03-Feb-2006 10:45 AM
SIA Engineering - Group Profit up 46% to $53.2M for 3rd Quarter 2005-06
Analysis
SIA (Singapore) - Third Quarter FY2005-06 - The Group posted a net profit of $53.2 million in the third quarter of FY 2005-06. Joint venture and associated companies operating in Singapore and 5 other countries continued to perform well, contributing a substantial 47.2% to the quarter's pre-tax profits. The Company also benefited from the operation of two new hangars commissioned in 2005. Q3 FY 2005-06 operating profit of $22.6 million and net profit of $53.2 million were 101.8% and 46.2% respectively better than in Q3 FY 2004-05.
Revenue grew by 20.5% or $40.0 million to $235.3 million during the quarter due mainly to higher airframe and component overhaul workload, more flights handled by line maintenance and growth in fleet technical management work. Airframe and component overhaul, line maintenance and fleet management work contributed 61%, 33% and 6% respectively to the Group's revenue.
Expenditure increased at a lower rate of 15.5% to $212.7 million. In line with the higher workload, subcontract, material and overtime costs were higher as compared to Q3 last year.
Note: The SIAEC Group's unaudited financial results for the third quarter ended 31 December 2005 were announced on
2 February 2006. A summary of the financial statistics is shown in Annex A. (All monetary figures are in Singapore
Dollars.)
Share of profits from joint venture and associated companies surged 60.7% (+$10.8 million) to $28.6 million. As at 31 December 2005, there were 19 joint ventures with original equipment manufacturers and airlines in Singapore, Ireland, Hong Kong, Taiwan, Indonesia and Philippines, covering a comprehensive range of high-technology aero-services.
Profit before taxation amounted to $60.6 million, an increase of 46.4% over the same period last year. Provision for taxation was higher mainly due to changes in the Company's tax incentive schemes. The Company pays tax at the prevailing corporate tax rate on a defined tax base and at a concessionary tax rate of 10% on profits in excess of the tax base. With effect from 1 June 2005, the defined tax base became significantly higher.
For the third quarter FY2005-06, the Group's net profit attributable to shareholders was $53.2 million, an increase of $16.8 million or 46.2% compared to the corresponding period last year. Basic earnings per share increased by 43.6% to 5.17 cents.
The Council on Corporate Disclosure and Governance (CCDG) in Singapore adopted several new and revised Financial Reporting Standards (FRS), which are applicable for financial year 2005-06. For the Group, the main changes are in the recognition and fair value measurement of financial instruments (FRS 39) and the expensing of share options to employees (FRS 102).
The adoption of FRS 39 has no impact on operating profit for Q3 FY2005-06 while FRS 102 resulted in a net negative impact of $2.0 million on operating profit for the quarter.
Year-to-date (April - December 2005)
For the 9 months ended 31 December 2005, revenue rose by $95.5 million (+15.8%) to $698.8 million mainly due to higher workload. Expenditure increased by $84.8 million (+15.9%) to $616.8 million mainly due to higher subcontract, material and overtime costs to support higher workload. There was also a provision for doubtful debts of $5.0 million compared to a writeback
of $3.4 million in the corresponding period last year.
Operating profit increased 15.0% or $10.7 million to $82.0 million.
Increases in share of profits from associated and joint venture companies (+$28.9 million or +55.8% to $80.7 million) and dividend income from an investee company (+$9.4 million to $11.9 million) also contributed to a 31.9% increase in profit before taxation to $181.0 million.
Profit attributable to shareholders was $158.8 million, an increase of $37.0 million or +30.4% over the same period last year. Basic earnings per share increased by 28.4% to 15.49 cents.
GROUP FINANCIAL POSITION
As at 31 December 2005, equity attributable to shareholders amounted to $957.7 million, 11.6% or $99.2 million higher than at 31 March 2005. Total assets increased by 15.3% (+$168.4 million) to $1,268.8 million. Net asset value per share was 93.1 cents, an increase of 8.7 cents (+10.3%) from 31 March 2005.
OUTLOOK
With the strengthening of Changi Airport as an aerospace hub, the Company's joint ventures will continue to benefit as they provide a full and comprehensive range of services for the aerospace industry.
