SIA Engineering

SIA Engineering

Postby winston » Thu Jul 24, 2008 8:38 am

SIA Engineering reported a net profit of S$58.7 million ($43.03 million) for the first quarter of 2008, a fall of 16.7 percent from S$70.5 million ($51.69 million) in the year-ago period.

Its revenue for the three months ended June 30 dropped 7.4 percent to S$250.2 million ($183.4 million) from S$270.1 million ($198 million) a year ago.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: SIA Engineering

Postby millionairemind » Fri Jul 25, 2008 9:52 pm

DJ MARKET TALK: Nomura Cuts SIA Engineering Fair Value To S$4.07

0850 GMT [Dow Jones] STOCK CALL: Nomura cuts fair value for SIA Engineering (S59.SG) to S$4.07 from S$4.87 after lowering FY09-10 earnings forecasts by 16%-18% to reflect reduced airframe maintenance, components work, which partly resulted in 16.6% on-year fall in net profit for fiscal 1Q09 ended June.

But keeps Buy call on undemanding valuations, attractive dividend yield.

Expects dividend payouts to be maintained at above S$0.20/share, translating to FY09-10 yields of 5.8%, 6.1% respectively.

Stock down 0.9% at S$3.32. (FKH)

(END) Dow Jones Newswires

July 25, 2008 04:50 ET (08:50 GMT)
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
User avatar
millionairemind
Big Boss
 
Posts: 8183
Joined: Wed May 07, 2008 8:50 am
Location: The Matrix

Re: SIA Engineering

Postby winston » Fri Oct 03, 2008 12:06 pm

Not vested. From UOB-Kay Hian:-

SIA Engineering: Target: S$3.00
− Yield: 9-10%.
− As airlines now lease aircraft as opposed to outright purchases, lessors tend to award maintenance contracts with established MROs like SIA Engineering
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: SIA Engineering

Postby millionairemind » Tue Nov 04, 2008 9:03 am

SIA Engg Q2 net dips 1.5% to $73.4m
Moderate growth, lower contributions from JVs cited

By VEN SREENIVASAN

THE impact of a creeping slowdown in the aviation industry saw SIA Engineering Co's (SIAEC) topline revenue growth moderating during the second quarter, while contributions from its 22 associates and joint ventures slipped slightly.

The result was a 1.5 per cent year-on-year dip in earnings for the July-September quarter to $73.4 million. This came on the back of a modest 5.1 per cent rise in topline revenue to $279.3 million for the quarter.

Share of profits from joint venture and associate companies slipped 6.1 per cent to $39.7 million. The fall on a quarter-to-quarter sequential basis was 8.9 per cent.

First half net profit slid 8.9 per cent to $132.1 million, from $145 million a year earlier. Revenue slipped 1.2 per cent to $529.5 million.

A steady downtrend in air traffic saw SIAEC's airframe and component overhaul revenue - which accounts for half the company's business - slipping 5.7 per cent during the first half to $317.1 million.


As a result, the contribution to overall profit fell by 37.3 per cent during the first half to $23.5 million, from $37.5 million a year earlier.

On the other hand, an 8.1 per cent increase in line maintenance and technical ground handling revenue to $179.8 million helped cushion the fall in airframe and components side. In fact, this division's first half profit contribution rose a whopping 58.5 per cent to $32.5 million.

A third unit, fleet management revenue - for 57 planes belonging to seven clients - was flat at $32.5 million.

But first half profitability for this business plunged 90.6 per cent to just $500,000.

SIAEC's business is still predominantly from its parent Singapore Airlines group, which accounted for two-thirds of its revenue.

Its subsidiaries got 57 per cent of their revenue from working on SIA's planes, while joint ventures and associates obtained 69 per cent of their revenue from non-SIA clients.

The company ended its first half with $280.5 million in cash or a net asset per share of $1.032.

It also declared an interim dividend of five cents a share.

The payout of $53.9 million translated into a payout ratio of 41 per cent.

Despite the obvious challenges, chief executive William Tan remains upbeat.

'We should be less impacted than other MRO players because we service the new generation fleets which are less likely to be parked during a slowdown,' he told BT recently.

'Also, the fact that we provide integrated services and have extensive after sales collaborations with OEM (planemakers) means our service will remain in demand as long as these new super efficient planes fly. We have first mover advantage through our investments in infrastructure, systems and human resources. So I would say we are relatively less exposed.'

The company has been boosting efficiency and driving costs by building facilities closer to clients or in lower cost markets. This week, it will commission work on the first of its three new hangars at Clark, Philippines.

'The market is there, and we have quite good visibility of what's going on ahead. We are well diversified in aircraft types and well hedged against any particular change that impacts the industry.'

The stock closed three cents or 1.6 per cent higher yesterday at $1.95
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
User avatar
millionairemind
Big Boss
 
Posts: 8183
Joined: Wed May 07, 2008 8:50 am
Location: The Matrix

Re: SIA Engineering

Postby cif5000 » Fri Dec 26, 2008 10:23 pm

I reproduce this from my investment diary. Welcome comments.

