A higher share of profits of associated companies boosted earnings at SIA Engineering in the second quarter, it reported yesterday.
Net profit rose 7.3 per cent to $38.1 million in the three months to Sept 30 compared with the same period last year while revenue edged up 3.7 per cent to $274.7 million.
Turnover was lifted by growth in airframe and component overhaul and line maintenance although this was partly offset by a decrease in fleet management revenue.
Earnings per share came in at 3.4 cents, up from 3.17 cents a year earlier. Expenditure rose 6.2 per cent to $255.2 million on the back of higher staff costs, an exchange loss of $1 million as well as a provision for impairment of trade debtors of $1.6 million. As a result, operating profit fell 20.4 per cent to $19.5 million.
The firm received a higher share of profits from associated companies, rising 48 per cent to $18.2 million.
Share of profits from joint venture companies slipped 4 per cent to $4.7 million.
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AT A GLANCE
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REVENUE
$274.7 million (+3.7%)
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NET PROFIT
$38.1 million (+7.3%)
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DIVIDEND
4 cents per share (unchanged)
Net profit slid 68.2 per cent for the half year to $74.3 million as the period last year included a gain from the divestment of the group's 10 per cent stake in Hong Kong Aero Engine Services to Rolls-Royce Overseas Holdings and Hong Kong Aircraft Engineering Company.
If the impact of the divestment is stripped out, half-year profit would have been 1.1 per cent higher.
Revenue for the six months rose 2.1 per cent to $547.5 million on the back of an increase in line maintenance revenue.
The company noted: "The maintenance, repair and overhaul (MRO) industry is faced with the challenges of new-generation aircraft and engines that require less frequent maintenance and lighter work content.
"Nonetheless, the significant increase in aircraft fleet will result in growth for the MRO industry."
It added that it continues to invest in new technologies and is building up capabilities for new-generation aircraft and engines.
The group has declared an interim dividend of four cents per share, the same as last year.
SIA Engineering shares closed unchanged at $3.26 yesterday.
Singapore Airlines releases its second-quarter results on Tuesday.
