It’s not yet time for SIA Engineering to celebrate, analysts say

The MRO industry is still marred with instability.

SIA Engineering isn’t popping the champagne just yet, and for a good reason. The firm remains pessimistic about its outlook, as conditions in the MRO industry remains the same beast.

According to analysts from Maybank Kim Eng, though its earnings of $29m was the best in seven quarters due to higher fleet management, line maintenance revenue, and good cost control, lower workload for its engine shops remain a concern.

Meanwhile, Maybank Kim Eng adds that SIA Engineering may be getting a slight push from the completion of the restructuring of its JVs with Rolls-Royce.

“The restructuring of its joint ventures with Rolls-Royce should be completed by 4Q16 and the company will gain cash proceeds of SGD201.9m (note). Over the quarter, the company utilised SGD4.3m to purchase 1.2m worth of shares in the open market following the announcement,” Maybank Kim Eng said.