SIA ENGINEERING GROUP POSTS PROFIT OF $95.6M FOR 1st HALF FY2014-15

GROUP EARNINGS
First Half FY2014-15
SIAEC Group recorded a profit attributable to owners of the parent of $95.6 million for the half year ended 30 September 2014.

Revenue decreased by $4.0 million or 0.7%. Fleet management revenue increased while line maintenance revenue remained steady. However, the lower number and work content of aircraft checks resulted in lower airframe and component overhaul revenue for the half year. Expenditure increased by $15.6 million or 3.0%. The high subcontract content of some contracts, including fleet management contracts which typically require part of the obligations to be outsourced, contributed to the increase in expenditure. Operating profit for the period of $36.6 million was $19.6 million or 34.9% lower compared to $56.2 million in the previous year.

Share of profits from associated and joint venture companies at $59.7 million was $28.9 million lower than the same period last year. The decrease came mainly from the two engine repair and overhaul centers whose earnings fell $25.0 million or 39.0%. Engine improvement modifications as well as an extension of the “on-wing” life of certain models and the accelerated retirement of the older engines resulted in a reduction of engine shop visits.

Basic earnings per share was 8.54 cents, a decrease of 32.2% from the corresponding period last year.

Second Quarter FY2014-15
Profit attributable to owners of the parent was $42.1 million, a decrease of $28.9 million or 40.7% compared to the same quarter last year.

Revenue decreased by $8.7 million or 3.0% to $285.2 million, with lower airframe and component overhaul revenue offset in part by higher fleet management revenue. The increase of $3.9 million or 1.5% in expenditure to $269.3 million this year was primarily attributable to higher subcontract costs. The operating profit for the quarter was $15.9 million, $12.6 million or 44.2 % lower than a year ago.

Share of profits from associated and joint venture companies was $29.1 million, a decrease of $16.5 million or 36.2% from the previous year. Contributions from the engine repair and overhaul centers at $20.0 million was $13.4 million or 40.1% lower than the same period last year.

Basic earnings per share was 3.75 cents for the current quarter.

GROUP FINANCIAL POSITION
As at 30 September 2014, equity attributable to owners of the parent amounted to $1,272.0 million, $88.9 million or 6.5% lower than that as at 31 March 2014. The decrease was mainly due to payment of the final dividend in respect of FY2013-14 partially offset by profits earned for the period.

Total assets amounted to $1,591.0 million, a decrease of $116.1 million or 6.8% from 31 March 2014. The Group’s cash balance was $391.2 million as at 30 September 2014.

Net asset value per share as at 30 September 2014 was 113.5 cents.

DIVIDEND
The Company has declared an interim dividend of 6 cents per share.

OUTLOOK
The Group’s performance continues to be affected by the decline in engine shop visits and heavy checks. Pressure on margins has not abated with rising business costs and intense competition. We are stepping up efforts to improve productivity to stay competitive in this overall challenging environment.

The Group stays the course in its pursuit of value-added collaborations with strategic partners. This will position us well to take advantage of long term growth opportunities in the region.