- SIA Engineering (SGX:S59) reported net profit of S$41.9mil in 3QFY26, bringing 9MFY26 net profit to S$125.2mil, which accounted for 72% of the street’s full-year expectations, modestly below the implied run-rate.
3QFY26 results miissed expectations slightly.
- - Read this at SGinvestors.io -
- Revenue rose 8.7% y-o-y to S$353.1mil in 3QFY26, with number of flights handled and A checks up 3% and 4% y-o-y, respectively, though partially offset by lower heavy checks likely due to timing.
- While operating profit increased 27.7% y-o-y to S$6.0mil off a low base, operating leverage remained muted as start-up losses and IT costs capped margins.
- - Read this at SGinvestors.io -
Overall outlook remaiins constructive, though the margiin turnaround narrative is challenged.
- Although start-up and IT costs have likely peaked, cost drag will persist into FY27F as the group prepares for the operational readiness of its second hangar in Subang, expected in 2HFY27F, while the new Manila line maintenance unit will require time to scale towards breakeven.
- In addition, associate and JV contributions could suffer from near-term margin pressure at SAESL as it embarks on its capacity expansion programme.
- While the recent letter of intent with Safran to broaden cooperation on LEAP engine MRO, including the potential formation of a JV in Singapore, is strategically positive, any meaningful earnings contribution will take time and competitive intensity in Singapore remains high, with ST Engineering (SGX:S63) a leading LEAP MRO provider in Asia.
Maintain HOLD.
- Read more at SGinvestors.io.
