- SIA Engineering (SGX:S59)'s 1HFY26 results were within expectations. Revenue and adj. PATMI were 52% and 50% of our FY26e forecast, respectively. Operating profit spiked 282.4% y-o-y to S$13m. Share of profits of associates and JV increased 21.7% y-o-y to S$71.3m, while net profit jumped 21.1% y-o-y to S$83.3m (excl. one-offs). Interim dividends of 2.5 cents per share is up 25% y-o-y.
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- Start-up costs due to subsidiaries’ expansion led to losses amounting to S$8.1m, temporarily weighing down on earnings.
The Positives
Margin expansion.
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- In Singapore, line maintenance handled 79,254 flights (up 2.6% y-o-y) and base maintenance performed 44 heavy checks (up 33% y-o-y) in 1H26. Singapore Airlines (SGX:C6L)’s S$1.3bn contract repricing in April 2025 for a term of 2 years, plus a one-year extension option, supported margins. Operating margins would have been higher if not for the S$4m impairment loss.
Strong associatesand JV performance.
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