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SIA Engineering Engineers Higher Profits

Siaec_logo SIA Engineering Company (SGX: S59), a subsidiary of Singapore Airlines (SGX: C6L), just released its latest quarter results. The company’s financial year runs from March 2013 to March 2014

SIA Engineering grew its revenue by 3.3% to S$293.9 million for the second quarter of 2014 (2Q 2014). This was mainly due to increase in airframe and component overhaul work. The operating profit, however, was down 9.8% to S$28.5 million mainly due to higher staff and subcontract services costs.

The share of profits from associated and joint venture companies surged 25.0% to $48.5 million and this accounted for 60.0% of the SIA Engineering’s pre-tax profits during the quarter. The net earnings grew 5.8% to S$71.0 million for the quarter.

For the first half of the financial year, revenue was flat at S$583.3 million and net profit went up by 2% to S$140.0 million over the previous year. The share of profits from associated and joint venture companies increased 19.4% to $94.1 million.

As of 30th September 2013, the total debt carried on the balance sheet was at S$11.5 million. The total cash hoard was at S$465.8 million.

For 2Q 2014, the company used S$31.6 million in cash flow from operations as compared to that of S$11.9 million used in 2Q 2013. For the first half of 2014, the company generated S$24.1 million in cash flow from operations as compared to that of S$42.0 million generated in first half of 2013.

An interim dividend of 7.0 Singapore cents per share was declared, which is unchanged from last year.

The company said that the performance of the company is “expected to remain stable in spite of the prevailing global economic uncertainties” and that it will remain focused on “costs, productivity improvements and growing our business.”

Grow its business, it did. Benjamin Graham said that in the short-term, the market is a voting machine but in the long-term, the market is a weighing machine. For the past five years, SIA Engineering’s share price increased by 155.6% overall. It triumphed the Straits Times Index (SGX: ^STI) by 73.6% during the same period.

The shares last traded at S$5.06. The historical PE ratio is at 20 and the dividend yield is at 4.3%.

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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 Sudhan P doesn’t own shares in any companies mentioned.