SIA Engineering’s Q2 operating profit hit by higher costs and MYAirline’s provision

SIA Engineering swung into the red for the second quarter of FY2024 at the operating level, partly due to the debt impairment provision arising from the suspension of its Malaysian customer MYAirline. The aircraft maintenance, repair and overhaul (MRO) services provider declined to disclose the quantum set aside to allow for uncollected payments from the budget carrier.

Last October, Singapore mainboard-listed SIA Engineering announced that it had signed a 10-year agreement with MYAirline to provide support services to its aircraft. However, MYAirline announced three weeks ago that it had suspended all operations with immediate effect, citing financial problems.

Chief financial officer of SIA Engineering, Ng Lay Pheng, acknowledged at a results briefing on Friday (Nov 3) that the debt impairment provision in relation to MYAirline was significant relative to the operating profit of S$100,000 for the first half of FY2024 ended September. At the operating level, SIA Engineering posted a profit of S$400,000 for the first quarter but a loss of S$300,000 for the second quarter.