Singapore Airlines: Still A Great Way To Fly $SIA(C6L.SG)has just released its interim financial results for FY26/27, de…
Singapore Airlines: Still A Great Way To Fly
$SIA(C6L.SG)has just released its interim financial results for FY26/27, delivering a masterclass in resilience. Despite geopolitical headwinds and surging oil prices, SIA proved why its iconic batik sarong remains the undisputed gold standard of global aviation.
The Earnings Snapshot:
Record Top Line Demand:
Revenue soared 16.8% YoY to a record SGD 11.3 billion, powered by 21.8 million passengers, firmer airfares and booming air cargo yields.
Beating Estimates & A Sharp Q2 Rebound:
While higher fuel costs weighed in 6 months net profit of SGD 134 million, the result more than doubled consensus estimates of SGD 65.3 million. Better yet, Q2 net profit quadrupled year on year to SGD 210 million, up from SGD 52 million.
Rewarding Shareholders:
Management declared a total interim payout of 7 cents per share. This includes 2 cents and 5 cents special dividends. SIA goes ex dividend on 25 November 2026 with a payout date of 11 December 2026. The current dividend yield is 3.8%.
Fuel Hedging: The Shock Absorber
Cushioning the Blow:
Average jet fuel prices surged 86.7% YoY amid Middle East tensions, pushing SIA's unhedged fuel bill to over 90%.
Strategic Forecast:
Thanks to SIA's famously long dated hedging strategy, it locked in SGD 731 million in fuel hedging gains for the half year. This cushions the cash flow and softens the impact on margins while unhedged rivals felt the full brunt of the spike.
The Air India Turnaround Time:
SIA's 25.1% stake in Air India remains a multi year transformation project. SIA's share of Air India's losses narrowed by 16% to SGD 361.7 million in 1H, down from SGD 429.5 million a year ago.
The Long Runway:
Tata Sons, the main shareholder with 74.9% stake, estimates a full turnaround in 5 to 10 years time.
My Take
SIA has continued to maintain its world class service despite the current geopolitical headwinds. It is a great buy for long term investors.
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