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Yearly Net Profit at SIA Engineering Company Slips 1.6%

Siaec_logoSIA Engineering Company (SGX: S59), or SIAEC, a subsidiary of Singapore Airlines (SGX: C6L) and a constituent of the Straits Times Index (SGX: ^STI), released its results for the financial year of 2014 on Monday.  The firm’s financial year runs from March 2013 to March 2014.

For the year, SIAEC grew its revenue by 2.7% year-on-year to S$1.2 billion. This was mainly due an increase in line maintenance and airframe and component overhaul work. The operating profit, however, was down 9.8% to S$115.6 million largely because of higher staff costs, subcontract and material costs.

The engineering outfit has 25 joint ventures, spread over nine countries. The share of profits from associated and joint venture companies went up 8.3% to $162.3 million. This accounted for 61% of the net profit, which was at S$265.7 million, a dip of 1.6% year-on-year. The main contributors to the share of profits were the engine repair and overhaul centres, which accounted for $125 million of the total S$162.3 million.

Basic earnings per share was at 23.88 Singapore cents for this financial year, down 2.6% from the previous year.

As of 31st March 2014, the firm had cash and cash equivalents of S$535.7 million, as compared to S$522.9 million in the previous year. Long-term debt stood at S$13.6 million, the highest in recent history. However, it is still manageable as it represents just 5% of net profit.

Operating cash flow for the year dipped 15.4% to S$113 million. Capital expenditure was at S$67.9 million, which more than doubled from the previous year, translating to a free cash flow of S$45.1 million. In the previous year, free cash flow was at S$101.8 million.

SIAEC will be paying out a final dividend and a special dividend of 13.0 and 5.0 Singapore cents per share respectively. Together with the interim dividend of 7.0 cents per share already paid out earlier in the year, the total dividend payment for the financial year will be 25.0 Singapore cents per share.

The shares last traded at S$4.80, giving a historical PE ratio of 20 and a dividend yield of 4.2%, excluding the special dividends.

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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.