SG Morning Highlights | SIA's Q1 Profits Dip Amid Rising Expenses Despite Increased Revenue

Singapore shares opened lower on Thursday. The $FTSE Singapore Straits Time Index (.STI.SG)$ dropped 0.33 percent to 3444.67 as at 9:13 am.

$SIA (C6L.SG)$: Singapore Airlines (SIA) faced a 38.5% drop in net profits for Q1, down to S$451.7 million from last year's S$734 million, despite a 5.3% rise in revenue to S$4.7 billion. The profit decline was attributed to weaker operating performance, reduced net interest income, lower profits from aircraft disposal, and decreased earnings from associated companies. Passenger revenue saw a 4.1% increase, driven by a significant rise in passenger numbers and solid load factors. However, cargo revenue slightly fell by 0.2%. Group expenditure jumped by 14%, with fuel costs soaring by 30.1%. SIA's EPS decreased to 12.8 Singapore cents from 14.3 cents last year. The airline noted robust travel demand in Q1 and plans to expand flight services despite anticipating challenges such as increased market capacity, operational costs, and global uncertainties.

$Keppel (BN4.SG)$: Keppel announced a 7% year-over-year increase in net profit from continuing operations, reaching S$513 million in the first half of 2024. Despite this, the total net profit saw a sharp decline to S$304 million from S$3.6 billion, which included profits from now-discontinued offshore and marine operations. The earnings per share for H1 2024 were S$0.167, down from S$2.03 the previous year. Revenue from continuing operations dropped by 13.2% to S$3.2 billion, primarily due to decreased infrastructure and real estate contributions. Nonetheless, the board proposed a tax-exempt interim cash dividend of S$0.15 per share, consistent with the previous year, set to be paid on August 23. CEO Loh Chin Hua noted an improved annualized return on equity and anticipates opportunities in alternative real assets, leveraging Keppel's expertise amidst ongoing market challenges.

$UOB (U11.SG)$: United Overseas Bank (UOB) saw a slight 1% rise in net profit for Q2 2024, achieving S$1.43 billion, up from S$1.42 billion the previous year. Without the one-off expenses from acquiring Citigroup’s consumer banking units, the profit would have reached S$1.49 billion, surpassing the S$1.47 billion forecast by analysts. UOB has declared an increased interim dividend of S$0.88 per share for the first half of the year. The bank's net fee income climbed to S$618 million, an 18% year-on-year increase, attributed to strong loan-related and wealth management fees, alongside growth in credit card fees. However, net interest income slightly dipped to S$2.4 billion with a decline in the net interest margin. Non-performing loans ratio improved, and total allowances decreased by 26%, reflecting stabilizing asset quality. UOB CEO Wee Ee Cheong highlighted the bank's resilient asset quality and strong balance sheet, pointing to reduced one-time costs and potential synergies from the recent acquisition moving forward.