SIA Engineering’s net profit falls flat at $41.7m

It was dragged down by mounting operating losses.

Singapore Airlines’ engineering arm felt the sting of rising staff costs as its net profit went unchanged on back of an operating loss of $1.6m.

According to a report by UOB Kay Hian, the operating losses stemmed from staff costs arising from the firm’s EL gain.

“Excluding the provision, operating profit would have fallen 6% yoy to S$19.7m. In addition, SIAEC continues to guide for a challenging environment,” the report said.

Meanwhile, SIAEC’s revenue also fell by 2.1% due to lower fleet management revenue, caused by the transfer of the business to associate BAPAS, a partnership between SIAEC and Boeing.

“Under the terms of the partnership, BAPAS would have handled the fleet management of the SIA Group’s B777 aircraft. SIAEC however indicated that line maintenance and airframe maintenance revenue increased,” the report noted.