Gain (44) 30 n.m. (9) 19 n.m. -Ex-fuel Cost 1,889 (59) (3.2) 3,754 (172) (4.8) Operating Profit 97 13 15.3 186 17 10.0 Operating Profit Margin (%) 3.0 0.3 pt 2.9 0.2 pt Slide 3 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE 2Q & 1H FY13/14 2Q/13 % Change 1H/13 % Change Available Seat-KM (million) 30,910 +3.2 60,918 +3.4 Revenue Pax-KM (million) 25,064 +4.9 48,462 +3.3 Passenger Load Factor (%) 81.1 +1.3 pts 79.6 - Slide 4
THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE 2Q & 1H FY13/14 2Q/13 % Change 1H/13 % Change Passenger Yield ( /pkm) 11.0-3.5 11.0-3.5 Passenger Unit Cost ( /ask) 9.1-9.1 - Passenger Breakeven Load Factor (%) 82.7 +2.9 pts 82.7 +2.9 pts Slide 5 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE (%) 88 Passenger Load Factor Breakeven Load Factor 84 80 76 75.6 79.4 77.5 79.6 79.6 72 68 0 1H 09/10 1H 10/11 1H 11/12 1H 12/13 1H 13/14 Slide 6
THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE (%) 88 84 80 76 72 68 86.0 75.6 Passenger Load Factor Breakeven Load Factor 82.7 79.8 79.4 78.0 79.6 79.6 77.5 75.4 0 1H 09/10 1H 10/11 1H 11/12 1H 12/13 1H 13/14 Slide 7 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE (%) 88 86.0 Passenger Load Factor Breakeven Load Factor 84 80 76 72 75.6-10.4 79.4 75.4 79.8 78.0 4.0-0.5 79.6 77.5-0.2 82.7 79.6-3.1 68 0 1H 09/10 1H 10/11 1H 11/12 1H 12/13 1H 13/14 Slide 8
THE PARENT AIRLINE COMPANY MONTHLY PASSENGER YIELD Monthly Pax Yields (Including Fuel Surcharge) 13 /pkm 2009-10 2012-13 2013-14 12 11 10 11.2 10.9 10.4 11.4 11.1 10.2 11.6 11.2 9.9 11.3 11.3 10.8 10.8 9.7 9.8 11.6 11.3 10.0 11.5 10.4 11.4 11.3 10.5 10.7 11.2 11.1 11.0 11.0 11.4 11.3 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Slide 9 THE PARENT AIRLINE COMPANY FUEL PRICE AND EXPENDITURE - TREND Fuel Price before hedging ($ million) Fuel Cost before hedging (USD/BBL) 2,000 149 160 160 150 1,800 132 133 140 126 126 130 132 1,600 120 120 110 1,400 98 100 90 1,200 80 61 70 1,000 64 60 50 800 40 30 600 20 10 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1,557 1,743 1,094 649 631 1,243 1,241 1,262 1,233 1,171 1,280 Slide 10 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
THE PARENT AIRLINE COMPANY COST COMPOSITION 1H FY13/14 Others 20.7% (+1.0 pt) Fuel Cost Post Hedging 39.4% (-1.7 pts) Passenger Costs 5.4% Handling Charges 7.1% Staff 13.0% (-0.2 pt) Aircraft Depreciation & Lease Rentals 14.4% (+0.9 pt) Slide 11 THE PARENT AIRLINE COMPANY TOP 5 EXPENDITURE 1H FY13/14 Fuel After Hedging 2,442 (-2.1%, -$53M) Aircraft Depr. & Lease Rentals Staff Handling Charges 892 (+8.9%, +$73M) 805 (+0.4%, +$3M) 438 (+1.2%, +$5M) 1H 2013-14 1H 2012-13 Passenger Cost 337 (+1.9%, +$6M) $M 0 500 1,000 1,500 2,000 2,500 3,000 Slide 12
THE PARENT AIRLINE COMPANY FUEL EXPENDITURE 1H FY13/14 ($ million) 2,800 2,600 2,400 2,495 Higher volume uplifted +80 Lower weighted average fuel price -114 Hedging gain vs loss last year -19 2,442-53 (-2.1%) H1/12 Volume Price Hedging H1/13 Slide 13 THE GROUP 1H FY2013/14 RESULTS
