SIA Engineering posts 11.7% fall in Q1 profit

Mainboard-listed SIA Engineering reported an 11.7 per cent year-on-year fall in first-quarter net profit to $12.8 million.

Excluding the benefit of government wage support, profit for the three months to end-June would have fallen to $4.2 million.

In a business update on Monday, the aircraft maintenance company reported that first-quarter revenue increased 36.9 per cent year on year to $171.5 million.

This was driven by an increase in line maintenance revenue as a higher number of flights were handled. The number of flights handled last month reached 55 per cent of pre-pandemic volume.

The firm reported 42 per cent quarter-on-quarter growth or doubled year-on-year growth in flights handled in the first quarter.

The aviation sector experienced signs of a strong recovery in the last quarter, as the lifting of travel restrictions in many countries led to a surge in flight activities.

Apart from North Asia, rising coronavirus infections have not appeared to dampen the demand for international travel, SIA Engineering said.

It added, however, that many challenges remain that can affect the pace of recovery.

These include the aviation industry's growing manpower crunch, the risks of rising inflation, higher interest rates and recession, supply chain disruptions arising from the Russian-Ukraine conflict, and threats of outbreaks from new Covid-19 variants.

"The group is closely monitoring these issues and will stay nimble as we manage the recovery," said the company.

"With government wage support ending in July 2022, we continue to exercise financial prudence."

Shares of SIA Engineering were down two cents to $2.41 yesterday.

THE BUSINESS TIMES