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SIAEC downbeat as full-year profit drops 28%

SIA Engineering (SIAEC) reported a 28% fall in operating profit to S$56.8 million ($41.6 million) for the 2018 fiscal year, amid a challenging operating environment that shows little sign of changing in the near-term.

Revenue for the year ended 31 March dropped 6.8% to S$1.02 billion, due to a decline in airframe and fleet management revenue.

SIAEC’s expenses fell 5.1% to S$964 million, led by a reduction in material and subcontracting costs arising from the lower workload, it says.

Net profit decreased 14% to S$161 million.

Profit from associated and joint venture companies increased 3.7%, led by contributions from its engine and component segment which grew S$5.5 million.

For the quarter ended March 2019, operating profit dipped 8.5% to S$19.4 million as revenue fell 7.4% to S$256 million, due to lower line maintenance revenue, as well as reduced fleet management activities. Attributable net profit came in at at S$49.3 million, down 12%.

In its outlook, SIAEC says the MRO operating environment “remains challenging”, and has been compounded by “the unforeseen grounding of customers’ aircraft” - likely referencing the global grounding of the Boeing 737 Max fleet.

It says that it will be continue rolling out its “transformation journey” to increase productivity over the next three years.

SIAEC recently announced a new line maintenance joint venture with Thailand’s NokScoot.

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