Singapore Airlines' engineering arm has reported that third-quarter net profits rose 6.5 per cent to $52.6 million. The bottom line got a $2.3 million boost on the partial disposal of an associated company, while the same quarter last year was dragged down by provisions for closure costs and impairment of two associated companies, SIA Engineering (SIAEC) said yesterday.
Operating profits for the three months ended Dec 31 fell 13.1 per cent to $25.2 million year on year. Revenues fell by 1.1 per cent to $272.3 million, mainly from lower aircraft fleet management and airframe and component overhaul work.
For the quarter, share of profits of joint venture companies was $14.3 million, $3.2 million lower than the same quarter last year.
However, contributions from associated companies rose by $1.6 million or 10.2 per cent to $17.3 million. Quarterly earnings per share was 4.69 cents, up from 4.4 cents a year earlier, while net asset value per share was $1.36 as at Dec 31, up from $1.32 as at March 31 last year.
Profits for the nine months from April to December came to $286.5 million, 112 per cent higher year on year, mainly due to divestment gains.
AT A GLANCE
NET PROFIT: $52.6 million (+6.5%)
REVENUE: $272.3 million (-1.1%)
Revenue dipped by 1.2 per cent to $808.7 million while expenditure rose 2.6 per cent to $760.6 million.
The operating environment of the aerospace industry remains challenging in the face of persisting global economic uncertainties, SIAEC said.
In line with its commitment to pursue strategic partnerships, the firm signed an agreement with Moog to establish a Singapore-based joint venture to overhaul Moog's products, which include components on flight control systems for new-generation aircraft, like the Boeing 787 and the Airbus A350.
With the incorporation of Heavy Maintenance Singapore Services in October, the joint venture with Airbus will have access to a larger market.
"While these and other recently formed joint ventures position the company well for the future, they are not expected to be accretive in the near term," SIAEC said.
"As part of ongoing efforts to remain competitive, we will continue to enhance operating off-licences and manage costs, including investing in new technologies and advancing innovation."
The company's shares fell one cent to close at $3.52 before the results were released.