SIA Engineering posts S$33.2m net profit in Q3, lifted by one-time write back

SIA Engineering S59 , the maintenance arm of Singapore Airlines C6L , posted a net profit of S$33.2 million for the third quarter ended Dec 31, 2021, up S$25.5 million from S$7.7 million the previous year, it said in a business update.

Excluding government wage support and a one-time write back of tax provisions, SIA Engineering would have been in a loss position of S$7 million.

Even with the progressive opening of vaccinated travel lanes, the group said on Monday (Feb 21) that recovery remains uncertain given that recent spikes in Covid-19 cases as a result of the Omicron variant has disrupted international air travel.

The group recorded revenue of S$140 million for the quarter, 33.8 per cent higher than the S$104.6 million reported over the same period the previous year. This was attributed to the increase in transit handling-related revenue due to the higher number of flights handled.

Expenditure rose at a higher rate of 42.8 per cent to S$147.8 million as the government wage support weaned. Excluding the impact of government wage support, expenditure would have increased by just 12.4 per cent.

Earnings per share stood at 2.96 Singapore cents as at Dec 31, 2021 from 0.69 cents the year before. Net asset value per share came in at 142.4 cents compared with 135.8 cents previously.

The number of flights handled at the group's Singapore base was 65 per cent higher year-on-year and 17 per cent higher quarter-on-quarter. While this volume of flights handled is only at 31 per cent of pre-pandemic volume, the group said the recovery trend is encouraging.

SIA Engineering said that it will strengthen its maintenance, repair and operations (MRO) ecosystem and sustainable growth beyond the pandemic.

It has, for instance, pursued business expansion and extended its geographical reach through acquiring a 75 per cent stake in SR Technics Malaysia, which boosts the capabilities of its newly formed component services division.

On the sustainability front, SIA Engineering has successfully tested the use of sustainable aviation fuel. Its subsidiary, SIA Engineering (Philippines) Corporation, also recently signed an agreement to collaborate with an aircraft part-out specialist to provide sustainable, end-to-end aircraft recycling solutions

Shares of SIA Engineering ended Monday flat at S$2.32.