Hong Kong Aircraft Engineering (HAECO) has reported a 45% dip in its 2013 net operating profit to Hong Kong dollars (HK$) 228 million ($29.3 million).
The MRO group's turnover increased by almost 27% to HK7.38 billion, while profit attributable to shareholders fell by 24% to HK$625 million. Operating expenses were up 34% to HK$7.2 billion.
Taikoo (Xiamen) Aircraft Engineering (TAECO) recorded an improvement of 12% in its turnover, as reflected in the increase in workload such as airframe maintenance, manufacturing and technical training, and cabin completion works works.
HAESL recorded a 16% decline in profit, caused by the lower number of Rolls-Royce engines overhauled. This was attributed to the early retirement of Boeing 747-400 aircraft. It also expects financial performance to be adversely affected by a continued decline in demand for engine overhaul services, until the Trent XWB engines starts to generate revenue for the firm in 2016.
Taikoo Engine Services Xiamen (TEXL) became profitable in 2013 on the increased output from maintaining General Electric GE90 engines, as compared to 2012. It expects demand for engine overhaul work to remain firm.
The operations of Taikoo (Xiamen) Landing Gear Services (TALSCO) continued to be affected by the fire that occurred in November 2012. Although operations resumed in December 2013, no landing gear overhaul work was done during the entire year.
In October 2013, HAECO agreed to acquire US MRO firm TIMCO through its subsidiary HAECO USA Holdings, and this was completed in February 2014. The purchase of TIMCO will enable the acceleration in the development of technical capabilities while catering to an expanded range of products, including for narrowbody and regional aircraft.
“The Group’s operations in Hong Kong continue to suffer from shortages of skilled and semiskilled labour and, as a result, airframe maintenance capacity in 2014 is expected to remain low. We continue to improve remuneration, career development opportunities and training. The rate of attrition of staff has slowed, but it takes a long time to train new staff to reach required standards. Demand for line maintenance services in Hong Kong is expected to remain stable,” adds HAECO’s chairman Christopher Pratt.