Post Reply
141-160 of 649
SIA Engineering Company Signs
Component Agreement with Thai VietJet-
SINGAPORE, 04 November 2021 - Mainboard-listed SIA Engineering Company Limited
(?SIAEC?) is pleased to announce the signing of an Inventory Technical Management
Programme with Thai VietJet, Thailand?s leading low-cost carrier based at Bangkok?s
Suvarnabhumi Airport.
The agreement provides component support coverage to Thai VietJet?s fleet of Airbus A320
aircraft over a term of six years. Under the programme, SIAEC will provide comprehensive
pooling as well as repair and overhaul of airframe and engine components. As part of the suite
of offerings, SIAEC will also provide on-site stock in Bangkok to support the narrow-body
operator within the Asia-Pacific region....
https://links.sgx.com/1.0.0/corporate-announcements/IBZT0AH40CM83VIC/689558_SGXNET%20-%202021%2011%2004%20TVJ%20Press%20Release.pdf
SATS, SIA EC, Air China among OCBC' s top aviation sector picks
OCBC Investment Research (OIR) analyst Chu Peng sees the easing of travel restrictions by the US as a " positive step forward" .The move, she says, will help the recovery of the aviation and tourism sectors, barring the risks of a potential spike in the number of Delta variant cases.
Many regions in Asia Pacific, which have announced plans to move from " zero-Covid" to " living with Covid-19" is seen as another plus for the sector.
That said, it is unlikely for a large scale and significant improvement in cross-border and, or international travel to happen in 2021 and 1H2022, she says.
In her report on Sept 22, Chu also notes that the resurgence in Covid-19 cases around the world due to the Delta variant, has weighed on the performance of airline stocks.
To be sure, the Bloomberg World Airlines index fell 9.75% and 5.2% in the months of June and July respectively.
Among the airline names under OCBC' s coverage, Chu is positive on selective names within the sector.
These include Delta Airlines and Southwest Airlines among the US airline names, as well as Air China, SATS and SIA Engineering Company (SIA EC) within Asia.
" Delta Air Lines is a name to play the next phase of recovery in international and corporate travel. Europe made up 52% of Delta' s international available seat miles in 2019, compared to 43% for peers. With the US' announcement to reopen borders to 33 countries, including the UK and Europe from November this year, Delta is poised to benefit from a recovery in international travel," writes Chu.
" On the other hand, Southwest is more of a domestic leisure play which is almost entirely focused on the domestic market," she adds.
Chu has given Delta and Southwest both " buy" calls with target prices of US$52.50 ($71.04) and US$65.
" Driven by a stronger travel demand, Air China' s net loss narrowed to RMB0.6 billion ($125.67 billion) in 2Q21, the lowest since the onset of the Covid-19 pandemic. In addition, revenue passenger kilometres (RPK) improved 109% y-o-y and passenger load factor was 75% which were the strongest since 2020," she writes.
" Given prior track record of the Chinese government in handing sporadic cases, we think there is a good chance that the latest outbreak of the Covid-19 pandemic in Fujian could be controlled effectively before the October Golden Week."
Within China, Chu believes that the demand for domestic travel should remain strong and continue to lead the recovery in 2021 and 2022. However, there is no sign that the government is planning to open its borders despite 76% of the population in Singapore having received at least one dose.
" We expect Air China' s domestic seat capacity to fully recover to 2019 level this year and further increase to [around] 120% of 2019 level in 2022. However, we forecast Air China' s international seat capacity to be only 5% of 2019 level for 2021 and rebound to about 35% in 2022," she writes.
In Singapore, the reopening of borders via the vaccinated travel lanes marks a measured start to the resumption of air travel, aiding the recovery of the aviation sector.
That said, she believes visitor arrivals may remain muted in 2021 as vaccination rates and border measures vary in countries.
" A more meaningful recovery is likely to happen in 2H2022 and 2023," she says.
Chu views SATS as a beneficiary of strong cargo demand and the gradual recovery of air travel with buffer from its non-travel business.
" For SATS' s 1QFY2022, cargo remained the bright spot which grew 13.5% q-o-q due to strong demand from e-Commerce, and temperature sensitive supplies such as vaccines and perishables. On a q-o-q basis, SATS' s flights handled improved 3.7% (at 25% of pre-Covid-19 levels) while passengers handled fell 10%," she writes.
