Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
The fall in earnings would have been worse but for a one-off “return of capital” gain of S$48 million from the redemption of preference shares by associate Virgin Atlantic.
Company Name: SINGAPORE AIRLINES LTD
| Research House: Phillip Securities | Price Call: HOLD | Target Price: 11.35 |
Phillip Securities maintained its hold rating on Singapore Airlines (SIAL.SI), the world’s second largest carrier by market value, but cut the target price to $11.35 from $13.45.
SIA reported last Thursday a 49% fall in second quarter net profit to $194 million, within Phillip’s expectations, due to higher fuel prices and a decline in passenger yields.
SIA reported last Thursday a 49% fall in second quarter net profit to $194 million, within Phillip’s expectations, due to higher fuel prices and a decline in passenger yields.
The fall in earnings would have been worse but for a one-off “return of capital” gain of S$48 million from the redemption of preference shares by associate Virgin Atlantic.
“With weakening consumer confidence in major economies, discretionary travel would likely be scaled back. Declines in consumer confidence tend to lead a fall in passenger yields and with the worsening economic outlook, we believe that further declines are likely,” Phillip said.
The brokerage also said that SIA is currently trading at 1.04 times of its financial year 2012 book value, and the price will not increase in the near term unless oil prices fall or the economic environment turns positive.
At 9:51 a.m., shares of SIA were unchanged at $11.28. The shares have fallen about 26% since the start of the year.
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