Accordingly, passenger flown revenue inches 1% up y-o-y to $15.85 billion, while cargo revenue improved 4.4% y-o-y off the back of strong demand for e-commerce and perishables, as well as spillover from disruptions to sea freight.
Singapore Airlines and budget carrier Scoot carried a record 39.4 million passengers for the full year, up 8.1% y-o-y, while gross passenger load factor (PLF) fell 1.4 percentage points (ppts) to 86.6%, as passenger traffic growth of 6.4% lagged behind capacity expansion of 8.2%.
Cargo load factor rose 1.6 ppts to 56.1%, while yields decreased 7.8% due to increased competition.
Notably, group expenditure for the FY2025 rose 9.5% y-o-y to $17.8 billion, with non-fuel spending up 11% y-o-y and net fuel costs increasing 6.1% y-o-y, resulting in a lower operating profit of $1.71 billion, a 37.3% y-o-y dip.
See also: Food Empire’s target prices raised on robust 1Q
Passenger yields also decreased by 5.5% to 10.3 cents per revenue per passenger-kilometre amid intensified competition from an industry-wide capacity increase.
Altogether, the group announced a final dividend of 30 cents per share for FY2024/2025.
Including the interim dividend of 10 cents per share paid on Dec 11, 2024, this takes the total dividend for the year to 40 cents per share.
See also: Genting Singapore sees a soft start to the year
Analyst reactions
DBS Group Research (DBS), CGS International (CGSI) and UOB Kay Hian (UOBKH) all have a “neutral” call on the stock, with respective target prices raised to $6.40 from $6.30 previously, $6.88 from $6 previously, and $6.63 from $6.22 previously.
The team at DBS, comprising Jason Sum, Tabitha Foo and Paul Yong, notes that excluding the one-off non-cash accounting gain from the Air India-Vistara merger, core net income would have been $1.68 billion, 2% above their estimate and 6% above consensus estimates.
With this, the final dividend of 30 cents per share, which takes the FY2025 payout to 40 cents per share, also exceeded the analysts’ and consensus estimates of 29 cents and 34 cents, respectively.
SIA’s cargo volumes rose 4% y-o-y in April despite ongoing trade frictions between the US and its trading partners.
DBS analysts attributed the counterintuitive move to the front-loading of shipments, a trend that is expected to continue in the coming months, potentially leading to upside surprises in cargo volumes and yields.
On passenger yields, the analysts expect a continued moderation, albeit at a slower rate. Sum, Foo and Yong note that while OEM delays have shifted the group’s capital expenditure (capex) schedule, the flag carrier is mitigating the impact by extending leases and deferring aircraft retirements.
For more stories about where money flows, click here for Capital Section
Even further in the future, SIA’s management has highlighted that the upcoming Terminal 5 will help Singapore Airlinesand Scoot consolidate operations, which should enhance operational efficiency and passenger experience, particularly for connections.
The analyst at CGSI, Raymond Yap, notes that FY2025 marks the third consecutive year of outperformance.
Yap has raised his price-to-book value ratio (P/BV) multiple as he believes besides the upcoming 30 cents dividend, investors’ interest in SIA could be kept high due to the drop in the Brent oil price to US$66 ($85.26) per barrel (bbl) in April to May, and the forex change from the current $US1 to $1.30 versus $US1 to $1.34 as at end March.
From this, he expects a boost to 1QFY2026 earnings.
“While we have cut our Brent price assumption from US$75 to US$70 bbl for FY2026, we have also reduced our pax and cargo yield assumptions as we think the global business uncertainty brought about by US “Liberation Day” tariffs will eventually moderate business travel and cargo demand; this is the key downside risk from 2QFY2026 onwards,” writes Yap.
Conversely, UOBKH analyst Roy Chen’s FY2026 forecasts assume a 1.5% decline in passenger yields and a 3.7% drop in cargo yields, versus 5.5% and 7.8% declines in FY2025, respectively.
“We expect a moderate y-o-y improvement in core operating profit in 1QFY2026, driven by lower fuel costs.
However, this will likely be offset at the net profit level by Air India’s drag and lower interest income,” writes Chen.
With this, his preliminary 1QFY2026 core net profit estimate stands at $400 million to $500 million, compared to $452 million in 1QFY2025.
Chen also anticipates SIA’s net gearing to rise over the next three years, reaching 37% by end-FY2028, after accounting for the group’s capex plans from the current FY2026 to FY2028.
Elsewhere, Maybank Securities’ Eric Ong and OCBC Investment Research’s Ada Lim have both maintained their “hold” call on the stock, with a raised target price of $6.85 from $6.45 previously and a lifted fair value (FV) of $6.80 from $6.50 previously, respectively.
On declining yields, Ong notes that there is a chance that SIA may eventually need to pass on cost savings to customers with rising competition, despite the slowing rate of moderation.
As for OIR’s Lim, SIA’s close price of $6.88 on May 15 represents a yield of 5.8%, to which she expects the share price to remain supported in the near term before it goes ex-dividend.
In contrast, Citi Research’s Kaseedit Choonawat, Eric Lau and Amy Han note that they expect a mildly positive share price reaction, given two quarters of relatively stable passenger pricing, as well as a relatively high payout ratio. As a result, they remain “neutral” on the stock at a target price of $6.34.
They write: “Relatively high payout ratio could imply capex further pushed out at SIA/Scoot given on-going supply chain tightness or higher confidence on Air India that it will unlikely require further injections in the near term.”
PhillipCapital’s Liu Miaomiao and Morningstar Equity Research’s Lorraine Tan are the least positive on the group.
Liu has downgraded SIA to “reduce” from “neutral” at a raised target price of $6.08 from $5.73 previously, based on the stock’s recent share price performance.
She writes in her May 19 report: “Although yields are projected to continue their downward trend, they are expected to stay above pre-Covid levels.
Strong forward bookings and a delayed capex schedule are expected to support dividends in FY2026. We forecast a 60% payout ratio, corresponding to a DPS of 30 cents.”
Separately, Morningstar’s Tan has lowered her FV estimate on SIA by 5% to $6.10, with a two-star rating on the stock.
According to Morningstar’s five-tiered rating system for stocks, a two-star rating represents that “investors are likely to receive a less than fair risk-adjusted return”.
Tan notes that her FV estimate for SIA factors in weaker near-term profitability, while her longer-term outlook reflects concerns that the expansion of Chinese airlines’ international routes could weigh on SIA’s yields and load factors, given their competitive low-cost offerings.
