Singapore Airlines shares slide 8pct on profit miss, Maybank issues 'Sell' call
The stock fell more than eight per cent in early trade, marking its sharpest intraday drop since August 2024, based on LSEG data. It was last down 7.11 per cent.
For the quarter ended June 30, SIA recorded a net profit of S$186 million (US$144 million), dragged by lower interest income and losses from associated companies, including Air India, in which it holds a 25.1 per cent stake.
Operating profit also fell 13.8 per cent to S$405 million, as rising costs and easing travel demand weighed on margins.
According to CNBC, DBS Bank analyst Tabitha Foo attributed part of the decline to Air India's worse-than-expected losses, made worse by reputational damage and restructuring challenges following a Boeing Dreamliner incident in June.
Foo said bookings dropped by about 20 per cent, average fares fell between eight and 15 per cent, and cancellations surged, especially among corporate and premium travelers.
SIA said demand for air travel and cargo remains strong, though it warned of a volatile operating environment due to geopolitical tensions and uneven trade patterns.
Still, Maybank has downgraded SIA to "Sell", citing high valuations, weaker cargo trends and rising costs. It cut profit forecasts by up to 29 per cent over the next three years and lowered its target price to S$6.75, compared to S$7.08 currently.
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