The share price of the SGX-listed SIA Engineering Company Limited (SG:S59) soared after the company posted strong Q2 results driven by air travel recovery. The company saw a huge 82% increase in its profits of S$59.3 million as compared to S$32.5 a year ago. The company’s revenues also increased by 41.9% to S$514 million. The growth was attributed to a resurgence in the travel sector, with flight activities recovering following the pandemic.
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The company made a significant improvement in its line maintenance unit in Singapore, which reached 87% of pre-pandemic levels, up from 55% last year. The group’s net profit during the period amounted to S$59.3 million, marking an increase of S$26.8 million compared to the previous year. The company also made a small operating profit of S$0.1 million, showing an improvement of S$10.9 million on a year-over-year basis.
In terms of shareholders’ returns, SIA Engineering has declared an interim dividend of S$0.02 per share, reflecting the company’s financial strength over its no-dividend policy last year.
SIA Engineering provides extensive aircraft maintenance, repair, and overhaul (MRO) services to more than 80 international airlines worldwide.
The Share Price Performance
The SIA Engineering share price gained 3.5% today after the announcement of the results. Year-to-date, the stock has experienced a loss of 1.25% in trading. During its financial year 2023, there was a significant resurgence in in-flight activities due to the relaxation of border restrictions. This strong recovery increased the demand for maintenance, repair, and overhaul services, leading to revenue growth across all business units. Over the last three years, the shares have delivered a growth rate of 40%.
Analysts hold an optimistic view as the aviation sector’s overall outlook appears promising, which bodes well for the company’s future. However, the pace of recovery is expected to be less rapid as compared to last year.
