SIA Engineering announced that it has reversed back into profitability in 1HFY2022 ended September with earnings of $25.0 million, compared to a loss of $19.0 million in 1HFY2021. Included in last year’s poorer performance was an impairment provision of $35.0 million on the group’s Base Maintenance unit’s asset.
This came on the back of an 18.2% y-o-y increase in revenue to $263.5 million from $223.0 million a year ago, largely driven by higher flight activities.
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Group expenditure at $270.2 million was 8% higher y-o-y mainly due to lower government wage support and the phased rollback of manpower management measures as flight activities increased and in preparation for further recovery. Consequently, the group incurred a lower operating loss of $6.7 million as compared to the operating loss of $27.2 million in the same period last year.
Share of profits of associated and joint venture companies was 5.6% lower y-o-y at $26.8 million. This consists of $32.3 million profit contribution from the engine and component segment offset by a $5.5 million loss from the airframe and line maintenance segment. Contributions from the engine and component segment declined by 14.8% y-o-y while the airframe and line maintenance segment recorded an improvement of 42.1% y-o-y.
Government wage support recognised during the period was lower than the same period last year as wage support has been progressively stepped down. Nonetheless, it continued to significantly mitigate the costs of retaining staff. Without this support, the group would have recorded a loss of $39.5 million.
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Since the group would have made a loss without government support, it will not be declaring any interim dividend.
As at end-September, cash and cash equivalents stood at $685.6 million.
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On the outlook, SIA Engineering says in its results release, “While we are ensuring our readiness to scale up at the appropriate levels to meet the changing demands for MRO services, the performance going forward will be dependent on the revenue recovery outpacing the tapering off of government wage support and our gradual and prudent reinstatement of manpower management measures. We will continue to exercise financial discipline in managing our cost.”
“Alongside efforts to develop new businesses and reshape our portfolio of joint ventures, we are pressing ahead with the various pillars of our Phase 2 Transformation programme to enhance our efficiency and create value for our customers. We will continue in our pursuit to emerge stronger through investments in new capabilities, technologies and services to expand our market growth and reach,” it adds.
Shares in SIA Engineering closed at $2.22 on Nov 5.
Photo: SIA Engineering
