Singapore’s Big Loser for the Week

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As of yesterday’s close, aircraft engineering outfit SIA Engineering Company Limited (SGX: S59) has dropped by 6% since last Friday to S$4.65.

SIA Engineering is an aviation maintenance, repair, and overhaul company that provides engineering services to airlines. The firm has a client base of over 80 international carriers that include Cathay Pacific, United Airlines and Air Canada. It also has around 25 joint ventures and subsidiaries across nine countries. SIA Engineering’s joint venture partners include engine maker Rolls-Royce, in-flight entertainment and communications maintenance and repair company Panasonic Avionics, and another engine maker Pratt & Whitney.

Since 23 July 2014, SIA Engineering’s share price has dropped close to 8%. The firm went ex-dividend on 24 July when it paid out S$0.18 per share in dividend for its latest financial year. On 25 July, the engineering outfit released its first quarter results and reported that revenue went up slightly by 1.6% year-on-year to S$294.1 million but net profit plummeted 22.5% to S$53.5 million.

A few days later on 30 July 2014, SIA Engineering’s parent company Singapore Airlines Ltd. (SGX: C6L) announced its first quarter earnings. The full service carrier saw a 71% plunge in net profit as it brought in just S$34.8 million for the three months ended 30 June 2014, down from S$121.8 million a year ago. This was on the back of weak revenue and stiff competition. Shares of Singapore Airlines had dropped by 2.5% in 31 July 2014 after the results release.

SIA Engineering and Singapore Airlines are currently trading at 21 and 43 times their historical earnings respectively.

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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.