SINGAPORE (Feb 7): Singapore Airlines posted earnings of S$177.2 million in 3Q, down 35.6% from S$274.9 million a year ago.

This was mainly due to recognition of a S$79 million write-down of the Tigerair brand and trademark during the quarter.

The lower earnings were also due to the absence of a one-off gain of S$52 million last year from SilkAir’s sale and leaseback of four 737-800s.

These were partially mitigated by a S$30 million reduction in tax expense.

Revenue in 3Q fell 2.5% to S$3.84 billion in 3Q, from S$3.94 billion in the same quarter last year.

This was mainly due to lower passenger flown revenue in a weak-yield environment, SIA says in an SGX filing.

As at Dec 31, 2016, cash and cash equivalents stood at S$3.1 billion.

“2017 is expected to be another challenging year amid tepid global economic conditions and geopolitical concerns, alongside other market headwinds such as overcapacity and aggressive pricing by competitors,” SIA says. “Loads and yields for both the passenger and cargo businesses are projected to remain under pressure.”

In addition, SIA says fuel prices, which have trended upward since the last quarter, are expected to remain volatile as uncertainty lingers around global oil production output.

For 4Q, SIA has hedged 37.4% of its jet fuel requirements in Singapore Jet Kerosene (MOPS) at a weighted average price of US$67 per barrel.

It has also entered into longer dated Brent hedges with maturity extending to 2022, covering between 33% and 39% of its projected annual fuel consumption, at average prices ranging from US$53 to US$59 per barrel.

“The Group will maintain vigilance over its costs, and its strong balance sheet positions it well to weather the many challenges ahead,” SIA adds.

Shares of Singapore Airlines closed 9 Singapore cents lower at S$9.72 on Tuesday.