SIA Engineering Q3 net profit falls 61% to S$12.8 million as wage support ends
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DESPITE higher revenue, SIA Engineering Company (SIAEC) reported on Friday (Feb 17) lower net profit for its third quarter (Q3) ended Dec 31, 2022, as pandemic-related wage support ended.
Net profit for the three months fell to S$12.8 million, down 61.4 per cent from S$33.2 million in the corresponding period a year earlier. On a per-share basis, earnings fell to S$0.0114 in Q3 FY23, from S$0.0296 in Q3 FY22.
The lower net profit came amid higher group expenditure, mainly due to the absence of wage support. SIAEC said in its business update on the Singapore Exchange that this was the first quarter since the pandemic with no wage support.
Excluding last year’s wage support and one-time tax write-back, SIAEC said net profit would have been S$19.8 million higher year on year.
The group reported revenue of S$208.1 million for Q3 FY23, an increase of 48.6 per cent on year, as flight activities continued to recover during the quarter. Revenue growth was registered across all business segments, said SIAEC.
However expenditures also rose 49.3 per cent to S$220.6 milllion, mainly due to the absence of wage support. Excluding the impact of wage support, expenditure was up 35.5 per cent, mainly due to manpower costs.
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SIAEC said that excluding the impact of wage support and exchange loss arising from the weakening of the US dollar against the Singapore dollar, operating performance in Q3 improved year on year and quarter on quarter.
For the nine months ended December 2022, SIAEC revenue rose to S$570.3 million, from S$403.5 million in the year-ago period. Net profit for the 9 months fell to S$45.3 million from S$58.2 million a year earlier.
As at Dec 31, 2022, net asset value per share stood at S$1.472. The group had total assets of S$1.9 billion, and it had a cash balance of S$576.8 million, with no borrowings.
SIAEC said the reopening of China’s borders is a “positive development for a faster and full recovery of the aviation industry”.
But it noted that challenges such as risk of global recession, inflationary pressures and geopolitical uncertainties still remain on the path to recovery.
“As the group ramps up resources in anticipation of further recovery, we will closely manage the rising costs and continue to scale up our efforts in automation and lean practice adoption,” SIAEC said.
“We will seize opportunities to broaden our customer base, develop new capabilities and expand our geographical presence through acquisitions and partnerships to achieve sustainable business growth.”
SIAEC shares fell 1.2 per cent or S$0.03 on Friday to close at S$2.43, before the business update.
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