" As air travel takes time to recover, SATS' s non-travel business could continue to be a key revenue driver which made up 46% of SATS' s total revenue in 1QFY2022. Looking ahead, SATS will continue to grow its non-travel business across Asia and look for acquisition opportunities e.g. cargo handling assets and central kitchens," she adds.
SIA EC is also another beneficiary once the borders reopen, says Chu, who deems the stock' s valuations undemanding.
The counter is currently trading at a forward price-to-book (P/B) ratio of 1.45 times, which is around 1 standard deviation (s.d.) below its historical average of 2.0 times.
Chu has given " buy" calls for Air China, SATS and SIA EC with target prices of HK$6.50 ($1.13), $4.80 and $2.37 respectively.
Looking ahead, Chu sees digitalisation as a new way of travel, as the Covid-19 pandemic accelerated technology improvements and digital transformation.
As business environments now use mobile self-serviced capabilities, contactless technology, digital health passports and vaccination visas, Chu believes that the trend would continue.
" Companies which can innovate and adapt quickly to the regulatory requirements and passenger needs will emerge stronger post-Covid-19," she says.
The trio power stocks - SATS, SIAE and SIA share prices are holding so well despite the pandemic lasted for 2 years especially the first two.
This clearly shows that major shareholders are confidence on the companies, shortists also afraid to short as they are against Ah Gong with trillions warchest.
This clearly shows that major shareholders are confidence on the companies, shortists also afraid to short as they are against Ah Gong with trillions warchest.
SIA Engineering signs new maintenance agreement with Hawaiian Airlines
SIA Engineering Company (SIAEC) on Friday said it signed an agreement with Hawaiian Airlines to expand airframe maintenance services for the latter' s Airbus A330-200 fleet.This is in addition to the group' s existing airframe services agreements with Hawaiian Airlines for its A330 aircraft, which cover heavy checks and paintings.
Under the new agreement, the group will perform 12-year checks commencing in March 2022 on Hawaiian Airlines' fleet. Maintenance services will be undertaken by SIAEC at its facility in Singapore.
SIAEC does not expect the transaction to have a material impact on its per-share earnings nor net tangible assets for the current financial year.
In its press statement filed to the Singapore Exchange, the group underscored its customer' s status as Hawaii' s biggest and longest-serving airline.
Hawaiian Airlines is estimated to offer 130 flights within the Hawaiian Islands, and services between Hawaii and 16 US gateway cities as well as Tahiti, American Samoa, Japan and South Korea.
SIAEC chief executive Ng Chin Hwee said he sees the extension of additional maintenance services to Hawaiian Airlines as a testament to the successful relationship between both companies. It also demonstrates the airline' s vote of confidence for the SIAEC' s airframe maintenance services, in his view.
" With our strong technical expertise and vast maintenance experience, we are well positioned to provide quality services and engineering support for the airline' s A330 fleet," said Mr Ng.
Shares in SIAEC closed 1 cent lower or 0.47% down at $2.13 on Sept 24.
SIA Engineering Company launches academy to upskill workforce and add value to customers
SIA Engineering Company (SIAEC) has launched the Lean Academy on Sept 7.The newly-launched academy is an extension of SIAEC' s training academy, and is a key thrust of the aviation company' s transformation journey to create greater value for its customers, workforce and the aviation community.
The Lean Academy is part of SIAEC' s Transformation Phase 2, which was launched in January 2021.
According to SIAEC, it will invest $10 million to accelerate and sustain a Lean transformation enterprise-wide, of the $40 million in planned investments for the second phase.
The company is also aiming to have 100% of its workforce trained in the Lean Academy by early 2023, done with $2.4 million in wage support from the Economic Development Board (EDB).
In the longer term, training at the Lean Academy will be extended to the wider aerospace maintenance, repair and overhaul (MRO) community. The Lean curriculum will also strengthen the SIAEC Training Academy' s extensive suite of aerospace-related training programmes.
" The ongoing wave of transformation across the aviation sector is a reminder of the rapidly changing MRO landscape and the need to constantly improve ourselves to enhance our competitiveness," says Ng Chin Hwee, SIAEC' s CEO.
