SIA Engineering's core operating margin dropped to 9.6%

Blame it on higher subcontract costs.

According to CIMB, 1QFY14 net profit of S$69m (up 5% q-o-q, down 2% y-o-y) came in largely within expectations, and made up more than 24% of full-year FY14 earnings estimates. 

Revenue of S$289.4m showed similar flattish trends – lower 4% y-oy on lower material and fleet management revenue – but core operating margins dipped during the quarter to 9.6%, down from 10.9% in 4Q13 and 11.4% in 1Q13, likely on the back of higher subcontract costs. 

Here's more from CIMB:

Offset by strong performance at JV/assoc level. The performance of the Group’s JV/ associates – largely driven by its engine shops like SAESL and Eagle Asia – picked up strongly in 1Q14, likely helped by a stronger USD as well.

Contributions from JV/ associates improved 14% y-o-y to S$45.6m, accounting for close to 58% of Group PBT during the quarter.