Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell

seekingalpha11-22

Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ...

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Shiok88
·11-23 23:58
Yes I agree also that there are no external influence that will drive the price down to below $5. They do have increase their flight services to other areas and as a strong Singapore company, I believe it still has the charm to attract investors
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- Tigerous:
  $SIA(C6L.SI)$ Singapore airlines?
  27 minutes ago
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- Tigerous:
  which company?
  27 minutes ago
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琉璃思索
·11-22
No brainer
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romanc9
·11-22
Think those holding long term and bought during covid-19, think is worth holding cause i believed it wont move back to below $5..also things are back to almost normal, most biz will be affected one way or another. Weak hands sell. Remember is a very well managed company and back by the gov
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V K
·11-22
Goodness....
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Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel CostsSingapore AirlinesThe H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.Singapore AirlinesWhen unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.Singapore Airlines Stock Still Offers No AppealTo determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.The Aerospace ForumSingapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.Conclusion: Singapore Airlines Stock Offers No AppealThe H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-2","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":374243444297944,"gmtCreate":1732377483087,"gmtModify":1732605156314,"author":{"id":"4188890437058732","authorId":"4188890437058732","name":"Shiok88","avatar":"https://community-static.tradeup.com/news/394cdffaf26c8dcd78752b6d918b09a1","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4188890437058732","authorIdStr":"4188890437058732"},"htmlText":"Yes I agree also that there are no external influence that will drive the price down to below $5. They do have increase their flight services to other areas and as a strong Singapore company, I believe it still has the charm to attract investors&nbsp;","listText":"Yes I agree also that there are no external influence that will drive the price down to below $5. They do have increase their flight services to other areas and as a strong Singapore company, I believe it still has the charm to attract investors&nbsp;","text":"Yes I agree also that there are no external influence that will drive the price down to below $5. They do have increase their flight services to other areas and as a strong Singapore company, I believe it still has the charm to attract investors","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/374243444297944","repostId":2485461475,"repostType":2,"repost":{"id":"2485461475","kind":"highlight","pubTimestamp":1732243004,"share":"https://ttm.financial/m/news/2485461475?lang=&edition=fundamental","pubTime":"2024-11-22 10:36","market":"sg","language":"en","title":"Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2485461475","media":"seekingalpha","summary":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ","content":"<html><head></head><body><ul style=\"\"><li><p>Singapore Airlines&#39; H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.</p></li><li><p>Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.</p></li><li><p>The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.</p></li><li><p>Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8b250e032213f6cb0a144ce005a685c2\" title=\"RyanFletcher\" tg-width=\"750\" tg-height=\"500\"/><span>RyanFletcher</span></p><p>In August, I downgraded <a href=\"https://laohu8.com/S/C6L.SI\">Singapore Airlines</a> stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&amp;P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.</p><h2 id=\"id_2161401974\">Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel Costs</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7dbf90fe76c75ec078ccc20cf7a2bfe4\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>The H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a8b461a092d3804e8a6f84fd898f5f8f\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>When unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.</p><p>This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.</p><h3 id=\"id_3582801193\">Singapore Airlines Stock Still Offers No Appeal</h3><p>To determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/28fe63af8c4495169612718db871b59c\" title=\"The Aerospace Forum\" tg-width=\"640\" tg-height=\"363\"/><span>The Aerospace Forum</span></p><p>Singapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.