SIA Engineering Company (SIAEC) registered an 8.5% YoY fall in revenue to S$251.3m in 2QFY19, mainly due to lower airframe and fleet management revenue. Operating profit was 43.8% lower at S$11.3m while share of profits of associates/JVs rose 31% to S$30.0m.

Net profit was 1.6% YoY lower at S$38.0m in the quarter, bringing 1HFY19 net profit to S$78.5m (+4.2%) or 45% of our full year figure. We judge this to be slightly below our expectations.

The group has declared an interim dividend of S$0.03/share which is lower than last year’s S$0.04/share. Pending an analyst briefing, we put our Buy rating and fair value estimate of S$3.70 under review.

Source: OCBC Research - 9 Nov 2018