SIA Engineering net profit rises 23% to $33.2 million in first quarter

SINGAPORE - Aircraft maintenance provider SIA Engineering Company (SIAEC) has reported a net profit of $33.2 million for its first quarter ended June 30. This is up 23 per cent from $27 million for the corresponding year-ago period.

Demand for maintenance, repair and overhaul (MRO) services remained healthy in the three months, SIAEC said on July 26.

Earnings per share came to 2.96 cents for the first quarter of the financial year 2024/2025, up 22.8 per cent from 2.41 cents for the first quarter of FY23/24.

The group’s revenue, at $268.7 million, was 2.6 per cent higher than the year-ago period’s $261.9 million.

Group expenditure rose at a slightly slower rate of 2.4 per cent to $267.7 million, mainly due to higher material and manpower costs. The operating profit was thus also higher than that for the year-ago period.

“The number of flights handled by line maintenance in Singapore increased by 11.5 per cent year on year,” SIAEC said.

“Flight recovery at the end of June 2024 was approximately 95 per cent of pre-pandemic levels, compared with 84 per cent a year ago.”

But at base maintenance, fewer checks were completed in the quarter due to longer time spent on older generation aircraft with heavier work content.

Supply chain constraints also led to longer lead times to secure spare parts, causing longer durations for certain checks.

In May, the aerospace maintenance provider was appointed as Air India’s strategic partner for the development of its Bangalore base maintenance facilities, expected to be ready in 2026.

SIAEC noted that its share of profits from associated and joint venture (JV) companies also improved to $28 million for the quarter.

The share of profits from both the engine and component segment and the airframe and line maintenance segment increased year on year, it added.

Its component JV with aerospace company Eaton was incorporated on June 7 in Malaysia, increasing SIAEC’s portfolio of strategic partnerships to 24 subsidiaries and JVs across eight countries.

SIAEC expects demand for MRO services to stay healthy, with the upward trajectory of flight activity. But it noted persistent concerns over a tight labour market, supply chain issues and elevated costs.

“To capitalise on the demand recovery and manage the challenges, we remain committed to driving operational efficiency through our continuous improvement programme, maintaining cost discipline, and expanding our capabilities and geographical presence,” it said.

The counter closed at $2.29 on July 26, down 2 cents or 0.9 per cent, before the announcement.

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