SIA's hedging losses to balloon to $350m in Q3

But headline net profit will still surge.

Singapore Airlines will report massive hedging losses when it unveils its third-quarter financial results, according to a report by UOB Kay Hian.

The report noted that the third quarter will likely be the peak of SIA's fuel hedging losses. In the second quarter, SIA guided that it has hedged 50.7% of its fuel requirements for the second half of FY16 at US$93 per barrel.

"The differential between that and the into-plane fuel cost is likely to result in about S$350m in hedging losses," UOB Kay Hian said.

Despite this, SIA is still expected to report a substantial jump in overall net profiton back of higher contributions from its subsidiaries.

If SIA recognises the reversal of anti-trust fines, UOB Kay Hian expects the group's net profit to surge by 88%. Barring this, SIA is expected to report 30% net profit growth.