SINGAPORE (July 20): SIA Engineering Company’s (SIA EC) results that came in last Friday (July 17) were “downbeat” as expected, but analysts believe the worst is over for the company as international borders begin to gradually reopen following the Covid-19 outbreak.

However, DBS Group Research analysts Suvro Sarkar and Jason Sum choose to remain “more conservative” about flight traffic assumptions for the rest of FY21 and FY22 due to the lack of the Jobs Support Scheme (JSS) grants from the Singapore government to buffer SIA EC’s balance sheets.

“Note that FY22 does not have the benefit of JSS grants, so the earnings recovery is much steeper than it looks. Cash reserves still look solid and should enable SIA EC to maintain dividends at 8 cents in FY21,” say the analysts in a July 20 report.

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