Singapore (SIA ENGINEERING) - The Group posted a 20.2% rise in first quarter profit attributable to equity holders of the Company as a result of continuing contributions from associated and joint venture companies. Dividend income was also received from an investee company during the quarter.
Airframe and Component Overhaul, Line Maintenance and Fleet Management Programme contributed 62%, 31% & 7% respectively to the Group’s revenue.
Expenditure incurred in preparation for the first Passenger-to-Freighter (PTF) conversion in August 2006, higher material cost and an exchange loss of $0.8 million were the main causes of the 13.1% rise in expenditure. There was an exchange gain of $1.6 million in the corresponding quarter last year. The resulting first quarter 2006-07 operating profit was $33.1 million.
Note: The SIAEC Group’s unaudited financial results for the first quarter ended 30 June 2006 were announced on 1 August 2006. A summary of the financial statistics is shown in Annex A. (All monetary figures are in Singapore Dollars.)
Associate and joint venture companies continued their strong contribution to Group earnings. Share of profits increased by $4.9 million (+17.9%) to $32.3 million, forming 43.4% of the Group’s pre-tax profits. As at 30 June 2006, the Group had equity interests in 19 joint ventures with original equipment manufacturers and airlines in Singapore, Ireland, Hong Kong, Taiwan, Indonesia and the Philippines, covering a comprehensive range of hightechnology aero-services. Boosted by the share of profits and dividend income of $4.7 million from an investee company, profit before taxation increased by $12.5 million (+20.2%) to $74.5 million. Profit attributable to equity holders of the Company increased at the same rate to $66.4 million, $11.2 million higher than in the same period last year. Correspondingly, basic earnings per share increased by 17.8% to 6.38 cents.
GROUP FINANCIAL POSITION (as at 30 June 2006)
Equity attributable to equity holders of the Company increased to $1,117.4 million as at 30 June 2006, $78.6 million higher than at 31 March 2006. As at 30 June 2006, total number of shares issued was 1,042.4 million.
Total assets stood at $1,428.7 million, up $101.1 million or 7.6%. Net asset value per share was 107.2 cents, an increase of 7.0 cents (+7.0%).
On 26 July 2006, the Company signed a Memorandum of Understanding with the Wadia Group of India to form a Joint Venture Company (JVC) to offer maintenance, repair and overhaul services in India. SIA Engineering Company, which will have a 51% shareholding in the JVC, shall manage the green field facility, while the Wadia Group will hold the remaining 49% stake.
The commencement of the Passenger-to-Freighter conversion programme in August 2006 will add to our service offerings and better position the Company and its joint ventures to benefit from a steady demand for MRO services.
Rates will continue to come under pressure as airlines continue to focus on managing costs in a competitive business environment. We are intensifying our efforts to enhance competitiveness through productivity improvements and new service offerings. At the same time, the Company will seek growth opportunities in strategic markets and increase its portfolio of third party customers.
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