SIA announced record earnings and a decent dividend but the share price fell quite sharply.
A likely reason was due to the announcement of large bonuses of up to 8 months to be given to employees.
Shareholders want return of profit to them, in the form of dividends or buybacks, not so much return of profit to the employees.
But I feel this is good for SIA in the long run, as this encourages loyalty and the best performing employees to stay and work hard to generate more profits for the company.
Good management prioritises employees over shareholders, especially in a service oriented business like airlines. Happy employees = happy customers = more profit.
However despite the good performance of SIA, i am not keen to be a shareholder. The airline industry is a high capex low margin business, with keen competition and no moat. I am happy to remain a loyal customer of SIA 😊
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