</p><h2 id=\"id_593283819\">Conclusion: Singapore Airlines Stock Offers No Appeal</h2><p>The H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSingapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 10:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2485461475","content_text":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.RyanFletcherIn August, I downgraded Singapore Airlines stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel CostsSingapore AirlinesThe H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.Singapore AirlinesWhen unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.Singapore Airlines Stock Still Offers No AppealTo determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.The Aerospace ForumSingapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.Conclusion: Singapore Airlines Stock Offers No AppealThe H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":375124445597848,"gmtCreate":1732605072668,"gmtModify":1732605125187,"authorId":4195362055063892,"author":{"id":4195362055063892,"idStr":"4195362055063892","authorId":4195362055063892,"name":"Tigerous","avatar":"https://community-static.tradeup.com/news/1cc88e6e01866542324985e4c7ce6394","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":374243444297944,"type":1,"supId":0,"prevId":0,"content":"<p> <a class=\"teditor-mention\" data-mention-id=\"C6L.SI\" data-mention-name=\"SIA\" href=\"https://ttm.financial/S/C6L.SI\">$SIA(C6L.SI)$</a> Singapore airlines?</p>","text":"<p> <a class=\"teditor-mention\" data-mention-id=\"C6L.SI\" data-mention-name=\"SIA\" href=\"https://ttm.financial/S/C6L.SI\">$SIA(C6L.SI)$</a> Singapore airlines?</p>","html":"<p> <a class=\"teditor-mention\" data-mention-id=\"C6L.SI\" data-mention-name=\"SIA\" href=\"https://ttm.financial/S/C6L.SI\">$SIA(C6L.SI)$</a> Singapore airlines?</p>"},{"id":375124732350512,"gmtCreate":1732605049717,"gmtModify":1732605125130,"authorId":4195362055063892,"author":{"id":4195362055063892,"idStr":"4195362055063892","authorId":4195362055063892,"name":"Tigerous","avatar":"https://community-static.tradeup.com/news/1cc88e6e01866542324985e4c7ce6394","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":374243444297944,"type":1,"supId":0,"prevId":0,"content":"<p>which company?</p>","text":"<p>which company?</p>","html":"<p>which company?</p>"}],"langContent":"EN"},{"id":373779754950848,"gmtCreate":1732264275512,"gmtModify":1732264279703,"author":{"id":"4177654395991812","authorId":"4177654395991812","name":"琉璃思索","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/4c5ceab71416b120bab4604c0754b52a","crmLevel":8,"crmLevelSwitch":1,"idStr":"4177654395991812","authorIdStr":"4177654395991812"},"htmlText":"No brainer","listText":"No brainer","text":"No brainer","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/373779754950848","repostId":2485461475,"repostType":2,"repost":{"id":"2485461475","kind":"highlight","pubTimestamp":1732243004,"share":"https://ttm.financial/m/news/2485461475?lang=&edition=fundamental","pubTime":"2024-11-22 10:36","market":"sg","language":"en","title":"Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2485461475","media":"seekingalpha","summary":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ","content":"<html><head></head><body><ul style=\"\"><li><p>Singapore Airlines&#39; H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.</p></li><li><p>Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.</p></li><li><p>The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.</p></li><li><p>Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8b250e032213f6cb0a144ce005a685c2\" title=\"RyanFletcher\" tg-width=\"750\" tg-height=\"500\"/><span>RyanFletcher</span></p><p>In August, I downgraded <a href=\"https://laohu8.com/S/C6L.SI\">Singapore Airlines</a> stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&amp;P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.</p><h2 id=\"id_2161401974\">Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel Costs</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7dbf90fe76c75ec078ccc20cf7a2bfe4\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>The H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a8b461a092d3804e8a6f84fd898f5f8f\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>When unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.</p><p>This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.</p><h3 id=\"id_3582801193\">Singapore Airlines Stock Still Offers No Appeal</h3><p>To determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/28fe63af8c4495169612718db871b59c\" title=\"The Aerospace Forum\" tg-width=\"640\" tg-height=\"363\"/><span>The Aerospace Forum</span></p><p>Singapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.</p><h2 id=\"id_593283819\">Conclusion: Singapore Airlines Stock Offers No Appeal</h2><p>The H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSingapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 10:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2485461475","content_text":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.RyanFletcherIn August, I downgraded Singapore Airlines stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel CostsSingapore AirlinesThe H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.Singapore AirlinesWhen unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.Singapore Airlines Stock Still Offers No AppealTo determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.The Aerospace ForumSingapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.Conclusion: Singapore Airlines Stock Offers No AppealThe H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":373770498158736,"gmtCreate":1732262030183,"gmtModify":1732262034941,"author":{"id":"4102495020619380","authorId":"4102495020619380","name":"romanc9","avatar":"https://static.tigerbbs.com/76bfe37245defa055adfff7453f1520f","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1,"idStr":"4102495020619380","authorIdStr":"4102495020619380"},"htmlText":"Think those holding long term and bought during covid-19, think is worth holding cause i believed it wont move back to below $5..also things are back to almost normal, most biz will be affected one way or another. Weak hands sell. Remember is a very well managed company and back by the gov","listText":"Think those holding long term and bought during covid-19, think is