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Hong Kong Aircraft Engg 2006 net profit up 37 pct on strong maintenance ops


Hong Kong (XFN-ASIA) - Hong Kong Aircraft Engineering Co Ltd

(HAECO) reported 37 pct rise in 2006 net profit to 847 mln hkd following strong

growth of its heavy maintenance and engine overhaul operations in Hong Kong

and Xiamen.

"Strong demand for the group's hangar maintenance services and for the engine overhaul services of its jointly controlled companies resulted in profit attributable to shareholders increasing by 37 pct," the company said.

It said growth of its heavy maintenance operations, through its 56.55 pct stake in Taikoo (Xiamen) Aircraft Engineering Co Ltd (TAECO) and 35.65 pct holding in Taikoo (Shandong) Aircraft Engineering Ltd, also helped boost results.

"The opening of a fourth hangar at the end of 2005 and very strong demand allowed TAECO to expand its heavy maintenance work substantially," it said.

TAECO is scheduled to open a fifth double wide-body bay hangar by the middle of this year. The unit contributed 221 mln hkd to HAECO's net profit last year, up 117 pct from a year earlier.

HAECO's 45 pct owned unit, Hong Kong Aero Engine Services Ltd, also recorded hefty growth amid strong demand for engine overhaul services.

The unit contributed 282 mln hkd in net profit, up 23 pct from a year earlier.

In Hong Kong, HAECO's hangar maintenance and line works at the passenger and cargo terminals at Hong Kong International Airport contributed a net profit of 305 mln hkd in the period up 19 pct from a year earlier.

"The group's prospects are good given the recent increase in hangar capacity, strong demand for its heavy maintenance services and the growth in the fleets of Hong Kong based customers," company chairman Christopher Pratt said.

"It will however take time to increase the number of fully trained staff to a level which matches the additional capacity and results will be moderated by associated increases and the impact of the appreciation of the yuan on TAECO's margins," he added.

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