SIA Engineering Company has been actively buying back its own shares amid a general recovery of the aviation market. For the better part of August and September, the company has been buying back shares almost every other trading day.
The most recent acquisition was on Sept 29 when the company acquired 38,000 shares from the open market at between $2.37 and $2.40 each. This brings the total number of shares bought back under the current mandate to 302,700, equivalent to 0.0269% of the total base.
On the same day, the company announced the appointment of Chin Yau Seng, a long-time executive with the SIA group, as its new CEO, taking over from Ng Chin Hwee. SIA Engineering is the separately-listed servicing and maintenance arm of SIA, which maintains a stake of more than 77% in the unit.
In 1QFY2024 ended March, SIA Engineering reported earnings of $27 million, more than double the $12.8 million recorded in 1QFY2023. Revenue in the same period was up 52.7% to $261.9 million from a year ago.
Channel checks indicate that the maintenance, repair and overhaul market is becoming increasingly tight, says DBS in its 4Q outlook put out by its CIO office on Sept 27.
“While airlines still have a backlog of deferred maintenance to clear, we anticipate that MRO operators will experience increased demand over the next few years due to widespread technical issues with new generation engines, as well as prolonged OEM delivery delays that have prompted airlines to postpone the retirement of older aircraft,” says DBS.
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SIA Engineering and Overseas Education
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Private school CEO raises stake
Irene Wong Lok Hiong, CEO and executive director of Overseas Education RQ1 , saw an increase in her stake in the company. This followed a married deal with an undisclosed party involving nearly 3.99 million shares at 23 cents each.
The deal was conducted through an entity called WLH Private Limited, of which she is the sole owner. Upon the completion of this transaction, Wong, a co-founder of the company, now has a total stake of 135,87 million shares, equivalent to 32.71%, up from 31.75%.
Overseas Education runs the Overseas Family School, a leading private school here serving mainly children of expatriates.
In 1HFY2023 ended June, the company reported higher earnings of $4.44 million, up 56.4% from $2.84 million recorded in 1HFY2022. Revenue in the same period was up from $37.4 million to $43.59 million. No interim dividend was declared.
As at June 30, the company’s net asset value per share was 32.5 cents, bulk of which is the value of its campus at Pasir Ris.
Overseas Education attributes the higher revenue to the improvement in student enrolment after all border measures were fully lifted.
In response to shareholders’ questions on April 21, the company says that the average total student enrolment for FY2022 was 2250 students, up 7% from FY2021. For the school term that began on Jan 1, average fees increased by 6.5%.
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On the other hand, it incurred higher costs, largely from hiring more teachers to support the increase in student enrolment. Unsurprisingly, with higher interest rates, the company incurred higher finance costs of $2.17 million in 1HFY2023 versus $1.55 million in 1HFY2022.
In its earnings commentary, Overseas Education notes that barring the risks of a global recession, geopolitical tensions or a further wave of pandemic, Singapore expects the inflow of expatriate families relocating to Singapore will continue to recover.
“The group is cautiously optimistic that the student enrolment will also increase in tandem with the inflow of expatriate families entering and living in Singapore,” the company says.
“However, the group expects the foreign system schools’ landscape and the operating environment to remain competitive and challenging amid new entrants, rising costs and a high inflationary environment,” it adds.