" The progress in our Lean journey has been very encouraging thus far, and we are confident that the Lean Academy will serve as a launchpad for us to scale up our efforts in this space. It also marks the latest milestone in our ongoing transformation journey that had begun in 2017, and a testament to our unwavering commitment to retain our position as one of the world' s leading MRO providers," he adds.
Shares in SIAEC closed 2 cents lower or 0.94% down at $2.11 on Sept 7.
erm..
So he can create more business?
I doubt so right... he will contribute to the safety, risk more?
Need the guy who can think out of the box?
So he can create more business?
I doubt so right... he will contribute to the safety, risk more?
Need the guy who can think out of the box?
kiseki_2818 ( Date: 29-Jul-2021 09:32) Posted:
|
tuas power siao liao.
PhillipTan ( Date: 29-Jul-2021 08:30) Posted:
|
SIA Engineering appoints former Tuas Power chief as independent director
SIA Engineering has appointed Lim Kong Puay, the former chief executive of Tuas Power, as independent non-executive director and a member of the board safety and risk committee.The appointment commences on Aug 1. Mr Lim, 65, has more than 35 years of experience in Singapore' s electricity industry that covers operations, maintenance and management of large-scale steam turbine generators and combined cycle plants.
" Mr Lim' s experience...will enhance the core competencies of the current board and the company' s culture of safety, risk and operational excellence," the board said on Wednesday evening.
Shares of SIA Engineering closed flat at S$2.10 on Wednesday.
Analysts split on SIA Engineering as reopening lags, potential M& A ' exciting'
Analysts are split after SIA Engineering posted 35.5% y-o-y net profit growth in its 1QFY2022 business update, though this was buoyed by government grants like the Jobs Support Scheme.To OCBC Investment Research analyst Chu Peng, the figures signal " a better quarter" for the aircraft maintenance company, as it offers an " undemanding" valuation amid a beleaguered air travel sector.
In a July 27 note, Chu is recommending " buy" on the company with an unchanged target price of $2.37.
For 1QFY2022 ended June 2021, revenue rose 5.7% y-o-y to $125.3 million, driven by a recovery in flight activities. PATMI grew 35.5% y-o-y to $14.5 million, thanks to Job Support Scheme (JSS). Stripping off the impact of JSS, SIA Engineering would have recorded a net loss of $24.1 million.
JSS support is expected to taper off in 2H2021, writes Chu, which could weigh on the earnings recovery trajectory.
Despite the resurgence of Covid-19 cases globally, Singapore is on track to fully vaccinate 80% of its population by September and aims for quarantine-free travel in September. " The government also plans for a gradual and selective opening of borders by end of 2021, which in turn will support the recovery of SIA Engineering," says Chu.
We saw sequential improvement in 1QFY2022 with flights handled at Changi by line maintenance and number of flights checked at Singapore base growing 13% and 31% q-o-q respectively. Majority of the checks performed at Singapore base were from light checks, up 39% q-o-q, as compared to heavy checks, up 5% qq-o-q.
" In terms of recovery, we believe line maintenance should benefit first with increase in operating flights. Fleet management driven by flying hours, will come next. Base maintenance which requires the aircraft to be taken out of service for longer periods could take a longer time to see demand come back," says Chu.
Meanwhile, DBS Group Research analysts Suvro Sarkar and Jason Sum are more measured in their forecast, maintaining " hold" on the company with a raised target price of $2.05 from $1.80 previous, which represents a 1% downside.
Sarkar and Sum believe core earnings recovery will be a long-drawn affair. " Recovery in flight traffic remains slow and still 73% below pre-Covid-19 levels at Singapore Changi Airport, which is the main base for SIA Engineering' s line maintenance operations. The absence of a domestic aviation market in Singapore and delays in opening up of international borders will continue to constrain earnings recovery over the next few quarters, as will the tapering of Singapore government grants (wage subsidies)."
A potential M& A target on the table provides some excitement, write Sarkar and Sum. In March, SIA Engineering signed a memorandum of understanding to explore acquisition of SR Technics Malaysia, which, if completed, will ensure SIA Engineering has a foothold in the higher growth narrowbody aircraft component MRO space, as compared to its current widebody fleet expertise.
