SINGAPORE (Feb 7): Maybank Kim Eng and CIMB are keeping SIA Engineering at “hold” as the research houses await a visible recovery in MRO (maintenance, repair and overhaul) volume and near-term growth outlook for the sector remains challenging.
3Q17 headline net profit of $52.6 million included a $2.3 million gain on partial disposal of an associate while year to date of $159 million included $178 million from restructuring of its Rolls-Royce JV and an increase in related staff cost of $23.1 million. Excluding various one-offs, 3Q17 core profit declined 10.5% y-o-y but grew a significant 40% sequentially from 2Q17 which was affected by various divestments.
CIMB says SIA Engineering’s 3Q17 revenue of $272 million was in line with its expectations. Key to underperformance was lower fleet management although this was mitigated by higher line maintenance revenue.