SIA hit with $4.3b net loss after ‘toughest year in its history'

The group plans to raise $6.2b via mandatory convertible bonds.

Singapore Airlines is awashed in red as they reported a net loss of $4.3b for FY2021 ended 31 March.

Group revenue fell by 76.1% YoY to $3.8b from $15.9b in the previous year due to the plunge in passenger flown revenue across Singapore Airlines, SilkAir and Scoot, the three passenger airlines within the group.

Passenger traffic was down 97.9% due to global restrictions on international travel

This was partially offset by higher cargo flown revenue, which rose by 38.8% YoY to $2.7b. Improvements in freighter utilisation, deployment of passenger aircraft for cargo only flights and removing seats from passenger cabins to create additional volume for cargo partially mitigated the loss of passenger aircraft bellyhold capacity during the pandemic.

Strong air cargo demand, especially in key segments such as e-commerce, pharmaceuticals and electronics, provided strong support for both cargo load factors and yields amidst tight industry cargo capacity.

SIA said it will undertake a further issuance of additional mandatory convertible bonds to raise gross proceeds of approximately $6.2b so the group will have “sufficient liquidity to weather the current challenges.”

“The issuance will allow the SIA Group to maintain a strong equity base and provide it with additional options moving forward to raise further debt financing as necessary. It further strengthens the Group’s financial foundation to navigate the crisis, and enables it to make the necessary investments to secure its industry-leading position,” SIA said

In view of the significant losses incurred and the need to conserve cash, SIA’s Board of Directors is not proposing a final dividend for the financial year ended 31 March 2021.