SIA Engineering Q1 net profit more than doubled to S$27 million
Janice Lim
ON THE back of a steady recovery of the travel sector post-Covid-19, aircraft maintenance provider SIA Engineering Company’s (SIAEC) net profit more than doubled to S$27 million for the first quarter of the financial year 2023 and 2024 ended Jun 30, compared with S$12.8 million in the same period a year ago.
Gross revenue for the quarter jumped 52.7 per cent to S$261.9 million from S$171.5 million over the same period, driven by higher demand for the maintenance, repair and overhaul (MRO) of aircrafts, reported the mainboard-listed company in a bourse filing on Tuesday (Jul 25).
Basic earnings per share as at June 30 was 2.41 Singapore cents, up from 1.14 cents a year ago.
Operating profit was black for the first time since the onset of the pandemic at S$0.4 million, compared with a loss of S$4 million a year ago.
Expenditure also increased, but at a slightly lower rate of 49.0 per cent, to $261.5 million. This was mainly due to higher manpower costs and material costs, as well as the absence of government wage support.
The number of flights handled by SIAEC’s line maintenance unit in Singapore recovered to 84 per cent of pre-pandemic levels.
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The company also said that more hangar checks were completed, while its component and engine shops continued to see a sustained increase in work demand, consistent with increased flight activities.
A similar trend was observed in the work volume from airline customers under the inventory technical management programme.
However, SIAEC also noted that, even as demand has been increasing, supply chain issues still persist in some parts of the business. Nonetheless, the operational impact still remains manageable.
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SIAEC said that the outlook for global air travel demand continues to be strong.
“While this bodes well for demand for MRO services, further recovery in MRO demand will be at a slower pace than the rate of recovery over the past year as airlines manage various constraints to return fully to pre-pandemic flight levels,” read the filing.
“In addition, ongoing geopolitical tensions and macroeconomic uncertainties, inflationary pressure and supply chain disruptions present challenges to business recovery and operating margins.”
SIAEC said it will continue to be vigilant in managing cost and to drive improvements in productivity and efficiency.
“The Group will continue to seize opportunities to invest in broadening our MRO capabilities and expanding our geographical presence for further growth, while nurturing and managing our portfolio of partnerships and joint ventures,” read the filing.
Shares of the company rose 0.6 per cent or S$0.015 to S$2.42 on Tuesday.
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