Privatisation is the other key upside catalyst, and Sarkar and Sum say their target price factors in a 20% privatisation premium. Excluding the premium, fundamental target price would be $1.70. " Faster than expected vaccine rollouts and speedy restoration of international flights will also help the stock to re-rate."
As at 12.12pm, shares in SIA Engineering are trading 2 cents lower, or 0.95% down, at $2.08.
UOBKH positive on aviation sector on better-than-expected SIA Engineering results
Observing SIA Engineering Company&rsquo s (SIAEC) better-than-expected net profit of S$14.5 million, UOB Kay Hian(UOBKH) analyst K Ajith has upgraded the company to " hold" with a target price of S$2.25, up from S$2.He noted that SIAEC' s net profit was due to a steep rise in joint venture and associate earnings, which matched pre-pandemic levels.
While SIAEC did not provide any reason for the quarter-on-quarter improvement in net profit from S$100,000 in the preceding quarter, the analyst believes that it could be related to a pickup in service checks on Singapore Airlines (SIA) and third-party airlines or the absence of an impairment charge.
Despite the improvement in Q1 FY2022, the extent and sustainability of the improvement in joint venture and associate earnings are still uncertain. Furthermore, he noted that the engine joint ventures and associates that have benefited from Job Support Scheme payouts will expect to see them decline over the next three quarters.
Still, Mr Ajith noted that SIAEC could benefit from higher line maintenance revenue if SIA adds capacity and has raised SIAEC' s net profit forecast from S$7 million to S$50.9 million.
Additionally, he said that SIAEC' s engine maintenance-related joint venture and associate earnings are likely to signal a similar improvement in ST Engineering&rsquo s aerospace business as well and maintained a " buy" call on the company with a target price of S$4.26.
He noted that the engineering conglomerate' s partner in the US, Honeywell, also reported better-than-expected Q2 FY2021 results, with aerospace revenue rising 9 per cent year on year on the back of double-digit sequential improvements in its maintenance, repair and overhaul segment.
Regarding Singapore' s aims to start quarantine-free travel in September, the UOBKH analyst noted that while there is uncertainty as to whether such travel refers to returning travellers out of Singapore or inbound travellers, the recovery in air travel will likely be gradual given the slower rates of vaccinations outside of Singapore.
Finance Minister Lawrence Wong said on Monday that as 80 per cent of Singapore' s population is likely to have been vaccinated against Covid-19 by early September, Singapore could begin reopening borders and establishing travel corridors with other countries and regions.
With these factors in mind, he has maintained market weight on the aviation sector.
Shares of SIAEC traded up 1.9 per cent or S$0.04 at S$2.12, while shares of ST Engineering increased 0.5 per cent or S$0.02 at S$3.98 as at 10.53am on Tuesday.
With strong cash balance, ' add' SIA Engineering for eventual recovery
SIA Engineering' s associates are leading the recovery, says CGS-CIMB Research analyst Lim Siew Khee, reporting a positive surprise in 1QFY2022 with $14.5 million in net profit.In a July 23 note, Lim is maintaining " add" on the company, with an unchanged target price of $2.85, which represents an upside of 36.9%.
SIA Engineering' s (SIE) 1QFY3/2022 revenue of $125.3 million, up 9% q-o-q and up 6% y-o-y, was driven by higher flight activities, with group operating expenses at $128 million, down 7% q-o-q but up 13% y-o-y and an operating loss of $2.9 million, compared to an operating loss of $1.1 million in 4QFY2021.
Meanwhile, the share of profits of associates and JVs was $14.8 million, forming 39% of Lim' s FY2022F forecast. Key contribution was from the engine and component segment ($18.3 million), while the airframe and line maintenance segment turned in a lower loss of $3.5 million.
Without the Job Support Scheme (JSS), SIA Engineering would have incurred a 1QFY2022 net loss of $24.1 million. " We believe 1QFY2022 net profit of $14.5 million could have also been lifted by a tax credit of an undisclosed amount," adds Lim.
The company ended 1QFY2022 with a cash balance of $683.5 million, compared to $616 million in the previous quarter. Net cash as at 4QFY2021 was $606 million.
