SIA Engineering Co H2 net profit sinks 92.7% to S$7.8m

SIA ENGINEERING Co (SIAEC) managed to stay in the black in the second half of its financial year, with generous help from government wage subsidies even as the company pared staff, sub-contract and material costs.

Still, SIAEC could not stave off a full-year loss, said the maintenance, repair, and operations (MRO) service provider in a bourse filing on Tuesday.

Net profit was S$7.8 million for the six months to March 31, down by 92.7 per cent from S$106.2 million in the year before. Revenue fell by 54.3 per cent, to S$220.0 million.

Earnings per share stood at 0.69 Singapore cent, compared with 9.48 cents before; its net asset value slipped to 136.8 cents a share, from 145.4 cents previously.

SIAEC said in its financial statements: "The start of the financial year saw the most severe impact of the Covid-19 pandemic on flight activities with a record low number of flights handled in April and May 2020. Since then, the number of flights handled has been recovering, albeit at a slow pace.

"All business segments were gravely affected throughout the financial year."

For the 12 months, SIAEC swung into a net loss of S$11.2 million, from net profit of S$193.8 million previously. Revenue shrank by 55.4 per cent, to S$443.0 million.

Without public support such as the Jobs Support Scheme, SIAEC would have posted a loss of S$192.4 million, the group said, while noting that it made significant provisions for the impairment of assets in the year, such as S$35.0 million for its base maintenance unit's assets and S$11.4 million on its investment in an engine programme.

SIAEC's full-year loss per share was 1.00 cents, compared with earnings per share of 17.30 cents in the previous financial year.

The group is now holding out for a meaningful demand for MRO services, as global vaccine roll-outs support a revival of air travel, but warned that fresh outbreaks and the emergence of new virus variants mean that the aerospace recovery "is still fraught with risks".

SIAEC disclosed that it would both continue reviewing and rationalising its portfolio, as well as pursue new opportunities for expansion.

Given the financial damage from Covid-19, the board said that it would not recommend a dividend for the full year, after paying out S$0.08 a share the year before.

The directors took into account SIAEC's losses, as well as "the need to retain financial flexibility to pursue business opportunities", it said.

Its shares closed on Tuesday at S$2.26, up by S$0.02 or 0.89 per cent, before the news.