SIA

SIA Earnings preview: UOB Kay Hian expect earnings to decline 56% yoy, marginally lower than consensus estimate of a 48%yoy decline. SIA will report its 4Q12 earnings after the mkt closes on 9 May. Overall, maintains Hold with $11.90 TP. Expect SIA to report a 61% yoy decline in net profit for 4QFY12 and a 60% decline in FY12’s net profit to S$440m. Consensus meanwhile, expects FY12 net profit of $454m, implying 4QFY12 net profit of $89m. Key factors would be pax yields as every 0.1c. Decline in pax yields from base assumption, lowers net profit by 31%. On the cost side, expect unit cost to rise yoy due to higher fuel prices and start-up costs from Scoot. This should be compensated by a stronger SGD, leading to lower lease costs.