SIA Engineering’s net profit rises by 5.7% to $44.5m

A cut-back on expenses led to the growth.

Lower spending immediately translated to a larger profit for SIA Engineering, as its lower subcontract, staff, and material costs offset a 6.7% decline in the company’s topline.

According to OCBC, SIA Engineering seemingly had answers to every obstacle, as muted contributions from its airframe and component overhaul as well as its fleet management segments were offset by higher gains from its line maintenance segments.

Operating expenses also fell by 11.3% to $239.0m, capping a modest quarter for the company, said OCBC.

“The lower operating costs resulted in a 10.5ppt improvement in its operating profit margin to 23.9%. For 1HFY16, revenue dropped 6.2% to S$543.3m on similar reasons as 2QFY16 and PATMI declined 10.3% YoY to S$85.8m, which formed only 44.5% of our FY16 forecasts,” OCBC said.