SIA Engineering Q2 net profit up 87.6% to S$19.7m from stepped-up flight activities

SIA Engineering Company (SIAEC) posted a group net profit of S$19.7 million for its second quarter ended Sep 30, up 87.6 per cent from S$10.5 million in the same period last year, it said in a bourse filing on Tuesday (Nov 1).

Revenue for the quarter rose 38 per cent to S$190.7 million, up from S$138.2 million the year before, largely driven by higher flight activities and higher revenue across all segments, it said.

This took SIAEC’s basic earnings per share to 1.75 Singapore cents for the quarter, up from 0.94 cents the year before.

However, the group will not be declaring an interim dividend due to “operating losses and uncertainties in macroeconomic conditions”, it added. It posted an operating loss of S$6.8 million for the quarter, a deterioration of S$3 million from a loss of S$3.8 million in the year before.

Expenditure rose 39.1 per cent to S$197.5 million for the quarter due to lower government wage support, higher manpower costs and material costs, the group said, adding that revenue growth was not sufficient to offset the increase in expenditure.

SIAEC’s second-quarter figures brought its first-half net profit to S$32.5 million, up 30 per cent from S$25 million the year before.

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Revenue for the first half was S$362.2 million, up 37.5 per cent year on year.

The number of flights handled by SIAEC’s line maintenance unit in Singapore doubled year on year in the first half – representing approximately 55 per cent of pre-pandemic volume – as a result of Singapore removing most of its remaining travel restrictions, the group noted.

Maintenance, repair and operations services also rose in demand due to the increase in flight activities, as operators look to return grounded aircraft back to service, SIAEC said. It added that base maintenance secured new customers and a long-term contract during the period.

Work volume at engine and component shops was also higher, with “healthy improvement” in inductions. Inventory technical management services supported a larger fleet size due to a new contract secured and fleet growth of customer airlines, the group added.

“While recovery of the aviation industry continues to gain traction, the outlook is uncertain due to an elevated risk of a global recession and geopolitical tensions. In addition, high inflation, wage pressure and cessation of wage support will pose challenges,” said SIAEC, adding that the group will “maintain vigilance and nimbleness” in managing costs.

Along with its transformation efforts, the group said it will seize opportunities to broaden its customer base, develop new capabilities and expand its geographical presence through acquisitions and partnerships to achieve sustainable business growth.

Shares of SIAEC closed at S$2.22 on Tuesday, up S$0.06 or 2.8 per cent, before the release of the results.