- SIA Engineering (SGX:S59)’s 9MFY26 business update met our expectations.
3QFY26 revenue and net profit grew 8.7% and 9.7% y-o-y
- 3QFY26 revenue grew 8.7% y-o-y to S$353.1m on steady MRO demand. The line maintenance unit handled 41.5k flights in Singapore during the quarter, marking an increase of 3% y-o-y. Meanwhile, its base maintenance unit performed 162 light checks and 17 heavy checks at the Singapore base (3QFY25: 156 and 20 light and heavy checks, respectively).
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- Together with a 20.5% y-o-y increase in share of profits from associates and joint venture (JV) companies to S$38.8m, net profit came in at S$41.9m, which is 9.7% higher y-o-y.
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Constructive MRO outlook.
- Aircraft and engine availability remain a significant growth constraint for the aviation industry, with the International Air Transport Association (IATA) estimating that order backlogs have reached almost 60% of the active fleet as at Dec 2025. Original equipment manufacturer (OEM) Airbus has also guided for lower-than-expected commercial plane deliveries in 2026, citing limited engine availability at Pratt & Whitney.
- We like that SIA Engineering has been actively investing in capacity expansion to benefit from the ongoing MRO upcycle. Notably, SIA Engineering has obtained the necessary regulatory approvals for the first of two hangars at Base Maintenance Malaysia (BMM), with the second hangar expected to come online in 2HFY27. After the quarter, the company has also commenced line maintenance operations in Manila.
Upgrade to BUY.
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