Singapore Airlines Ltd’s Business: 4 Things Investors May Not Know, But Ought To

As the operator of Singapore’s national airline, Singapore Airlines Ltd (SGX: C6L) is probably one of the most recognisable companies here amongst investors.

But, there may still be things about Singapore Airlines’ business that many investors are unaware of. Here are four:

1. It has a growing business

Singapore Airlines has experienced strong growth in operating profit in recent years. In fiscal 2014 (year ended 31 March 2014), the company had generated S$259 million in operating profit. In fiscal 2015, this had grown to S$410 million. In fiscal 2016, this had soared further to S$681 million.

Moreover, the total number of passengers carried by the company in fiscal 2016 had stepped up by 3.7% from fiscal 2015.

2. It has a balance sheet with more cash than debt

Running an airline is a capital intensive business. But, Singapore Airlines has managed to end its latest quarter (the second-quarter of 2016) with more cash than debt. It has S$4.8 billion in cash and short-term investments and just S$1.3 billion in total borrowings.

3. There is more than just one airline

Singapore Airlines the company runs Singapore Airlines the full-service carrier. But, the company actually has a few more airlines under its umbrella. You can see them below:

Source: Singapore Airlines fiscal 2016 Annual Report

Singapore Airlines also has a majority stake in SIA Engineering Company Ltd (SGX: S59).

SIA Engineering provides maintenance, repair, and overhaul (MRO) services to airlines and it has over 80 airlines in its client base. Over the past decade, the company has generated stable net profit as you can see in the chart below:

Source: S&P Global Market Intelligence

4. It has a major long-term shareholder

Lastly, Singapore Airlines is 55.33% owned by Temasek Holdings, one of the Singapore government’s investment arms, as of 2 June 2016. In fact, Temasek Holdings has been the majority owner of Singapore Airlines going back to at least 10 May 2001.

Having a stable majority owner could allow Singapore Airlines to focus on the long-term with its business instead of worrying too much about short-term impacts.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.