GROUP REVENUE 1H FY2013/14 ($ million) 4,000 3,750 3,500 3,250 3,777 3,840 2012/13 2013/14 +63 +1.7% 3,794 3,901 +107 +2.8% Half Year Revenue $7,741M Year-on-Year $170M +2.2% 3,000 2,750 0 Slide 15 Q1 Q2 GROUP EXPENDITURE 1H FY2013/14 ($ million) 4,000 3,705 3,758 3,750 3,500 3,250 2012/13 2013/14 +53 +1.4% 3,724 3,814 +90 +2.4% Half Year Expenditure $7,572M Year-on-Year $143M +1.9% 3,000 2,750 0 Slide 16 Q1 Q2
GROUP OPERATING PROFIT 1H FY2013/14 ($ million) 150 125 100 75 72 50 82 2012/13 2013/14 +10 +13.9% 70 87 Half Year Op Profit $169M Year-on-Year $27M +17 +19.0% +24.3% 25 0 Slide 17 Q1 Q2 CONTRIBUTION TO GROUP OPERATING PROFIT 1H FY13/14 ($ million) 1H/13 1H/12 Change % Change Singapore Airlines 186 169 + 17 + 10.1 SIA Engineering 56 66-10 - 15.2 SilkAir 22 37-15 - 40.5 SIA Cargo (71) (99) + 28 + 28.3 Slide 18
GROUP NET PROFIT 1H FY2013/14 ($ million) 200 150 100 78 122 2012/13 2013/14 +44 +56.4% 90 160 +70 +77.8% Half Year Net Profit $282M Year-on-Year $114M +67.9% 50 0 Slide 19 Q1 Q2 GROUP NET PROFIT 1H FY2013/14 ($ million) 300 250 200 150 100 50 168 +27 Higher operating profit +28 Gain on disposal of aircraft vs loss last year +18 Higher share of profits from associated and JVs +22 Exceptional items +19 Lower taxation and others 282 +114 +67.9% 0 1H/12 Operating Profit Aircraft Disposal Associates and JV Exceptional Items Others 1H/13 Slide 20
GROUP RESULTS 1H FY13/14 EBITDAR Per Share ($) Earnings Per Share ( ) 1H/13 1.25 24.0 1H/12 1.11 14.3 Interim Dividend Per Share ( ) Net Asset Value Per Share ($) 10.0 At 30 Sep 13 11.30 6.0 At 31 Mar 13 11.15 Slide 21 FLEET DEVELOPMENT - SIA Operating Fleet at 30 September 13 IN: Delivery of A330-300 Delivery of B777-300ER Reinstatement of B777-200ER No. of Aircraft 103 + 2 + 1 + 2 OUT: Decommissioned B777-200 OUT: Decommissioned A340-500 - 1-4 Operating Fleet at 31 March 14 103 Slide 22
FLEET DEVELOPMENT - SLK No. of Aircraft Operating Fleet at 30 September 13 IN: Delivery of A320-200 Delivery of B737-800 OUT: Decommissioned A320-200 23 + 1 + 2-2 Operating Fleet at 31 March 14 24 Slide 23 FLEET DEVELOPMENT - SCOOT No. of Aircraft Operating Fleet at 30 September 13 IN: Lease of B777-200 5 + 1 Operating Fleet at 31 March 14 6 Slide 24
GROUP CAPITAL EXPENDITURE FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 Aircraft 2,250 3,100 2,900 4,050 4,350 Other Assets 200 150 100 150 150 Total 2,450 3,250 3,000 4,200 4,500 Slide 25 GROUP FUEL HEDGING POSITION Percentage hedged for period Oct 13 to Mar 14 60 (%) Avg hedged price for period Oct 13 to Mar 14 118 (USD/BBL - Jet Fuel) Slide 26
BUSINESS OUTLOOK OUTLOOK High and volatile fuel price Intense competition Uncertain global economy Slide 28
MEETING THE CHALLENGES MEETING THE CHALLENGES Continued Focus on Three Pillars Slide 30
FOCUS ON THREE PILLARS Product Leadership Service Excellence Network Connectivity Slide 31 PRODUCT LEADERSHIP Next Generation Cabin Products Slide 32