At 1.5 times FY2022F price-to-book value (P/BV), SIA Engineering trades close to -1.5 standard deviations below its historical mean. " We believe downside risk is limited on the back of global vaccination rollout. We think that by December 2021 or early-2022, quarantine-free visits/vaccination certificates could be rolled out for selected countries that Singapore has established Air Travel Pass (ATP) arrangements with. While the passenger load could still be low in the initial stages, we think airlines restarting flights are likely to see their flights handled numbers jump," writes Lim.
As at 2.45pm, shares in SIA Engineering are trading 1 cent lower, or 0.48% down, at $2.07.
SIA Engineering records 35.5% increase in net profit for Q1
SIA Engineering Company (SIAEC) reported an increase in net profit for its first quarter ended June on the back of higher revenue, as the number of flights handled continued to increase.In a business update on Friday, it said that net profit for the three months rose 35.5 per cent to S$14.5 million, up from S$10.7 million in the prior-year period.
This came as the group' s revenue rose to S$125.3 million during the quarter, up from S$118.5 million a year earlier.
However, SIAEC noted that the performance for the quarter continued to be supported by grants from government support schemes, most significantly, the Jobs Support Scheme (JSS).
It said: " Although support from JSS was lower than the same period last year, it substantially cushioned the impact of low flight activities. Without this support, the group would have recorded a loss of S$24.1 million."
SIAEC said the number of flights handled continues going up, but the pace of recovery slowed during the quarter, as rising number of cases of the more infectious variant of Covid-19 resulted in tightening of border restrictions.
It noted that the number of flights handled at its Singapore base during the quarter was up 97 per cent year on year, from last year' s low base.
" However, as compared to last quarter, the increase was only 13 per cent, with the increase largely coming from the base carriers at Changi Airport," it added. " Flight activities at our overseas line-maintenance companies experienced similar slow recovery over the last quarter."
Cost-management measures partially offset lower grants from government support schemes, but the group' s expenditure still climbed slightly to S$128.2 million. The group' s operating loss of S$2.9 million was around a third of the S$8.6 million loss incurred in the year-ago quarter.
In terms of outlook, SIAEC noted that amid global vaccination efforts, countries with high vaccination levels are looking into easing travel restrictions. However, it added: " The trajectory for a sustained recovery remains uncertain and rests on the global vaccination and infection rates, as well as border restrictions."
SIAEC does not expect any meaningful increase in flight frequencies to materialise in the short term, and the company said it is " pressing ahead with its transformation efforts to emerge stronger in the post Covid-19 future" .
SIAEC shares closed unchanged at S$2.08 on Friday, before the announcement.
SIAEC aims to rev up bottom line contribution from engine services
SIA Engineering' s new division hopes to win business from regional markets.
ENGINE services currently make only a modest contribution to the operating performance of SIA Engineering Company (SIAEC). But the mainboard-listed maintenance, repair and overhaul (MRO) services to the aviation sector is eyeing expansion in this space in the post-pandemic recovery.
It also hopes to win business from the regional markets, and is keeping some powder dry for potential acquisitions.
In March, SIA Engineering had created a new division to consolidate, develop and grow its engine services business. This division seeks to provide services such as engine maintenance, parts repair, storage and preservation, material management, on-wing services and engine testing.
Ng Chin Hwee, chief executive officer of SIA Engineering, told The Business Times that although engine services are currently still a small part of the company' s topline, SIA Engineering is not new to this area of business.
The company has three joint ventures dealing in engine MROs: Singapore Aero Engine Services, a 50-50 JV with Rolls-Royce Eagle Services Asia, a partnership with Pratt & Whitney in which SIA Engineering holds a 49 per cent stake and a JV with GE Aviation in which SIA Engineering has a 49 per cent stake.
Mr Ng wants SIA Engineering to improve and strengthen the whole value chain of all of its JV partners: " We want to see how we can develop new capabilities, and to support them and to strengthen them in these JVs of ours."
The newly formed engine services unit is now renovating a shop and will be ready to welcome engines for quick turn maintenance work by the end of the year. Quick turn maintenance minimises the time during which the engine is dropped from the jet and stays at the shop for off-wing services, thereby optimising engine availability.
" It is not that we haven' t done this work before. We are already doing some of this work right now in our hangars, but they are all very low volume and ad hoc work. This would therefore provide a steady flow of engine work," said Mr Ng.
When global air travel recovers, greater demand is expected for quick turn maintenance and shorter engine turnaround, as airlines would want to fly as much as possible.
