SIA Engineering Company (SIAEC) S59 : S59 0% posted a group net profit of S$10.5 million for the second quarter ended Sep 30, up S$40.2 million from the loss in the year-ago period, it announced in a results release on Nov 5 after market close.

This took basic earnings per share to 0.94 Singapore cents for the quarter, and 2.23 Singapore cents for the half-year.

But SIAEC said it would not be declaring an interim dividend, as the group's half-year performance "would have been loss-making had it not been for the government wage support". Flight recovery has been slow and gradual, with its outlook remaining uncertain, it added.

Operating loss in Q2 narrowed to S$3.8 million, an improvement of S$14.8 million from the year-ago period's loss. Revenue rose 32.2 per cent to S$138.2 million as flight activity picked up.

The second-quarter figures brought first-half net profit to S$25 million, reversing from the year-ago loss of S$19 million. Last year's poorer performance included an impairment provision of S$35 million on its base maintenance unit's assets, noted SIAEC.

Revenue for the first half was S$263.5 million, up 18.2 per cent year on year.

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The number of flights handled by SIAEC's line maintenance unit in Singapore was up 84 per cent year on year in the first half, but this represents only 25 per cent of the pre-pandemic workload, said SIAEC.

For base maintenance, the number of aircraft maintenance checks was up year-on-year, but "many of these checks were of lighter work content".

Work volume for the fleet management business remained low, due to low flight hours and retirement of customers' older aircraft.

"While high vaccination levels achieved in major developed markets have enabled the easing of travel restrictions, there remain uncertainties for a sustained global recovery," said SIAEC, noting risks of new variants, spikes in infection rates, or tightening of restrictions.

Still, the group is "encouraged" by the Singapore government's expansion of bilateral agreements for quarantine-free travel for fully vaccinated travellers.

SIAEC is getting ready to scale up and meet changing demand for maintenance, repair and overhaul services, but "the performance going forward will be dependent on the revenue recovery outpacing the tapering off of government wage support and our gradual and prudent reinstatement of manpower management measures," it added.

SIAEC said that besides developing new businesses and reshaping its portfolio of joint ventures, it is continuing with its transformation drive for greater productivity.

SIAEC shares closed up S$0.03 or 1.37 per cent at S$2.22 on Friday before the results were released.

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