PRODUCT LEADERSHIP New Design Concept for SilverKris Lounge Planned improvements to lounges in: Sydney London Hong Kong Singapore T3 Kuala Lumpur Manila San Francisco Singapore T2 Gallery Space Gallery Space Tasting Room Dining Area Slide 33 SERVICE EXCELLENCE Customer Experience Management Customer Experience Management Using CEM to deliver proactive and personalized service for all touch-points Slide 34
SERVICE EXCELLENCE Loyalty Enhancements Enhancement of Reserve Value Pay with KrisFlyer Miles Guaranteed Economy Class booking Expanded KrisFlyer partnerships Access to lounges on arrival for Solitaire members Slide 35 SERVICE EXCELLENCE SAA website improvement SAA Commercial Bookings 100,000 Booking Counts 90,000 80,000 70,000 60,000 +52% +33% 50,000 Apr May Jun Jul Aug Sep SAA R4 (Apr 2013 Mar 2014) SAA R4 (Apr 2011 Mar 2012) SAA R3 (Apr 2010 Mar 2011) Slide 36
NETWORK CONNECTIVITY Capacity Increases and New Destinations Copenhagen Fukuoka Osaka Osaka Semarang Makassar Yogyakarta Adelaide Surabaya Shanghai Bali Penang Siem Reap Medan Jakarta Melbourne New Delhi Wuhan Shenzhen Kochi Projected ASK Growth: 3% Projected ASK Growth: 15% Slide 37 NETWORK CONNECTIVITY Expanding our network through partnerships Slide 38 As at March 2013 From 2011 to 2013 41% more code share destinations on SQ network 59% increase in SQ marketing flights per week on code share partners As at September 2013 From 2011 to 2013 55% more code share destinations on SQ network 92% increase in SQ marketing flights per week on code share partners
NETWORK CONNECTIVITY Fleet Development Delivered in 1H FY2013-14 SIA 4 x A330 2 x B773 ER SilkAir 1 x A320 Scoot 1 x B772 8 Slide 39 NETWORK CONNECTIVITY Fleet Development More to join the fleet SIA 10 x A330 (Ongoing) 6 x B773 ER (Ongoing) 70 x A350 (2016 onwards) 5 x A380 (2017 onwards) 30 x A787-10X (2018 onwards) SilkAir 1 x A320 (Oct 13) 54 x B737 (2014 onwards) Scoot 1 x B772 (Oct 13) 20 x B787 (2014 onwards) 197 Slide 40
MEETING THE CHALLENGES Focus on three pillars Portfolio of Airlines Slide 41 PORTFOLIO OF AIRLINES Portfolio of brands allows us to tap different segments Premium Full Service Positioning LCC Slide 42 Medium/ Long-Haul Markets Regional
MEETING THE CHALLENGES Focus on Three Pillars Portfolio of Airlines Tata-SIA JV: Expanding Into New Growth Markets Slide 43 TATA-SIA JV: EXPANDING INTO NEW MARKETS Strong macro drivers Rising GDP and Incomes GDP grew at 8.6% CAGR from 2004-05 to 2010-11 and projected at 6.0% in the next 5 years Increasing Middle Class Middle class population expected to grow significantly Favourable Demographics Young population Immense Market Potential Trips per capita in India still very low (0.04) Slide 44
TATA-SIA JV: EXPANDING INTO NEW MARKETS What it means for SIA: Direct participation in a huge growth market Diversify traffic base Commercial synergies between Tata-SIA JV and SIA Slide 45 MEETING THE CHALLENGES Focus on Three Pillars Portfolio of Airlines Tata-SIA JV: Expanding Into New Growth Markets Pursue New Opportunities Slide 46
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