(Note to admin: Hope to consume more of your bytes)

+++++++++++++++++++++++++++++
Mon 20 Oct 2008 - 21:50
A comparison of SIA Listed Subsidiary.

Both SIA Engineering and SATS are subsidiaries of SIA. They were listed at the same time on the SGX and their share prices had tracked each other rather closely all this while. Their reported profits had also been very close. Drawing their revenues mainly from the parent company, their growths were also tied to SIA performance and on Singapore performance as a global air travel hub. SIA owns more than 80% of the shares outstanding although rumor has it that those shares will be divested soon. I doubt so especially since the market has nosedived in the recent months.

Although quite similar in some aspects, their businesses differ significantly. The table below tabulates a comparison between the reported numbers in FY08, purely for my own reference as all information are readily available in their annual reports – both are very comprehensive accounts I would say.

From AR08:
Image

Technical Expertise
The qualification, experience and education of employees of SIAEC has to be higher (engineers and specialized technicians) compared to SATS (check-in counter staffs, catering staffs). This translates to higher barrier of entry. Although the barrier of entry is a summation of many other thing, the staff expense constitutes the main portion as witness by it highest cost. The more technical it is, the higher the barrier becomes. It takes much more time to train and qualify a jet engine technician than to groom a baggage handler.

Customer Risk
The risk of a bad service/product is determined by 3 factors: Occurrence, Consequence, Detection/Control. Incidentally, from the risk management perspective, the consequence of a bad aircraft maintenance can be disastrous, both from a passenger point of view and business point of view. I believe, not sure, that Qantas has chosen their regional service center to be based in Malaysia. Such short term cost savings may cost the company much more into the future. Just witness the sudden increases in the number of incidences. Therefore, if I were an airliner, I would choose a more reputable service provider and pay slightly more than to compromise my safety record.

On the other hand, having a luggage delayed by 10 minutes or a bad meal on board wouldn’t create such a big hoo-hah. These risks can be mitigated with a detection/control policy – with no fatalities.

Capital Expenditure
The presumption on an engineering company is that the capital expenditure is high, usually to procure state-of-the-art equipment to stay at the forefront of the technological race. However, it seems that SIAEC does not need to face with that problem. I like to think of it as a Vicom for aeroplane inspection, albeit more sophisticated. Spending <60m on capex against a revenue of 1bn and a depreciation expense of 33m, the business is definitely coughing out cash. The construction of a hangar would probably be the biggest capex.

Other Expenditure
The Operating Cash Flow from SATS is 3 times as much as SIAEC. However, it seems that the business has hit the wall. Diversifying into the catering business via Country Road into Macau casino, Does that mean that serving the airline business has not had much room to work on? I detest companies diversifying from the core businesses. In other words, the predictability of SATS future is not as good as SIAEC. For SIAEC, the conversion of 747 passenger liners to freighters will at least keep it occupied for the foreseeable future. As much as I hated contract based jobs, the probability of SIAEC getting non-SIA projects will be high if it proves its capability in this area, while enjoying the first mover advantage, thanks to SIA.

Bargaining Power
ZERO. Being 80% owned by SIA and with the majority of the businesses coming from the parent, forget about bargaining. Applicable to both businesses. The profitability depends largely on the profitability of SIA. If SIA flies into some financial difficulties, the profits of both subsidiaries will be squeezed tightly. That means, should SIA sold its stakes in her subs, expect the profit margin to decline substantially. I can also imagine how their profits will be squeezed should SIA decide to divest the shares. Then, there is no incentives to pass the profits to the subsidiaries and get the money back as dividends.

About Singaporeans
This is purely my own opinions. Singaporeans are better on technical jobs than on service jobs. At least, the Chinese smiles are sweeter.

NOTE: This is written on my flight to Shanghai while having my 6th beer, and with a strong biasness towards SIAEC. I was initially favoring SATS simply because of the negativity towards contract-based and engineering-based nature of SIAEC. I reverse my bias.

+++++++++++++++++++++++++++++
Wed 22 Oct 2008 - 2:13

A look at Goodrich gives us a brief idea about the type of margins and operating indicators that can be expected out of a MRO business.
http://www.goodrich.com/annualreport200 ... AR2007.pdf

The MRO business is segmented under the Nacelles and Interior Systems.

Operating Income/Revenue (in millions US$)
2007: 531.0/2,169.0 (24.5%)
2006: 416.3/1,983.5 (21.0%)
2005: 320.9/1,734.9 (18.5%)
Slightly lower than SIAEC Operating Margin of approximately 27%

Capex/Depreciation (in millions US$)
2007: 135.9/77.1
2006: 107.9/72.2
2005: 79.0/67.6
Capex and depreciation are slightly above 5% and 3% of revenue, comparable to SIAEC.

Assets Employed (in millions US$) (ROA)
2007: 2,505.6 (21.2%)
2006: 2,148.6 (19.4%)

The reason for checking these numbers is to give me an indication whether SIA had been benefitting SIAEC. The motivation for that is to fetch a higher selling price if they decide to sell (and then squeeze the new owner).