worth holding cause i believed it wont move back to below $5..also things are back to almost normal, most biz will be affected one way or another. Weak hands sell. Remember is a very well managed company and back by the gov","text":"Think those holding long term and bought during covid-19, think is worth holding cause i believed it wont move back to below $5..also things are back to almost normal, most biz will be affected one way or another. Weak hands sell. Remember is a very well managed company and back by the gov","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/373770498158736","repostId":2485461475,"repostType":2,"repost":{"id":"2485461475","kind":"highlight","pubTimestamp":1732243004,"share":"https://ttm.financial/m/news/2485461475?lang=&edition=fundamental","pubTime":"2024-11-22 10:36","market":"sg","language":"en","title":"Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2485461475","media":"seekingalpha","summary":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ","content":"<html><head></head><body><ul style=\"\"><li><p>Singapore Airlines&#39; H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.</p></li><li><p>Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.</p></li><li><p>The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.</p></li><li><p>Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8b250e032213f6cb0a144ce005a685c2\" title=\"RyanFletcher\" tg-width=\"750\" tg-height=\"500\"/><span>RyanFletcher</span></p><p>In August, I downgraded <a href=\"https://laohu8.com/S/C6L.SI\">Singapore Airlines</a> stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&amp;P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.</p><h2 id=\"id_2161401974\">Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel Costs</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7dbf90fe76c75ec078ccc20cf7a2bfe4\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>The H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a8b461a092d3804e8a6f84fd898f5f8f\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>When unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.</p><p>This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.</p><h3 id=\"id_3582801193\">Singapore Airlines Stock Still Offers No Appeal</h3><p>To determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/28fe63af8c4495169612718db871b59c\" title=\"The Aerospace Forum\" tg-width=\"640\" tg-height=\"363\"/><span>The Aerospace Forum</span></p><p>Singapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.</p><h2 id=\"id_593283819\">Conclusion: Singapore Airlines Stock Offers No Appeal</h2><p>The H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSingapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 10:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2485461475","content_text":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.RyanFletcherIn August, I downgraded Singapore Airlines stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel CostsSingapore AirlinesThe H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.Singapore AirlinesWhen unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.Singapore Airlines Stock Still Offers No AppealTo determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.The Aerospace ForumSingapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.Conclusion: Singapore Airlines Stock Offers No AppealThe H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":373744731652256,"gmtCreate":1732255728566,"gmtModify":1732255732639,"author":{"id":"3577323914202336","authorId":"3577323914202336","name":"V K","avatar":"https://static.tigerbbs.com/536d624e5750dcffec704eeed9bc003b","vip":1,"hat":"https://static.tigerbbs.com/ae1f49570794979e009a5efdeb6f4789","crmLevel":8,"crmLevelSwitch":1,"idStr":"3577323914202336","authorIdStr":"3577323914202336"},"htmlText":"Goodness....","listText":"Goodness....","text":"Goodness....","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/373744731652256","repostId":2485461475,"repostType":2,"repost":{"id":"2485461475","kind":"highlight","pubTimestamp":1732243004,"share":"https://ttm.financial/m/news/2485461475?lang=&edition=fundamental","pubTime":"2024-11-22 10:36","market":"sg","language":"en","title":"Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2485461475","media":"seekingalpha","summary":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ","content":"<html><head></head><body><ul style=\"\"><li><p>Singapore Airlines&#39; H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.</p></li><li><p>Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.</p></li><li><p>The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.</p></li><li><p>Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8b250e032213f6cb0a144ce005a685c2\" title=\"RyanFletcher\" tg-width=\"750\" tg-height=\"500\"/><span>RyanFletcher</span></p><p>In August, I downgraded <a href=\"https://laohu8.com/S/C6L.SI\">Singapore Airlines</a> stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&amp;P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.</p><h2 id=\"id_2161401974\">Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel Costs</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7dbf90fe76c75ec078ccc20cf7a2bfe4\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>The H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a8b461a092d3804e8a6f84fd898f5f8f\" title=\"Singapore Airlines\" tg-width=\"640\" tg-height=\"360\"/><span>Singapore Airlines</span></p><p>When unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.</p><p>This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.