SIA Engineering's gains would have been 7.7% higher if it weren't for these draggers

SIAE would've hit S$72m profit.

According to CIMB, 2QFY13 net profit was in line at 23% of our and consensus FY13 forecasts. 1H13 formed about 48% of our FY13 number, backed by a steady workload from materials, line maintenance, and fleet management.

Here's more from CIMB:

We upgrade our target price as we roll over our blended P/E and DCF valuations to CY14. We see catalysts from stronger-than-expected MRO demand.

Although still in line with our expectations, 2QFY13 net profit dipped 4% qoq to S$67m. EBITDA margins fell by 34bp qoq to 13.9%, mainly affected by a forex loss of S$3.5m and S$1.7m in provision for stocks obsolescence.

Without these, SIAE’s 2QFY13 net profit would have been 7.7% higher or S$72m. S$/US$ appreciated by about 3% since end-June 12. Hangars are booked out SIAE’s hangars are busy with scheduled D checks of SIA’s aircraft in 2012-13.

In our estimation, these would comprise the first “D” checks for six A380s and 12 B777-312s. Line maintenance continues to be supported by stable traffic in Changi Airport with 4% yoy growth in aircraft handled to 884/day.

The increase in the number of aircraft participating in the fleet management programme (about 180 in FY13 vs. 160 in FY12) could also be an earnings growth engine.

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