SIA Engineering Company (SIAEC) recorded a dismal bottom line for the past quarter ending in June compared to what it had achieved last year.
According to the group, its profit attributable to owners of S$36.2m was 81.8% lower than last year's S$198.4m. The large decline was due to the gain from the SIAEC's divestment of 10% stake in Hong Kong Aero Engine Services Ltd last year. Excluding the said divestment gains, profit was still lower by 4.7%.
In terms of revenue, the group managed to reflect a top line of S$272.8m, which is slightly up last year. This came as the group expenditure decreased by 6.8% to S$254.7m, mainly due to a provision made in the same quarter last year for the estimated increase in the profit-linked component of staff remuneration arising from the gain on divestment, based on profitability-related key performance indicators.
Meanwhile, the group's operating profit amounted to S$18.1m, a rebound from the loss of S$1.6m last year.
The group expects the operating environment for the maintenance, repair and overhaul (MRO) industry to remain challenging despite the group's efforts to expand and be sustainable in the long-term.
"During the quarter, we announced that we reached an in-principle agreement with GE Aviation to form an engine overhaul joint venture in Singapore. This marks our third engine overhaul facility with the world's leading engine manufacturers," the group said in a statement, noting that the venture will further strengthen the SIAEC capabilities to provide MRO services to airlines' new-generation fleets on a wide range of engine models.
The group furthered, "We have also expanded our geographical network with the incorporation of a wholly-owned subsidiary in Osaka to provide line maintenance services at this key airport in Japan. The foregoing and other recent investments are not expected to be accretive in the near-term."
Lastly, the group said it will continue with initiatives to increase productivity, enhance operational efficiencies and manage our costs to remain competitive.