SIA Engineering is running out of reasons to be optimistic, say analysts

Five consecutive quarters of earnings decline threaten to continue.

The integrated engineering firm has been seeing some bright spots lately, with operating expenditures on a decline. However, analysts say even this silver lining might not be around for too long.

According to analysts from UOB Kay Hian, the declining opex may not continue its downtrend in the coming quarters, as the operating environment becomes more hostile.

“While maintenance work will eventually pick up as airlines add more capacity, we believe the surge in hangar capacity in the Asia Pacific region will curtail SIAEC’s top-line growth for several years,” UOB Kay Hian said.

Still, UOB Kay Hian says SIA Engineering can still cling to a lone bright spot in its line maintenance in the near term.

However, analysts warn that line maintenance is dependent on visitor and flight arrivals, which are as fickle as they come.