Skyway Aviation profits plummet 41% despite revenue growth as costs surge
Skyway Aviation Handling Company Plc reported H1 2026 pre-tax profit of N5.827 billion, down 41.49% from N9.958 billion in H1 2025, despite revenue growing 9.25% to N23.013 billion. Q2 pre-tax profit fell sharply to N1.928 billion, down 50.54% from Q1 2026 and 57.98% from Q2 2025.
Revenue growth came from import cargo handling (+44.19% to N5.538 billion), but passenger handling (71.5% of revenue) only rose 2.38% to N16.454 billion, and export cargo handling fell 11.37%. The revenue increase was overwhelmed by surging costs: direct costs jumped 63.07% (equipment repairs +117.81%, labor +53.90%, equipment running +202.94%), and administrative expenses rose 41.25%. This crushed margins – gross profit margin fell to 53.27% from 68.69%, and operating margin to 26.18% from 47.60%. Finance expenses nearly doubled (+194.62%), and the effective tax rate rose to 34.01% from 18.30%.
Despite asset growth (total assets up 63.40% to N86.548 billion), liquidity weakened with the current ratio falling to 1.76 times from 3.20 times. Yet Skyway's share price closed July at N171.20, delivering a 93.56% year-to-date gain – suggesting investor optimism contrasts sharply with weakening operational profitability and asset utilization (ROAA at 4.54%, ROE at 6.07%).
With aviation costs rising despite revenue growth, should travelers anticipate higher airfares or cargo fees, and are investors pricing in a recovery that operational results haven't yet delivered?