While the Company's core business will face competitive pressure on rates, this will be moderated by revenue increases from growth in business volume.
The Company will maintain its focus on quality and total maintenance solutions, planned increases in capabilities, capacity and strategic alliances to strengthen its position as a premier one-stop maintenance, repair and overhaul (MRO) service provider in the Asia-Pacific region.
SIA is a CAPA Member. For more information on the Centre for Asia Pacific Aviation's membership service, please click the icon below.
Expenditure increased at a lower rate of 15.5% to $212.7 million. In line with the higher workload, subcontract, material and overtime costs were higher as compared to Q3 last year.
Note: The SIAEC Group's unaudited financial results for the third quarter ended 31 December 2005 were announced on
2 February 2006. A summary of the financial statistics is shown in Annex A. (All monetary figures are in Singapore
Dollars.)
Share of profits from joint venture and associated companies surged 60.7% (+$10.8 million) to $28.6 million. As at 31 December 2005, there were 19 joint ventures with original equipment manufacturers and airlines in Singapore, Ireland, Hong Kong, Taiwan, Indonesia and Philippines, covering a comprehensive range of high-technology aero-services.
Profit before taxation amounted to $60.6 million, an increase of 46.4% over the same period last year. Provision for taxation was higher mainly due to changes in the Company's tax incentive schemes. The Company pays tax at the prevailing corporate tax rate on a defined tax base and at a concessionary tax rate of 10% on profits in excess of the tax base. With effect from 1 June 2005, the defined tax base became significantly higher.
For the third quarter FY2005-06, the Group's net profit attributable to shareholders was $53.2 million, an increase of $16.8 million or 46.2% compared to the corresponding period last year. Basic earnings per share increased by 43.6% to 5.17 cents.
The Council on Corporate Disclosure and Governance (CCDG) in Singapore adopted several new and revised Financial Reporting Standards (FRS), which are applicable for financial year 2005-06. For the Group, the main changes are in the recognition and fair value measurement of financial instruments (FRS 39) and the expensing of share options to employees (FRS 102).
The adoption of FRS 39 has no impact on operating profit for Q3 FY2005-06 while FRS 102 resulted in a net negative impact of $2.0 million on operating profit for the quarter.
Year-to-date (April - December 2005)
For the 9 months ended 31 December 2005, revenue rose by $95.5 million (+15.8%) to $698.8 million mainly due to higher workload. Expenditure increased by $84.8 million (+15.9%) to $616.8 million mainly due to higher subcontract, material and overtime costs to support higher workload. There was also a provision for doubtful debts of $5.0 million compared to a writeback
of $3.4 million in the corresponding period last year.
Operating profit increased 15.0% or $10.7 million to $82.0 million.
Increases in share of profits from associated and joint venture companies (+$28.9 million or +55.8% to $80.7 million) and dividend income from an investee company (+$9.4 million to $11.9 million) also contributed to a 31.9% increase in profit before taxation to $181.0 million.
Profit attributable to shareholders was $158.8 million, an increase of $37.0 million or +30.4% over the same period last year. Basic earnings per share increased by 28.4% to 15.49 cents.
GROUP FINANCIAL POSITION
As at 31 December 2005, equity attributable to shareholders amounted to $957.7 million, 11.6% or $99.2 million higher than at 31 March 2005. Total assets increased by 15.3% (+$168.4 million) to $1,268.8 million. Net asset value per share was 93.1 cents, an increase of 8.7 cents (+10.3%) from 31 March 2005.
OUTLOOK
With the strengthening of Changi Airport as an aerospace hub, the Company's joint ventures will continue to benefit as they provide a full and comprehensive range of services for the aerospace industry.
While the Company's core business will face competitive pressure on rates, this will be moderated by revenue increases from growth in business volume.
The Company will maintain its focus on quality and total maintenance solutions, planned increases in capabilities, capacity and strategic alliances to strengthen its position as a premier one-stop maintenance, repair and overhaul (MRO) service provider in the Asia-Pacific region.
SIA is a CAPA Member. For more information on the Centre for Asia Pacific Aviation's membership service, please click the icon below.
