SIA Engineering Group (SIAEC) has reported a healthy demand for MRO services in the first quarter of FY2024-2025, reflecting a robust recovery in the aviation sector.

The group’s line maintenance operations in Singapore saw an 11.5% year-on-year increase in the number of flights handled. By the end of June 2024, flight activity had recovered to approximately 95% of pre-pandemic levels, compared to 84% a year earlier.

In base maintenance, the number of aircraft checks completed was lower due to the increased complexity and duration of checks on older generation aircraft. Supply chain constraints also extended the time required for certain checks.

Notably, in May 2024, SIAEC was selected by Air India as a strategic partner for developing its base maintenance facilities in Bangalore, India. This facility is expected to be operational by 2026.

SIAEC further expanded its strategic partnerships with the incorporation of Eaton Aerospace Component Services Asia, a joint venture with Eaton in Malaysia, in June 2024. This new entity will handle MRO work on Eaton-manufactured components for aircraft fuel and hydraulic systems.

SIAEC holds a 49% stake in this joint venture, increasing its portfolio to 24 subsidiaries and joint ventures across eight countries.

Outlook

The demand for MRO services remains strong, driven by the continued increase in flight activity. However, the industry faces challenges such as a tight labor market, supply chain issues, and elevated costs.

SIAEC plans to address these challenges by enhancing operational efficiency through its continuous improvement programme, maintaining cost discipline, and expanding its capabilities and geographic reach.

Financial performance

For the first quarter of FY2024-25, SIAEC reported revenue of $268.7 million, a 2.6% increase year-on-year. Group expenditure rose by 2.4% to $267.7 million, mainly due to higher material and manpower costs. Consequently, the group recorded an operating profit of $1.0 million, $0.6 million higher than the same period last year.

The share of profits from associated and joint venture companies improved significantly, rising by $6.1 million to $28.0 million. Both the engine and component segment and the airframe and line maintenance segment saw year-on-year profit increases of $5.7 million and $0.4 million, respectively.

The group posted a net profit of $33.2 million for the quarter ended June 30, 2024 – an improvement of $6.2 million year-on-year. Equity attributable to owners of the parent increased by $35.7 million (+2.1%) to $1,722.8 million as of June 30, 2024 – primarily due to profits earned in the first quarter. Total assets stood at $2,138.6 million, marking a $50.3 million (+2.4%) increase from March 31, 2024.

SIAEC says its performance in the first quarter of FY2024-25 reflects the group’s resilience and strategic initiatives in navigating the post-pandemic recovery phase in the aviation industry.

READ MORE NEWS: SIA Engineering to lease hangar facilities in Subang, Malaysia