SIA Engineering records 35.5% increase in net profit for Q1

SIA Engineering Company (SIAEC) reported an increase in net profit for its first quarter ended June on the back of higher revenue, as the number of flights handled continued to increase.

In a business update on Friday, it said that net profit for the three months rose 35.5 per cent to S$14.5 million, up from S$10.7 million in the prior-year period.

This came as the group's revenue rose to S$125.3 million during the quarter, up from S$118.5 million a year earlier.

However, SIAEC noted that the performance for the quarter continued to be supported by grants from government support schemes, most significantly, the Jobs Support Scheme (JSS).

It said: "Although support from JSS was lower than the same period last year, it substantially cushioned the impact of low flight activities. Without this support, the group would have recorded a loss of S$24.1 million."

SIAEC said the number of flights handled continues going up, but the pace of recovery slowed during the quarter, as rising number of cases of the more infectious variant of Covid-19 resulted in tightening of border restrictions.

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It noted that the number of flights handled at its Singapore base during the quarter was up 97 per cent year on year, from last year's low base.

"However, as compared to last quarter, the increase was only 13 per cent, with the increase largely coming from the base carriers at Changi Airport," it added. "Flight activities at our overseas line-maintenance companies experienced similar slow recovery over the last quarter."

Cost-management measures partially offset lower grants from government support schemes, but the group's expenditure still climbed slightly to S$128.2 million. The group's operating loss of S$2.9 million was around a third of the S$8.6 million loss incurred in the year-ago quarter.

In terms of outlook, SIAEC noted that amid global vaccination efforts, countries with high vaccination levels are looking into easing travel restrictions. However, it added: "The trajectory for a sustained recovery remains uncertain and rests on the global vaccination and infection rates, as well as border restrictions."

SIAEC does not expect any meaningful increase in flight frequencies to materialise in the short term, and the company said it is "pressing ahead with its transformation efforts to emerge stronger in the post Covid-19 future".

SIAEC shares closed unchanged at S$2.08 on Friday, before the announcement.