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September 2015

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Cyient Ltd has announced the acquisition of Global Services Engineering Asia, based in Singapore, from Pratt & Whitney Services. This site provides repairs, development and validation for aero gas turbine engine components in support of Pratt & Whitney throughout the region.

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The HAECO Group reported an attributable profit of HK$254 million for the first half of 2015. This compares to a profit of HK$283 million for the same period in 2014. Revenue increased by 7.4% to HK$5,734 million.

 

 

Performance for line maintenance services of HAECO in Hong Kong was good. More extensive work scopes were conducted per aircraft which generated higher workload and revenue for the first half of 2015. More airframe services work was done. Capacity increased as the workforce grew. Component services in Hong Kong were adversely affected by the costs of capability development. HAECO ITM recorded a higher profit, reflecting higher utilisation of rotable parts as operations increased. The profits of Hong Kong Aero Engine Services Ltd (HAESL) decreased. Fewer engines were overhauled, reflecting the retirement of aircraft operating Trent 500 engines and a reduction in the frequency of scheduled maintenance of Trent 700 engines.

 

HAECO Americas recorded a higher loss in the first half of 2015 than in 2014. The higher loss principally reflected lower airframe services operating results.

 

The profit of Taikoo (Xiamen) Aircraft Engineering Company Ltd (HAECO Xiamen) decreased. This reflected reduced demand for its airframe services. Taikoo Engine Services (Xiamen) Company Ltd (TEX) performed well, with more engines overhauled, but the absence of unutilised tax losses caused its after tax profits to fall. Taikoo (Xiamen) Landing Gear Services Company Ltd (HAECO Landing Gear Services) saw a smaller loss in the first half of 2015 than in 2014 (work was only resumed in the second quarter and results were adversely affected by impairment and other provisions arising from the fire at its premises in late 2012). Overall contribution from the Group’s other activities in mainland China improved slightly.

 

The Group continued to invest in order to expand its facilities and technical capabilities and to improve and widen the range of services it can offer to customers. Total capital expenditure during the first half of 2015 was HK$349 million. Capital expenditure committed at the end of June was just over HK$1.6 billion.

 

HAECO Hong Kong’s aircraft maintenance capacity for the longer term is expected to grow with an increase in the workforce in the second half of 2015, although there will be an associated cost of training additional staff in the short-term. The workload for line services in Hong Kong is expected to remain stable. Demand for the airframe services of HAECO Americas is expected to remain low while that of HAECO Xiamen is likely to be lower in the second half of the year. HAESL’s performance is expected to continue to be adversely affected by a continued reduction in demand for its engine overhaul services. TEXL’s engine output is expected to remain stable.

 

The municipal government of Xiamen has announced that the proposed new airport at Xiang’an will commence operations in 2020. Management maintains regular communications with the local authorities about the new airport and the consequences of its opening, which will be material for the HAECO Group’s operations at the existing airport.

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