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SIA Engineering Company Ltd’s Worrisome Track Record In Growing Its Business

SIA Engineering Company Ltd (SGX: S59) provides aircraft maintenance, repair, and overhaul (MRO) services to over 80 international airlines around the world.

One of the things that I like to do when analysing a company is to study its track record. The past is no guarantee of the future, but historical information is the most reliable thing that we can use as our basis to forecast what lies ahead.

And this brings me to the main purpose of this article, which is to have a quick overview of SIA Engineering’s historical business performance. The table below is a snapshot of the company’s important financial metrics from FY2013/14 (financial year ended 31 March 2014) to FY2017/18:

Source: SIA Engineering FY2017/18 annual report:

Here are a few points worth noting:

1. Revenue declined by 7.6% in total from S$1.18 billion to S$1.09 billion.

2. Profit attributable to shareholders fell by 30.7% from S$265.7 million to S$184.1 million in the period above. SIA Engineering’s profit fell much faster than revenue mainly because of a decline in the share of profits from associates and joint ventures, and a slower dip in expenditure.

3. SIA Engineering’s dividend per share (excluding special dividends) was lowered by 35% from 20 cents in FY2013/14 to 13 cents in FY2017/18, roughly in line with the company’s fall in profit.

In sum, SIA Engineering has a worrisome track record of business growth over the last five years. It will be interesting to see whether the company can turn around its performance in the future.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.