Lower revenue, rising costs eat sharply into SIA Engineering's Q2 profit

SINGAPORE - SIA Engineering's second quarter net profit dived by 40.7 per cent to $42.1 million.

This was on the back of a 3 per cent drop in revenue to $285.2 million for the three months to Sept 30, with lower airframe and component overhaul revenue offset in part by higher fleet management revenue.

The increase of $3.9 million or 1.5 per cent in expenditure to $269.3 million was primarily attributable to higher subcontract costs.

Operating profit for the quarter plunged by 44.2 per cent to $15.9 million.

Share of profits from associated and joint venture companies declined by 36.2 per cent to $29.1 million.

Contributions from the engine repair and overhaul centres at $20 million was $13.4 million or 40.1 per cent lower.

Earnings per share fell to 3.75 cents from 6.39 cents previously while net asset value per share eased to $1.135 compared to $1.22 as at March 31.

Looking ahead, SIA Engineering noted its performance continues to be affected by the decline in engine shop visits and heavy checks.

Pressure on margins has not abated with rising business costs and intense competition.

"We are stepping up efforts to improve productivity to stay competitive in this overall challenging environment," it said in a statement on Tuesday.

It will pay an interim dividend of six cents a share, down from seven cents last year.