Mr Ng said SIA Engineering is also looking at expanding the engine services division through mergers and acquisitions or joint ventures that could broaden its capabilities and position it to emerge stronger when the storm passes.
Awaiting a recovery
Meanwhile, SIA Engineering has bought out its partners in several JVs to enhance its capabilities and cost competitiveness. Its Philippines facility, for example, is expected to help the group be cost competitive and capture a slice of a market that is likely to be dominated by narrowbody planes when the post-pandemic recovery begins in earnest.
Although SIA Engineering' s Singapore hangars are equipped to service narrowbody jets, the one in Clark in the Philippines has a much more competitive labour cost base for narrowbody aircraft.
" We would tend to try to secure contracts for the narrowbody at Clark base and for the larger, the widebody, obviously we would leverage our strength in Singapore and our technical knowledge," said Mr Ng.
The Clark facility is about four flight hours to major North Asian markets, including China, Korea, Japan and Hong Kong.
This proximity should be adequate to pitch for business in those markets, said Mr Ng, as it isn' t necessary that the company has to be physically present in a market to be able to secure business.
He gave the example of Hawaiian Airlines - an SIA Engineering client that flies its aircraft to Singapore for heavy maintenance.
Being able to get work from regional airlines is particularly important in the present climate of limited international travel. The domestic market in China, for one, has already rebounded to pre-pandemic levels.
Mr Ng said SIA Engineering intends to maintain its focus on the aviation industry despite the current headwinds, and will use its resources to prepare for a recovery rather than to diversify into a less badly affected industry.
" I can no longer cook like I did when I was in SATS," he said, referencing a prior stint helming the mainboard-listed ground-handler and inflight caterer.
SATS has diversified into offering its security services and food products to clients outside the aviation industry in a bid to expand revenue streams.
To ready itself, SIA Engineering has been building up capabilities in services such as the disinfecting of aircraft, 3D manufacturing for cabin parts, and retrofitting cabin parts for private jets.
It has received some interest from airlines about retrofitting their underutilised passenger jets for freight transportation, to boost freight capacity beyond the bellyhold.
The company has performed this for three of the planes owned by Singapore Airlines (SIA), with works done including strengthening the floorboard and stripping the seats on these planes.
But Mr Ng also noted that such a temporary conversion is different from a full passenger-to-freighter conversion, which caters to different markets and requires different capabilities.
SIA Engineering has a healthy balance sheet, with S$616 million in cash and deposits against bank loans of S$9.9 million as at March 31.
It has always maintained adequate liquidity to seek out opportunities, Mr Ng said, adding that the prudence has been " a great help to us during this time" , offering a cushion to absorb shocks from the crisis.
The company continues to watch the development of the pandemic and its expenses very closely, and will borrow if necessary - either to strengthen its balance sheet or to support acquisitions.
Parental support
The balance sheet of SIA Engineering' s parent company SIA is not quite as robust. Might SIA be interested in finding a buyer for the more than 77 per cent of SIA Engineering it owns? Or spinning the engineering company off in a listing to raise funds?
Mr Ng said such a decision would be one for SIA to make alone. But he continues to see benefits in the close ties with SIA.
The airline group buys modern aircraft, which has enabled SIA Engineering to upgrade its skills and capabilities to handle and maintain modern jets. SIA also has opened up opportunities for SIA Engineering to partner with established engine makers and acquire technical know-how.
" The ownership&hellip has been a good one for us because it enables us to capture the opportunities that independent MROs are not able to get hold of. And it' s incumbent upon us to leverage this and to grow our pie. Not forgetting the fact that the SIA brand carries with it, quality, consistency and value."
Trending up ... enjoy
SIA Engineering seeking out investment opportunities abroad, likely to acquire control of JVs
SIA Engineering has made a shift in its investment strategy, going beyond Singapore to seek out opportunities as well as being more likely to acquire control of joint ventures (JVs).
Ng Chin Hwee, chief executive of the mainboard-listed aviation maintenance, repair and operations service provider, talked about these changes during an analyst call on Wednesday following the release of its results the day before for financial year 2021.
He cited the example of SRT Technics Malaysia, for which SIA Engineering is conducting due diligence for potential acquisition. It will be majority-owned, and therefore the control and management will be in the hands of SIA Engineering, if the transaction goes through.
