SIA Engineering Cites Changi Traffic, Business Expansion In H1 Profits

In its Nov. 2 business update, Singapore-based SIA Engineering said “robust traffic recovery at Changi Airport” helped the number of flights handled by its Line Maintenance unit in Singapore to reach 87% of pre-pandemic levels in the September quarter, compared to 55% a year ago.

At Base Maintenance, demand for hangar checks remained strong, the company said, noting that it incorporated a wholly owned subsidiary in Malaysia, Base Maintenance Malaysia, in preparation for the expansion of its base maintenance network to include hangars in that country.

“We have also made progress in our efforts to expand our MRO capabilities,” SIA Engineering said, noting that its subsidiary, Asia Pacific Aircraft Component Services, was awarded additional licenses by Honeywell to perform repair activities on the latter’s Air Data Inertial Reference Unit products on Airbus aircraft and Pre-Cooler Control Valve products on Boeing 737 aircraft. Further, the Singaporean company has signed an agreement with Eaton to form a component MRO joint venture.

SIA Engineering posted a profit of S$59.3 million ($49.4 million) in the first half (H1) of its fiscal 2023-24, up 82.6% from S$32.5 million during the same period a year earlier, the company said. 

Revenue rose 41.9% to roughly S$514 million in the six months ended Sept. 30, boosted by the steady post-pandemic recovery of the travel sector. 

Earnings per share reached 5.28 Singapore cents, up sharply from 2.89 Singapore cents the previous year.

In its fiscal second quarter, SIA Engineering posted an operating loss of S$0.3 million, an improvement of S$6.5 million year-on-year as revenue growth of 32.2% exceeded a 27.8% expenditure increase. Expenditure rose primarily due to higher manpower costs, material costs, equipment running costs, and debt impairment provision for a customer that has suspended operations.  

SIA Engineering’s S$32.3 million profit in the September quarter, meanwhile, was an improvement of S$12.6 million over the same period a year earlier.
Investors reacted positively to the news, with shares of the Singapore Exchange (SGX)-listed company rising 3.49% to close at S$2.37 on Nov. 3.

Looking ahead, SIA Engineering noted that a strong recovery in flight activities has fueled rising demand for MRO work, but the industry still faces multiple headwinds, from macroeconomic and geopolitical uncertainties and inflationary pressures to supply chain disruptions and a tight labor market. 

“These could weigh on business demand and operating margin recovery in the near-term,” the company said.