</p><h3 id=\"id_3582801193\">Singapore Airlines Stock Still Offers No Appeal</h3><p>To determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/28fe63af8c4495169612718db871b59c\" title=\"The Aerospace Forum\" tg-width=\"640\" tg-height=\"363\"/><span>The Aerospace Forum</span></p><p>Singapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.</p><h2 id=\"id_593283819\">Conclusion: Singapore Airlines Stock Offers No Appeal</h2><p>The H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Singapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSingapore Airlines: Declining Earnings and Poor Fundamentals Make It a Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 10:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion ...</p>\n\n<a href=\"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://seekingalpha.com/article/4739241-singapore-airlines-declining-earnings-and-poor-fundamentals-make-it-a-sell","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2485461475","content_text":"Singapore Airlines' H1 2025 results show revenue growth of 3.7%, but unit revenues are declining while operating costs rise significantly.Operating profit dropped to 795 million SGD from 1.55 billion SGD, with margins falling from 17% to 8.3%, squeezing profitability.The stock trades at a discount to peers with no expected EBITDA growth, leading to no upward pressure on the stock price.Given the challenging cost and revenue environment, and declining earnings estimates, I maintain a sell rating for Singapore Airlines stock.RyanFletcherIn August, I downgraded Singapore Airlines stock from hold to sell due to a significantly lower profit outlook year-on-year despite healthy demand patterns. Initially, the stock climbed 10%, but it retreated and measured from the time of publication, the stock is down 0.6% compared to a 5.4% gain for the S&P 500. That is not the kind of performance we are looking for, and in that sense the sell rating was a good call. In this report, I will be discussing the most recent earnings and I will be reviewing my price target and rating for Singapore Airlines stock.Singapore Airlines, Earnings Pressured By Lower Unit Revenues And Higher Fuel CostsSingapore AirlinesThe H1 2025 results show that revenues increased by 3.7%. That 3.7% growth was realized by increasing capacity by 11% for the passenger services and 10.2% for the cargo services, for an overall 10.6% increase in system capacity. So, what we are seeing is that even though demand for air travel is healthy, the unit revenues continue to decline. With more capacity coming online and some economic weakness in China, it is to be expected that the unit revenues moderate. The unit revenues are still above pre-pandemic levels, but it is increasingly looking as if the unit revenues will continue to decline to pre-pandemic levels, while the cost profile of airlines is incomparable compared to pre-pandemic times.Singapore AirlinesWhen unit revenues decline as capacity increases, one has to hope that the increase in capacity helps to drive down the unit costs. For Singapore Airlines, we see that this is not the case with 14.4% growth in operating costs. Even when we strip out the fuel expenses, there was a 12.1% increase in cost. Keeping in mind the 10.6% increase in capacity, we see that staff costs rose in line with capacity expansion while depreciation costs were slightly lower and aircraft MRO costs were down 5%. All other costs were inflated beyond the capacity expansion and drove up the unit costs.This resulted in operating profit falling to 795 million SGD from 1.55 billion SGD a year earlier. Operating margins fell from 17% to 8.3%. We are seeing that as unit rates normalize and cost head higher the margins are being squeezed significantly and that is also the reason why I previously downgraded the stock to sell.Singapore Airlines Stock Still Offers No AppealTo determine multi-year price targets, The Aerospace Forum has developed a stock screener which uses a combination of analyst consensus on EBITDA, cash flows and the most recent balance sheet data. Each quarter, we revisit those assumptions and the stock price targets accordingly. In a separate blog, I have detailed our analysis methodology.The Aerospace ForumSingapore Airlines has quite a complex valuation case. The reason is that it trades at a discount to peers. However, historically, the company has also not traded in line with peers, so there might not be a strong justification for applying a peer group valuation. And even if we apply the company median EV/EBITDA multiple to value the stock, we see that there is no upside: not this year, not next year, and not in the year after. That is driven by an EBITDA that from FY23 towards FY27 shows an annual decline of 4.6%. So, there is no growth in earnings and no upward pressure on the stock. As a result, I maintain my sell rating.Conclusion: Singapore Airlines Stock Offers No AppealThe H1 results showed that unit revenues are under pressure and seemingly are converging to pre-pandemic levels, while costs remain inflated. That naturally means that the margins are being pressured in the years to come and there seems to be no improvement in EBITDA. In fact, EBITDA is expected to continue trending down. As a result, I believe that Singapore Airlines stock is a sell. Airline stocks are volatile and the current cost and revenue environment is challenging. If we then see that earnings estimates are trending down and there is no upward pressure using historical valuation multiples, then there is no strong investment case at all.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":11,"commentSize":4,"repostSize":4,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}