SRT provides component repair, testing and overhaul services with a focus on the Airbus A320, A330, A340 and the Boeing 737NG aircraft, serving a diversified global customer base. It has sizeable capabilities for the narrowbody, the present preferred aircraft type in operation given the low demand for travel now.
SIA Engineering swung into a loss of S$11.2 million for the financial year to March, from a net profit of S$193.8 million previously, as demand was hit when its customers were impacted by the pandemic. Revenue shrank by 55.4 per cent to S$443 million.
Noting that this downturn has brought about structural changes in the industry, such as cuts in expenditure arising from early retirement of older aircraft, Mr Ng said SIA Engineering is seeking opportunities to strengthen and reshape its portfolio to tackle the challenges.
SIA Engineering intends to expand the engine services business as it reshapes its portfolio, as Mr Ng said its partnership with other players will only do well if it is also actively engaged in the engine services space that will help bring better value propositions to its engine and airline customers.
He also pointed out that the firm is one of few that have JVs with leading jet engine makers Rolls-Royce, Pratt & Whitney and GE Aviation.
It also has acquired the remaining stakes in some JVs in the past financial year as it rationalises its portfolio. It made Heavy Maintenance Singapore Services a wholly-owned subsidiary, for example, by buying out the 35 per cent interest from Airbus Services Asia Pacific.
Acquisitions and staff upskilling will be made to position the engineering group for post-pandemic recovery, even as it exercises a strict cost discipline and has also declared no dividends for the financial year 2021.
" It doesn' t mean that we behave like an ostrich sticking his head into the sand. We intend to continue to upskill our staff, reskilling them, so they can be ready for the recovery, " explained Mr Ng.
SIA Engineering Co H2 net profit sinks 92.7% to S$7.8m
SIA ENGINEERING Co (SIAEC) managed to stay in the black in the second half of its financial year, with generous help from government wage subsidies even as the company pared staff, sub-contract and material costs.
Still, SIAEC could not stave off a full-year loss, said the maintenance, repair, and operations (MRO) service provider in a bourse filing on Tuesday.
Net profit was S$7.8 million for the six months to March 31, down by 92.7 per cent from S$106.2 million in the year before. Revenue fell by 54.3 per cent, to S$220.0 million.
Earnings per share stood at 0.69 Singapore cent, compared with 9.48 cents before its net asset value slipped to 136.8 cents a share, from 145.4 cents previously.
SIAEC said in its financial statements: " The start of the financial year saw the most severe impact of the Covid-19 pandemic on flight activities with a record low number of flights handled in April and May 2020. Since then, the number of flights handled has been recovering, albeit at a slow pace.
" All business segments were gravely affected throughout the financial year."
For the 12 months, SIAEC swung into a net loss of S$11.2 million, from net profit of S$193.8 million previously. Revenue shrank by 55.4 per cent, to S$443.0 million.
Without public support such as the Jobs Support Scheme, SIAEC would have posted a loss of S$192.4 million, the group said, while noting that it made significant provisions for the impairment of assets in the year, such as S$35.0 million for its base maintenance unit' s assets and S$11.4 million on its investment in an engine programme.
SIAEC' s full-year loss per share was 1.00 cents, compared with earnings per share of 17.30 cents in the previous financial year.
The group is now holding out for a meaningful demand for MRO services, as global vaccine roll-outs support a revival of air travel, but warned that fresh outbreaks and the emergence of new virus variants mean that the aerospace recovery " is still fraught with risks" .
SIAEC disclosed that it would both continue reviewing and rationalising its portfolio, as well as pursue new opportunities for expansion.
Given the financial damage from Covid-19, the board said that it would not recommend a dividend for the full year, after paying out S$0.08 a share the year before.
The directors took into account SIAEC' s losses, as well as " the need to retain financial flexibility to pursue business opportunities" , it said.
Why today gap down ? Any news ?
w3 ext ew on w5 see fib
px hit high 255
w5 ext ew on w4 tgt 241
px hit low 242
px hit high 255
w5 ext ew on w4 tgt 241
px hit low 242
ew now on w3
conversion 234 cannot breakdown
conversion 234 cannot breakdown
day chart upper trendline
