SIA

SIA: UOB Kay Hian expects SIA to report a net loss of $37m in 4QFY14 on 8 May due to losses from associates, with the figure 30% lower than consensus. If House is right, earnings could disappoint the market. UOB KH maintains HOLD with TP of $10.70. House estimate the parent airline’s losses to shrink by 91% y/y on better cost control. However, lower JV and associate contributions (primarily Tigerair and Virgin Australia) are likely to be a drag on 4QFY14. The cessation of A345 non-stop flights to New York and Los Angeles would have lowered unit cost in 4QFY14, while cargo operations are likely to be in the red, given that the fourth quarter is traditionally a weak period for air cargo.