SIA Engineering's Q1 net profit rises 2.7% on lower expenses

Singapore

LOWER expenses, mainly owing to a reduction in material cost, boosted SIA Engineering Group's first quarter net profit by 2.7 per cent to S$41.6 million from S$40.5 million a year earlier.

This was achieved despite a flat revenue of S$258.1 million, up a mere 0.2 per cent up from the previous corresponding period's S$257.7 million.

Revenue from the airframe and line maintenance segment was S$2.3 million higher but this was partially offset by a S$1.9 million decrease in revenue from the engine and component segment, said the company in a statement on Friday.

Operating profit rose 74 per cent to nearly S$18 million on the back of a nearly 3 per cent fall in expenditure to S$240.4 million, owing to a reduction in material costs.

Share of profits of associated and joint venture companies came in at S$26 million - 19.8 lower year-on-year, with the engine and component segment turning in a profit of S$26.7 million and the airframe and line maintenance segment incurring a loss of S$700,000.

Contributions from the engine and component segment fell S$6.1 million, mainly due to higher expenses incurred by an engine centre as it gears up for new engine capabilities, while contributions from the airframe and line maintenance segment decreased by S$300,000.

Earnings per share for the quarter stood at 3.72 Singapore cents, up from 3.62 cents a year ago.

The company said it has begun to note improvement in manpower utilisation, productivity and turnaround time from its transformation initiatives and adoption of technologies and that more initiatives will be implemented company-wide to better performance. Nonetheless, the operating environment remains challenging, it added.

The stock closed two cents, or 0.8 per cent, lower at S$2.65 on Friday.