Looking at Goodrich, it seems like the MRO business is indeed a lucrative one.

+++++++++++++++++++++++++++++
Wed 22 Oct 2008 - 20:54

Goodrich specialization is in landing gear. If I am not wrong, SIAEC engages them on this area.
User avatar
cif5000
Foreman
 
Posts: 277
Joined: Wed May 14, 2008 7:04 pm

Re: SIA Engineering

Postby kennynah » Fri Dec 26, 2008 10:29 pm

Technical Expertise
The qualification, experience and education of employees of SIAEC has to be higher (engineers and specialized technicians) compared to SATS (check-in counter staffs, catering staffs). This translates to higher barrier of entry. Although the barrier of entry is a summation of many other thing, the staff expense constitutes the main portion as witness by it highest cost. The more technical it is, the higher the barrier becomes. It takes much more time to train and qualify a jet engine technician than to groom a baggage handler.


i have a personal friend who is a Foreman, having rose from being a Senior Aircraft Engineer, with SIAEC. He had to be an apprentice for 3 years before he was accorded the license to operate as an Aircraft Engineer. So, you are, right that it takes a lot of time and money to train the technicians... such training never stops, as each type of aircraft requires a different certification...eg. 737, 747, 777, A380, A310, etc...all require the technician to be properly trained and then pass the required examinations before they can be certified to work on these individual aircraft type...
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: SIA Engineering

Postby millionairemind » Mon Feb 02, 2009 7:22 pm

February 2, 2009, 5.44 pm (Singapore time)

SIAE's Q309 net profit climbs 17.5%
By ANGELA TAN

SIA Engineering Company on Monday reported net profit for the third quarter ended Dec 31, 2008 rose 17.5 per cent to S$63 million compared to S$53.6 million a year ago.

Revenue for the third quarter was up 8.6 per cent at S$270 million, compared to S$248.6 million the previous year.

The increase was due mainly to higher Line Maintenance revenue, with more flights handled, and a turnkey project to redesign, retrofit and overhaul a B747-400. Fleet Management Programme also contributed to the increase in revenue.

For the three month period, basic earnings per share rose to 5.84 cents from 4.99 cents previously.

Expenditure in third quarter reflected higher staff costs as it included aspecial 60th anniversary bonus paid to employees.

For the 9-month to end Dec 2008, net profit however slipped to S$195.1 million compared to S$198.6 million a year ago.

Basic earnings per share was 18.11 cents for the 9 months ended 31 December 2008.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
User avatar
millionairemind
Big Boss
 
Posts: 8183
Joined: Wed May 07, 2008 8:50 am
Location: The Matrix

ST Engineering

Postby winston » Wed Mar 04, 2009 8:57 am

Singapore Hot Stocks-SIA Engineering in focus

SINGAPORE, March 4 (Reuters) - Singapore's SIA Engineering may be in focus on Wednesday after DBS Group downgraded its recommendation on the firm to "hold" from "buy" and cut the target price due to a slower demand outlook for the airline industry.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: SIA Engineering

Postby winston » Fri Mar 27, 2009 10:01 am

SIA ENGINEERING RISES ON CONTRACT GAIN ** Shares of Singapore-listed SIA Engineering rose as much as 7.6 percent after the company said it signed a fleet management contract with Bahrain's Gulf Air.

SIA Engineering said the long-term contract will commence in June 2009, complementing a current 3-year heavy maintainance contract signed with Gulf Air in February 2008 and increasing business with Gulf Air's airbus fleet to more than $100 million.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: SIA Engineering

Postby millionairemind » Mon Nov 02, 2009 7:14 pm

November 2, 2009, 5.33 pm (Singapore time)

SIAE's Q2 net profit falls nearly 17%

By ANGELA TAN

SIA Engineering Company Limited on Monday reported net profit for the second quarter to end September was at $61.1 million, $12.3 million or 16.8% lower than a year ago.


The company said profits from associated and joint venture companies declined $7.7 million or 19.4% to $32.0 million. This represents a contribution of 44.9% to the group's pre-tax profits.

The basic earnings per share was 5.66 cents.

Revenue decreased $31.2 million or 11.2% to $248.1 million. The decline was mainly due to lower airframe and component overhaul work, material usage and revenue from the B747-400 turnkey project. This was partially mitigated by higher Line Maintenance revenue, with more flights handled and an increase in aircraft support work, and Fleet Management revenue.

The Group has a healthy cash balance of $302.2 million as at 30 September 2009, after a payment of $118.7 million final dividend for FY 2008-09 during the quarter.

The company is proposing a dividend of 5 cents a share, unchanged from a year ago.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
User avatar
millionairemind
Big Boss
 
Posts: 8183
Joined: Wed May 07, 2008 8:50 am
Location: The Matrix

Next

Return to S to T

Who is online

Users browsing this forum: No registered users and 12 guests