Thanks to the boost from its Rolls Royce JV, Singapore Aero Engine Services Private Limited.
SIA Engineering Company (SIAEC) soared in Q3 largely thanks to support from the income of its joint ventures (JV), which rose 4% YoY and 44% QoQ to $54.8m.
According to DBS Equity Research, if it weren't for the JVs, SIAEC's operating profits remained below historical trend levels at $18.2m.
The JV profits are mainly from Singapore Aero Engine Services Private Limited (SAESL), which is the engine JV with Rolls Royce.
"There was no mention of extraordinary items at the JV level, so this could point to an upswing in work, albeit it could be too early to call for a secular recovery from one quarter of strong earnings," said DBS analyst Glenn Ng.
Associate profit contribution was $17.9m this quarter was comparable to the previous few quarters.
SIAEC also completed the sale of its stake in former associate Asian Compressor Technology Services Company Limited (ACTS) on 22 January 2018, which should result in a one-off gain of $14.4m and cash proceeds of $14.7m in the next quarter.
Ng added, " Given the relatively small size of the sale, we don’t think this points to any sort of special dividend at financial year-end (March 2018)."
Do you know more about this story? Contact us anonymously through this link.