: Value Investing Forum - Singapore, Hong Kong, U.S.

Full Version: Singapore Airlines
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
16 June 2020 $2.2b utilised SQ
$2b to pay DBS bridging loan 
$0.2b OOE

Stay home and stay safe, valuebuddies.
26 June 2020  Impairment and provisions $124m - NokScoot
In view of the likelihood of the liquidation of NokScoot, SIA will record a total one-off charge of S$123.6 million for the first quarter ending 30 June 2020. This comprises a S$106.9 million charge mainly due to impairment of SIA’s book value of seven Boeing 777-200 aircraft which had been leased to NokScoot, and provisions by Scoot of S$16.7 million to cover its share of liquidation and related costs. 

The carrying value of SIA’s investment in NokScoot has been fully written down in previous financial periods.

Had the one-off charge of S$123.6 million occurred in the last financial year ended 31 March 2020 (“FY2019/20”), it would have had the effect of increasing SIA’s FY2019/20 loss per share of 17.9 cents by 10.4 cents, representing a 58.1% deterioration, and reducing SIA’s consolidated net tangible assets per share of 7.45 cents as at 31 March 2020 by 0.11 cents, representing a 1.5% reduction. 

Wear mask and keep your distance when going out, valuebuddies.
23 July 2020 new committed lines of credit for SQ

Singapore Airlines (SIA) announced today that the Company has successfully raised an additional S$750 million through long term loans secured on some of its Airbus A350-900 and Boeing 787-10 aircraft. 
With the completion of these transactions, SIA has now raised a total of S$1.65 billion from secured financing since the start of financial year 2020/2021.
Together with the new committed lines of credit, this ensures continued access to more than S$2.1 billion in committed liquidity.

Wear mask and keep your social distance, everyone.
24 July 2020 QnA eAGM on 27 July 2020 10am

Its a 9 pages QnA.
Tons of positive tones and preparation to open up.
But it seems clear that results is going to be bad.
Unfortunately, closing the business/route is not acceptable.
SQ is forced to fly.

Why lay?
1. SQ has both full-service and low-cost segments -> flexibility to deploy the right products to meet demand when it returns
2. Lots of details especially leveraging on digital initiatives to provide a "normal" flight experiences when border re-open
3. 8 June 2020, SG established fast-lane arrangement between Singapore and 6 China cities (ChongQing, GuangDong, JiangSu, ShangHai, TianJin and ZheJiang)
4. SG able to carry one-way transfer traffic to any point within SQ network, originating from Australia, France, Denmark, Germany, HK, Japan, China, Netherlands, NZ, Korea, Spain, Switzerland, Taiwan and UK
5. SG can carry two-way transfer traffic between South West Pacific and Europe, South West Pacific and North Asia, and between North Asia and Europe within SQ network
6. With partial resumption of transfers via Changi Airport, SQ network has increased from 18 destinations in April to 32 destinations by end of June
7. Selected routes will see a step-up in frequencies if demand picks up in the coming months
8. The opening of transit routes via SG has resulted in slight uptick in passengers carried.
9. 9,600 passengers in May 2020
10. 17,700 passengers in June 2020
11. cmpare to 3.2 million passengers in June 2019

SQ continue to renew it's fleets to new fuel-efficient planes in anticipation of continued high fuel prices.
No right or wrong answer but it's pretty obvious that SQ is determined to continue to spend a significant amount of $$$ here.

Fuel hedge is actually a major cash leak.
SQ decided to pause its fuel hedging activity.
Unfortunately, those existing fuel hedges will continue to be ineffective.
QoQ changes will have to be marked-to-market.
30 June 2020 will reported the hedges loss which valuebuddies definitely very keen to know.
Of course, moving forward, SQ existing hedges will be effective or ineffective will depend on both oil prices and recovery of air travel market.
We know what will happen, isn't it?

Unfortunately, the pursuit of excellent air plane and ineffective fuel hedge will means less $$$ for it's staff.
Let's see how SQ balance it's pursuit for excellent, attempting to hedge fuel in order to gain maximum profits (previously) 
and the impact to it's staff.
Not a easy balancing act.

Let's just give the best wishes for SQ and hope that management will spare more thoughts for it's talented pool of employee.

Wear mask and keep your social distance, everyone.
I will not buy SIA shares even if it is $1.....Singapore government should just privatize it like SMRT....
26 July 2020 QnA for today eAGM SQ

Additional QnA - all surrounding MCB.
Is there $$$ to be make?

What would be the process to apply for the Additional MCBs, if issued? Can non-SIA shareholders apply if they hold the original Rights MCBs?
As disclosed in the SIA circular to shareholders dated 15 April 2020, SIA at its sole discretion may offer the Additional MCBs by way of one or more further rights issues within the next 15 months from the EGM (30 April 2020). Only SIA shareholders at the point of such issuance would be offered the right to subscribe on a pro-rata basis, subject to the eligibility conditions laid out in the abovementioned circular. 

Wear mask and keep your social distance, everyone
29 July 2020 loss $1b 1Q Result SQ

Rev $851m (vs 4b)
Operating loss $1b (vs +0.2b)
Net loss $1.1b (vs +0.1b)

Intelligent valuebuddies might want to dig further for the reason of $500m loss?
Question is whether this $500m loss is going to be recurring every Qtr.

Wear mask and keep your social distance, everyone
it's the hedging losses 464 millions, marked to market... more Qs to come... passenger carriage is down 99.5%...
Half of the 8.8b utilized SQ:
2.2b@16 Jun 2020
2b - pay DBS bridging loan
0.2b - OOE

2.2b@15 Jun - 14 Aug 2020
1.1b - OOE, fuel hedging trade, ticket refund
0.2b - aircraft purchase
0.9b - debt

Stay home and stay healthy, valuebuddies.
Cut 4,300 positions:
1. 2,400 from Singapore and Oversea stations
2. 1,900 from job freeze, early retirement and voluntary release
Goh Choon Phong: "The next few weeks will be some of the toughest in the history of the SIA Group as some of our friends and colleagues leave the company. We will conduct this process in a fair and respectful manner, and do our best to ensure that they receive all the necessary support during this very trying time."

I try not to read in between the line but I couldn't stop myself for imagining significant losses from fuel hedge.

I hope I am wrong.

Stay home and stay safe, everyone.