SINGAPORE (May 18): Singapore Airlines (SIA) swung to a loss of S$138.3 million in the fourth quarter ended March, compared to earnings of S$224.7 million in the corresponding quarter last year.

This brought earnings to S$360.4 million for the full year, a 55.2% decline from S$804.4 million a year ago.

The loss in 4Q was largely attributable to a S$132 million provision for SIA Cargo for competition-related matters, as well as the absence of refund of a fine of S$117 million that the group received last year.

In addition, the group in 4Q saw an 81.7% drop in operating profit to S$27.6 million, from S$153.2 million a year ago.

This was mainly on the back of an operating loss of S$41 million by the parent airline company in 4Q, compared with an operating profit of S$98 million in the same period a year ago.

Full-year group revenue in FY16-17 fell 2.4% to S$14.87 billion, from S$15.24 billion a year ago.

Passenger flown revenue declined S$382 million or 3.2%, despite a 2.6% growth in traffic, as yields continued to come under intense pressure.

Cargo revenue was also down S$87 million on the back of cargo yield erosion, notwithstanding higher freight carriage.

Other revenue was lower with the absence of income earned upon the release to Airbus of seven aircraft delivery slots recorded in the last financial year.

Net fuel costs contracted by S$780 million or 17.2%, largely due to an S$827 million reduction in fuel hedging loss.

Cash and cash equivalents stood at S$3.38 billion as at March 31, 2017.

The Board has recommended a final dividend of 11 Singaporean cents per share for FY16-17.

Including an interim dividend of 9 cent per share paid earlier, total dividend for the year will be 20 cents per share — less than half of the total dividend of 45 cents per share paid a year ago.

In a filing to SGX on Thursday, the group says “intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields.”

SIA says “the addition of more modern, fuel-efficient aircraft with new-generation cabin products is enabling the group to expand its network and enhance its competitiveness in both the full-service and low-cost market segments.”

In addition, more synergies are expected within the budget segment with Scoot and Tiger Airways preparing to operate under the single Scoot brand.

To continue to address the structural changes in the industry, SIA says it has launched a dedicated Transformation Office to conduct a wide-ranging review to better position the group for long-term sustainable growth across its portfolio.

Shares of SIA closed 2 Singaporean cents higher at S$10.76 on Thursday.