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June 2016

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SIAEC Group recorded a profit attributable to the owners of the parent company of $176.6 million for the financial year ending 31 March 2016, $6.7 million or 3.7% lower than the previous year. Revenue fell by 0.7%, from $1,120.6 million to $1,112.7 million. The decrease in airframe and component overhaul revenue was mitigated by higher line maintenance and fleet management revenue. Expenditure fell at a higher rate of 2.7%, or $28.3 million, to $1,008.3 million, in spite of a $12.7 million exchange loss incurred compared to the $4.8 million exchange gain in the previous year. Subcontract and staff costs registered the biggest decreases.

 

With expenditure decreasing at a higher rate than revenue, operating profit increased $20.4 million or 24.3% to $104.4 million. Share of profits from associated and joint venture companies at $94.2 million saw a decrease of $12.1 million or 11.4%. Contributions from the engine repair and overhaul centres at $50.7 million were reduced by $16.9 million or 25%, mainly due to lower work content on the engines serviced by Singapore Aero Engine Services Pte Ltd.

 

The Group recognised a $4.3 million loss on the closure of an associated company, and made a $2.5 million provision for impairment for another associated company. In addition, SIAEC Group recorded a $2.8 million surplus on the partial disposal of an associated company during the year, compared to a $5.8 million gain recognised from the restructuring of one of its subsidiaries in the previous year.

 

The Group posted a profit attributable to owners of the parent of $41.4 million for the fourth quarter ended 31 March 2016, flat compared to the same period last year. Revenue rose by $18.2 million or 6.6% to $294.2 million, with contributions from all the business units, particularly from line maintenance and fleet management. Expenditure increased $13.8 million or 5.5% to $266.7 million, with an increase in material costs, and an exchange loss of $8.2 million compared to a $1.6 million exchange gain in the corresponding quarter last year. This was partially mitigated by decreases in other expenses. As a result, operating profit grew by $4.4 million, or 19%, to $27.5 million.

 

Share of profits from associated and JV companies was $18.3 million, $3 million or 14.1% lower than the same quarter last year, with a $4.7 million or 36.4% decrease in contributions from the engine repair and overhaul centres to $8.2 million.

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ST Aerospace has injected its pro rata share of $24.5 million as additional capital into its Guangzhou-based airframe MRO JV company, ST Aerospace (Guangzhou) Aviation Services Company Ltd. This additional funding will support the JV’s expansion and business growth. Upon injection of the funds, ST Aerospace’s total share capital in ST Aerospace (Guangzhou) Aviation Services stands at $44.1 million. Operating out of the Guangzhou Baiyun International Airport since March 2014, ST Aerospace (Guangzhou) Aviation Services is a 49:51 JV between ST Aerospace and Guangdong Airport Authority, focusing on commercial airframe maintenance and modification services for a wide range of Airbus and Boeing aircraft.

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