- SIA Engineering’s 1HFY24 net profit of S$59m (+83% y-o-y) is in line with our expectation, at 49% of our full-year forecast. Underlying demand for MRO services remained strong, although earnings of the engine and component division were still somewhat hindered by supply chain issues.
- - Read this at SGinvestors.io -
- Maintain BUY with an unchanged target price of S$2.67.
1HFY24 Bottom line in line.
- SIA Engineering (SGX:S59)’s 1HFY24 net profit of S$59m (+83% y-o-y) is in line with our expectations, forming 49% of our full-year forecast. 2QFY24 net profit of S$32m (+64% y-o-y) was an improvement over 1QFY24’s S$27m.
- - Read this at SGinvestors.io -
Operating profit behind our projections...
- 1HFY24 operating profit of consolidated entities was merely a breakeven, missing our expectations. The miss was due mainly to the still loss-making position of the newly established engine and component division, whose performance:
- has yet to stabilise, and
- was adversely affected by the shortage of components related to sector-wide supply chain issues.
- In addition, 2QFY24 recognised an impairment loss of receivables of over S$2m, mostly related to MYAirline, which has suspended operations since mid-Oct 23.
- Excluding the impairment loss, SIA Engineering would have recorded a small positive operating profit in 2QFY24.
…but the miss was offset by strong JV/associate contribution...
- Read more at SGinvestors.io.
