SIA Engineering group profit down 9.7% to $60.5m

Blame it on rising operating costs.

SIAEC Group posted a profit attributable to owners of the parent of $60.5 million for the quarter ended 31 December 2013.

During the quarter, revenue increased by $5.6 million or 2.0% to $283.8 million, while expenditure grew at a higher rate of 4.7% or $11.6 million. As a consequence, operating profit of $25.2 million was $6.0 million lower than that for the same quarter last year. The increase in expenditure was mainly from staff costs, subcontract and material costs. There was also a smaller exchange gain of $0.1 million in the current period as compared to a gain of $1.6 million in the third quarter of last year.

Share of profits from associated and joint venture companies increased by $1.0 million or 2.5% to $41.0 million. This represents a contribution of 58.7% to the Group’s pre-tax profits. After accounting for non-operating items and taxation, profit attributable to owners of the parent at $60.5 million was $6.5 million or 9.7% lower than the corresponding quarter last year.

Basic earnings per share was 5.43 cents for the current quarter.

The Group recorded a profit attributable to owners of the parent of $200.5 million for the nine months ended 31 December 2013.

Revenue increased by $3.9 million or 0.5% to $867.1 million. Expenditure at $785.7 million was $19.7 million or 2.6% higher, primarily due to higher staff costs. The resulting operating profit for the period was $81.4 million.

Associated and joint venture companies showed healthy growth in the current period, as share of profits grew by $16.3 million or 13.7%.

As at 31 December 2013, equity attributable to owners of the parent amounted to $1,292.2 million, $9.7 million or 0.7% lower than at 31 March 2013. The decrease was mainly due to the payment of the final dividend in respect of FY2012-13 and interim dividend for FY2013-14, partially offset by profit earned for the period.

The cash balance of the Group was $462.1 million as at 31 December 2013. Total assets amounted to $1,614.1 million. Net asset value per share as at 31 December 2013 was 115.9 cents.

The near-term global economic outlook remains uncertain. Rising business costs, particularly labour cost, present challenges to our operating environment. This will continue to put pressure on MRO yields.

The Group remains focused on managing costs by pursuing improvements in productivity and enhancing operating efficiencies. Overall, the performance of the Group is expected to remain stable.