SIA Engineering raises dividend as ‘robust’ demand drives H2 earnings up 20.9%

[SINGAPORE] SIA Engineering Company ( SIAEC ) posted a 20.9 per cent year-on-year rise in net profit to S$85.6 million for the six months ended Mar 31.This came on the back of a 3.7 per cent increase in revenue to S$693.9 million, said the Singapore-listed aircraft maintenance provider on Monday (May 11).Its board proposed a final dividend of S$0.085 a share, up from S$0.07 a share a year earlier. This will be paid out on Aug 14, subject to shareholders’ approval at its annual general meeting on Jul 23.The final dividend brings SIAEC’s total dividend payout for FY2026 to S$0.11 a share, up from S$0.09 a share the previous year.For the full year, the group saw “robust demand” for maintenance, repair and overhaul (MRO) services with the continued rise in air travel and passenger traffic, driving revenue up 14.3 per cent to S$1.4 billion.“Revenue rose from a combination of higher labour rates, higher flight volumes, increase in maintenance activity, heavier aircraft check content and more engines and components delivered,” SIAEC said.Navigate Asia ina new global orderGet the insights delivered to your inbox.Full-year net profit came in at S$168.9 million, up 21 per cent from FY2025.SIAEC’s associated and joint venture companies benefited from “strong demand”; the group booked a 22.5 per cent rise in share of profits to S$145.3 million.Profits from the engine and component segment also rose by 23.1 per cent to $139.2 million, thanks to higher engine shipments and improved margins.SEE ALSOMarket ‘underestimating’ fuel impact on aviation sector: DBSThat said, group expenses were up 13.2 per cent, due to set-up costs for two new subsidiaries and higher costs for manpower, material, outhouse repair and IT system implementation.The company also recorded a S$4 million impairment provision for an underperforming long-term contract.Cautious outlookLooking ahead, SIAEC is focused on expanding in Asia-Pacific markets such as China. For instance, a new joint venture will perform line maintenance and ground services at airports in Xiamen, Fuzhou, Wuyishan and Longyan.The group also plans to enhance MRO capabilities for next-generation aircraft, and strengthen core services for operational resilience and competitiveness.However, SIAEC is cautious about the impact of the ongoing Middle East war. The evolving situation, it said, has “introduced greater uncertainty, as flight route adjustments, rescheduling and cancellations present business risks for the group”.“Ongoing industry challenges, including supply chain disruptions and inflationary pressures, could be further exacerbated if geopolitical issues are heightened.”SIAEC believes that the near-term impact on MRO demand will be “moderate”; it plans to “maintain a disciplined approach to cost management” with rising energy costs.Shares of SIAEC ended Monday at S$3.18, down 2.5 per cent or S$0.08, before the news.Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.