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SIA Engineering - OCBC Investment 2021-05-07: MRO Environment Remains Challenging

SIA ENGINEERING CO LTD (SGX:S59) | SGinvestors.io SIA ENGINEERING CO LTD (SGX:S59)

SIA Engineering - MRO Environment Remains Challenging

  • SIA Engineering reported net loss in FY21.
  • No dividend was declared.
  • Support from JSS extended to Jan 2022.



SIA Engineering's FY21 results below expectations

  • SIA Engineering (SGX:S59)’s FY21 results came in below our expectations due to impairment loss and a one-time increase in tax provision which weighed on performance of JVs and associates. FY21 revenue fell 55.4% to S$443.0m on the back of low flight activities and massive grounding of aircraft amid subdued travel demand.
  • Share of profits from SIA Engineering's JVs and associates was similarly impacted by COVID-19 and saw a decline of 68.8% to S$39.9m. As such, bottom-line turned from a profit of S$193.8m in FY20 to a loss of S$11.2m in FY21.
  • Without the Job Support Scheme (JSS) of S$181.2m, SIA Engineering's PATMI loss would have been S$192.4m for FY21.
  • No dividend was declared by SIA Engineering for FY21 as compared to S$0.08 in FY20 for cash conservation.


Weak performances across all segments of SIA Engineering

  • Flights handled at Changi by line maintenance was down 81.6% in FY21, but improved slowly on a q-o-q basis. For base maintenance, the number of heavy and light checks performed at Singapore base declined 16.7% and 56.7% respectively due to low flight activities and extension of maintenance intervals with the grounding of aircrafts.
  • Heavy checks at Clark base in the Philippines fell 73.7% as these operations were affected by quarantine measures.

MRO environment remains challenging






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2021-05-07
SGX Stock Analyst Report HOLD MAINTAIN HOLD 2.37 UP 2.050



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