SIA Engineering Co Ltd (SIAEC) last night reported its 3QFY12 revenue grew 12.6% YoY to an all-time quarterly high of S$303.4m and PATMI gained 5.3% to S$63.5m. Management attributed the growth in revenue to 1) higher fleet management programme revenue and 2) an increase in airframe and component overhaul work. But higher subcontract and staff costs to support the increased workload during the quarter also saw EBIT margin fall to 9.4%, from 12.8% a year ago. Despite the challenges posed by uncertainties in the global economy, management guided that demand for its services is expected to remain stable. In addition, SIAEC is estimated to provide a dividend yield of 5%. Thus, we retain our fair value of S$3.88 per share and BUY rating on SIAEC.
Strong revenue growth but lower margin.
Strong revenue growth but lower margin.
SIA Engineering Co Ltd (SIAEC) last night reported its 3QFY12 financials. 3QFY12 revenue grew 12.6% YoY to an all-time quarterly high of S$303.4m and PATMI gained 5.3% to S$63.5m. Management attributed the growth in revenue to 1) higher fleet management programme revenue and 2) an increase in airframe and component overhaul work. But higher subcontract and staff costs to support the increased workload during the quarter also saw EBIT margin fall to 9.4%, from 12.8% a year ago. In addition, SIAEC’s PATMI was once again boosted by stronger contributions from share of profits of joint venture and associated companies, which grew 20.1% to S$40.7m and contributed to 56.3% of pre-tax profit.
Raise FY12 revenue but lower PATMI estimates.
For 9MFY12, SIAEC’s revenue edged up 2.2% to S$853.4m and PATMI grew 2.6% to S$202.8m, meeting 77.4% and 73.9% of our previous full-year revenue and PATMI estimates. We have since made some minor adjustments to our full-year estimates in order to factor in stronger revenue growth and higher costs, despite management’s intention to improve productivity and manage costs. Our new estimates of FY12 revenue is 2.6% higher while PATMI is 1.7% lower, at S$1,130.5m and S$269.9m respectively.
Maintain BUY and S$3.88 fair value.
Despite the challenges posed by uncertainties in the global economy, management guided that demand for its services is expected to remain stable. In addition, the longer-term outlook for MRO service providers is still intact, and SIAEC is estimated to provide a dividend yield of 5%. Thus, we retain our fair value of S$3.88 per share and BUY rating on SIAEC.
Raise FY12 revenue but lower PATMI estimates.
For 9MFY12, SIAEC’s revenue edged up 2.2% to S$853.4m and PATMI grew 2.6% to S$202.8m, meeting 77.4% and 73.9% of our previous full-year revenue and PATMI estimates. We have since made some minor adjustments to our full-year estimates in order to factor in stronger revenue growth and higher costs, despite management’s intention to improve productivity and manage costs. Our new estimates of FY12 revenue is 2.6% higher while PATMI is 1.7% lower, at S$1,130.5m and S$269.9m respectively.
Maintain BUY and S$3.88 fair value.
Despite the challenges posed by uncertainties in the global economy, management guided that demand for its services is expected to remain stable. In addition, the longer-term outlook for MRO service providers is still intact, and SIAEC is estimated to provide a dividend yield of 5%. Thus, we retain our fair value of S$3.88 per share and BUY rating on SIAEC.
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