Published November 3, 2009

SIA Engineering Q2 earnings slide 16.8%

Revenue falls 11.2% amid slump in airframe, component overhaul work

By VEN SREENIVASAN

	Email this article
	Print article
	Feedback

SIA Engineering Co's (SIAEC) net profit for the second quarter ended September 2009 fell 16.8 per cent to $61.1 million, from $73.4 million a year earlier, amid a slump in airframe and component overhaul work.

Related links: Click here for SIAEC's earnings release Unaudited financial statements

Revenue for the quarter fell 11.2 per cent to $248.1 million, from $279.3 million for the corresponding July-September quarter in 2008.

The results translated into first-half earnings of $106.2 million, a 19.6 per cent slump from the previous year's $132.1 million. Revenue for the April-September 2009 period fell 7 per cent to $492.3 million, from $529.5 million.

The Singapore Airlines engineering subsidiary blamed the slide in topline and bottomline numbers on lower airframe and component overhaul work, material usage and less revenue from the B747-400 turnkey project.

But it added that this was partially mitigated by higher line maintenance revenue, with more flights handled and an increase in aircraft support work, and fleet management revenue.

Expenditure dropped $26.2 million or 11 per cent to $213 million for fiscal Q2, reflecting lower staff, subcontract and material costs.

Operating profit for the quarter was $35.1 million, a decrease of $5 million or 12.5 per cent over the same quarter last year.

Profits from associated and joint venture companies declined $7.7 million or 19.4 per cent to $32 million. This represented a contribution of 44.9 per cent to the group's pre-tax profits.

The basic earnings per share was 5.66 cents.

Still, the group had cash and deposits of some $302.2 million at the end of September, compared to $280.5 million a year earlier.

The company declared an interim dividend of 5 cents per share, unchanged from last year.

Despite lower overall numbers against a year ago, the higher second-quarter numbers compared to the first quarter reflected an improvement in the operating environment.

SIAEC has been enjoying a sequential increase in flights handled and aircraft support work, and fleet management revenue.

However, the company said the prospects for a sustained recovery remained uncertain.

'Ongoing efforts to extend market reach and increase product mix will continue with the aim of broadening the revenue base,' it said in a statement.

'The group will press on with its efforts to manage costs, optimise manpower deployment and improve productivity. With these measures in place, the group is well positioned to capitalise on opportunities.'

SIAEC shares closed trading yesterday at $2.75, down 5 cents.