SIA Engineering's operating profits hurt by higher staff, subcontract service costs

But revenue surged by 3.3%.

According to OCBC Investment Research, SIA Engineering Company's (SIAEC) 2Q14 results were in-line with the street's expectations. 

Operating profit contracted 9.8% YoY to S$28.5m due to higher staff and subcontract service costs.

OCBC notes 2Q14 PATMI thus rose 5.8% YoY to S$71.0m. However, OCBC notes that 1H14 PATMI and basic EPS are only up 2.0% and 1.0% at S$140.0m and 12.60 S cents respectively.

Here's more:

1H14 basic EPS of 12.60 S cents formed 50% of OCBC's and 49% of consensus FY14 estimates. 2Q14 revenue rose 3.3% YoY to S$293.9m, chiefly due to an increase in airframe and maintenance overhaul work. 

Share of profits from associated and JV companies expanded 25.0% YoY to S$48.5m, representing a contribution of 60.0% of the group's pre-tax profits.