SIA Engineering Company - OCBC Investment 2017-02-06: Core 9MFY17 largely within expectations

SIA Engineering Company - OCBC Investment 2017-02-06: Core 9MFY17 largely within expectations SIA ENGINEERING CO LTD S59.SI

SIA Engineering Company - Core 9MFY17 largely within expectations

  • SIA Engineering Company Ltd’s (SIAEC) 3QFY17 core PATMI after stripping out one-off items and foreign exchange impact, declined 22.4% YoY to S$45.5m, on the back of a 1.1% decrease in revenue to S$272.3m and a 0.4% increase in operating expenses to S$247.1m. 
  • Higher operating expenses were driven by increase in staff costs but partially offset by lower subcontract costs. 
  • 3QFY17 contributions from associated and JV companies also came in 4.8% YoY lower at S$31.6m. 
  • For 9MFY17, revenue fell 1.2% YoY to S$808.7m mainly from lower fleet management and airframe and component overhaul revenue but partly mitigated by higher line maintenance revenue. 
  • Operating expenses rose 2.6% YoY on similar reasons as 3QFY17.
  • 9MFY17 contributions from associated and JV companies were 8.4% YoY lower at S$69.5m. After stripping out the one-time items and foreign exchange effects (9MFY17: +S$9.8m vs.
  • 9MFY16: -S$4.5m), SIAEC’s 9MFY17 core PATMI came in largely in-line with our expectations as it fell 18.5% YoY to S$114.8m, which formed 78.8% of our FY17 forecast. 
  • We continue to expect persistent weak near-term outlook due to longer heavy check intervals for both aircraft and engines. 
  • Maintain HOLD with an unchanged FV of S$3.58.




Eugene Chua OCBC Investment | http://www.ocbcresearch.com/ 2017-02-06
OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 3.580 Same 3.580



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