Singapore’s Changi Airport Group (CAG) has reported a financial turnaround, with earnings of $33 million for the fiscal year ending 31 March 2023.
In a statement issued on 2 June, CAG noted that the recovery in Changi Airport’s passenger traffic resulted in the Group’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) growing to S$751 million in FY2022/23.
This is significant increase from S$232 million in the previous fiscal year, marking a return to profitability with a net profit of S$33 million, a significant swing from the previous year’s net loss of S$838 million.
As of March 31, 2023, the Group’s total equity attributable to the shareholders amounted to S$6.3 billion, slightly higher than the previous fiscal year’s S$6.2 billion.
CAG added that with the group’s liquidity position remained healthy with S$2.1 billion in cash and marketable securities, compared to S$1.9 billion in FY2021/22.
Eightfold increase in passenger movements to 62% of pre-pandemic levels
The relaxation of border restrictions in April 2022 fueled a steady rise in passenger traffic at Changi Airport, reaching 82% of pre-Covid levels by March 2023.
In total, the airport recorded a year-on-year (YoY) eightfold increase in passenger movements, totalling 42.6 million, or 62% of pre-pandemic levels.
Air traffic movements also doubled YoY to 257,000, accounting for 67% of pre-Covid levels, which in turn supported the partial recovery in revenues from airport services and airport concessions.
Meanwhile, at Jewel, Changi Airport’s iconic mall, footfall more than doubled as international travel resumed, with the mall nearing full occupancy.
Consequently, the Group’s overall revenue doubled to S$1.9 billion, compared to S$0.9 billion in the previous fiscal year (FY2021/22).
Operating expenses (Opex) increased by 42%
Despite the positive financial results, the Group’s operating expenses (Opex) increased by 42% YoY to S$1.2 billion in FY2022/23, excluding depreciation and amortization charges of S$0.7 billion.
CAG said the rise in costs can be attributed to increased business activities, core operating and maintenance costs, as well as soaring energy prices, particularly electricity costs, which tripled during the year.
“Covid-related government support was also progressively scaled down with traffic recovery. To address the escalation in its cost structure, the Group continues to leverage technology and innovation to drive productivity and efficiency in its operations.”
Four fully operating terminals by October 2023
Mr Tan Gee Paw, Chairman of CAG, expressed his satisfaction with the airport’s recovery, stating, “2022 was a significant year of recovery for the aviation industry and Changi Airport.”
“CAG prepared well for this and we successfully ramped up operations to meet the increase in passenger numbers. With the planned reopening of Terminal 2 North, we will have four fully operating terminals by October 2023.”
He further highlighted the airport’s commitment to providing an exceptional travel experience, recognizing the support and collaboration of all partners and staff within the airport community.
Mr Lee Seow Hiang, CEO of CAG, said: “To cater to the surge in travel demand last year, we worked hard to reopen our terminals in a timely manner and carried out a fundamental and crucial rebalancing of airlines across our four terminals to optimise Changi Airport’s operations.”
“Amid stiff challenges to secure the necessary manpower resources, we stayed agile and focused on driving transformation to strengthen our operational capabilities and keep our service levels high.”
He added that CAG remains optimistic about the recovery of passenger traffic, aiming to reach pre-pandemic levels by 2024.
“However, as we approach a return to normalcy, we are cognisant of new frictions and hurdles that can hamper growth. These include aircraft availability and long-term changes to travelling behaviour.”
“For these reasons, we remain vigilant and will continue to pave the way forward with our emphasis on sustainable travel and building for the future through innovation.”