SINGAPORE (July 26): SIA Engineering posted a nearly five-fold jump in 1Q ended June earnings to $198.4 million, or 17.67 cents per share, from $41.3 million a year ago.

The stronger bottomline was due to a $141.6 million gain from the divestment of its 10% stake in Hong Kong Aero Engine Services (HAESL) to Rolls-Royce Overseas Holdings (RROH) and Hong Kong Aircraft Engineering Company (HAECO).

Additionally, the group received a special dividend of $36.4 million from HAESL following the divestment of HAESL’s 20% stake in Singapore Aero Engine Services Limited (SAESL) to Rolls-Royce Singapore (RRS), bringing the overall gain from the divestment to $178.0 million.

Revenue dropped 2.1% to $271.6 million in 2Q17 on the back of a decline in fleet management revenue. This was however partially mitigated by higher revenue from line maintenance and airframe and component overhaul.

Share of profits of associated and joint venture companies came in at $20.7 million after a 13.8% decrease of $3.3 million from the corresponding quarter last year.

Net asset value per share as at 30 June 2016 was 137.9 cents.

Moving forward, the company says it expects a challenging operating environment to persist amid growing global economic uncertainties.

“Aided by a strong balance sheet, the company will continue to invest in capabilities to handle new-generation aircraft, and on innovation initiatives and new technologies to enhance customers' fleet efficiencies and reliability, while generating higher productivity and process improvements,” states SIA Engineering.

SIA Engineering closed 0.79% lower at $3.75.