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Checking In On SIA Engineering’s Full Year Results

Ser Jing - Checking In On SIA Engineering's First Quarter Results (pic)SIA Engineering (SGX: S59) released its full year results on Tuesday evening. The company, which maintains, repairs and overhauls aircrafts for a living, managed to eke out a 0.4% gain in yearly profit from S$269.1m to S$270.1m. Even though profits increased, existing shareholders actually saw a 0.2% decrease in yearly earnings per share (EPS) from 24.56 cents to 24.51 cents due to an increase in share count.

Meanwhile, its annual revenue slipped by 2% year-on-year from S$1.17b to S$1.15b.

Management attributed the slight dip in revenue to lower sales coming from fleet management and projects, which deal with the reconfiguration of aircraft-cabin interiors. Expenses for the company also decreased, with the bulk of it coming from a 19% reduction in subcontract costs from S$169.3m last year to S$136.7m.

The increase in the company’s earnings was also given a helping hand from its share of profits from its associates and joint ventures, which grew by 1.5% from last year’s S$156.9m to S$159.2m.

For the future, SIA Engineering sees a challenging operating environment due to the uncertain global economy but remains confident in turning in a stable performance in the short term. The company will continue to control its costs and believe that its “cluster of strategic partnerships and diversified portfolio positions the Group well for sustainable growth”.

The company has proposed a dividend of S$0.15 per share that’s subject to shareholders approval. That brings the full year pay-out to S$0.22 per share, 5% higher than last year’s dividends of S$0.21.

Investors in Singapore Airlines (SGX: C6L), which will report its results on Thursday, will likely be interested in SIA Engineering’s results as the latter is a subsidiary of the former.

SIA Engineering is currently trading at $5.23. Potential investors would be paying for 21 times its full year profit and get a dividend yield of 4.2% based on a pay-out of S$0.22 per share.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.