SIA Engineering - OCBC Investment 2023-02-21: Continued Recovery

• 3QFY23 (Oct-Dec 2022) the first quarter of no wage support for SIA Engineering since the onset of pandemic.
• Flights handled at Changi Airport by line maintenance back to 71% of pre-pandemic volume.
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SIAEC's group expenditure outpaced the growth in revenue, mainly due to the absence of wage support in 3QFY23

• SIA Engineering (SGX:S59)’s 3QFY23 revenue rose 48.6% y-o-y or 9.1% q-o-q to S$208.1m, boosted by growth across all business segments on the back of continued recovery in flight activities and flights handled.
• Group expenditure grew 49.3% y-o-y to S$220.6m, outpacing the increase in revenue, mainly due to the absence of wage support. Excluding the impact of wage support, group expenditure would have grown 35.5% y-o-y, mainly due to higher manpower costs as SIA Engineering ramps up recruitment efforts to support the aviation recovery.
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• As such, SIA Engineering's 3QFY23 net profit came in at S$12.8m which was 61.4% lower y-o-y, in-line with our expectations.

Improvement across segments

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Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2023-02-21 SGinvestors.io

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