SIA Engineering's full-year net profit jumps 88.2% to $332.4m
Thanks to the divestment gains from selling stakes in HAESL.
SIA Engineering ended its financial year with a bang as it recorded an 88.2% increase in net profit.
According to the group, this is due to the 141.6m gain from the divestment of its 10% stake in Hong Kong Aero Engine Services (HAESL) to Rolls-Royce Overseas Holdings and Hong Kong Aero Engineering Company (HAECO).
This came as full-year revenue decreased by 0.8% to $1.1b, mainly due to the fleet management.
Meanwhile, its expenditure increased by 2.4% to $224.8m. This is because of the uptick in staff costs, offset in part by lower subcontract cost. The increase in staff costs was due mainly to a provision made in the first quarter for the increase in the profit-linked component of staff remuneration arising from the gain on divestment of HAESL, based on profitability-related key performance indicators.
"Salary increments and an increase in overtime as more staff are released for training on new aircraft types also contributed to the increase in staff costs. Operating profit before the provision was $93.3m, a decrease of $11.1m or 10.6%. Operating profit after taking into account the one-time impact on staff costs arising from divestment was $72.0m," the group said.
Here's SIA Engineering's outlook for the next quarters:
In spite of global uncertainties and the challenges the Company already faces in the maintenance, repair and overhaul sector from excess capacity and aggressive pricing, there remain growth opportunities. The Company continues to invest in strategic partnerships and advancing innovations, and maintain vigilance on costs.
During the year, a Joint Venture Agreement was signed with Moog Incorporated to establish a joint venture for repair and overhaul services of Moog’s products on the new-generation Boeing 787 and Airbus A350 aircraft. This followed earlier strategic tie-ups with Boeing on fleet management and Airbus on heavy maintenance business.
We also signed a Memorandum of Understanding with Stratasys Ltd., a leading 3D printing and additive manufacturing solutions company, to offer design, engineering, certification support and parts production to our global network of airline customers. These investments are not expected to be accretive in the near term.
These initiatives will strengthen the Group's core competencies and service offerings, and position us well to seize emerging opportunities for long-term growth.