Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — H1 FY2023/24 Earnings Presentation
30 slides from Sia Engineering's earnings presentation, Nov 3, 2023
Slide 1: 1H FY2023/24 Review
1H FY2023/24 REVIEW 3 NOVEMBER 2023
Slide 2: Operational Review
» SIA ENGINEERING COMPANY OPERATIONAL REVIEW
Slide 3: Core Business
CORE BUSINESS Line Maintenance Base Maintenance Component Services Engine Services • 36 airports in 8 • 6 hangars in Singapore • 104 aircraft from 8 • CFM LEAP Quick Turn countries • 3 hangars in Philippines airlines under Inventory (QT) and Rolls-Royce Technical Management On-Wing Services • 6 comp
Slide 4: Line Maintenance
LINE MAINTENANCE Steady and Measured Improvement in Flight Activities • Number of flights handled in 1H FY23/24 increased 56% compared to a year ago • Flight recovery at the end of 1H FY23/24 was at 89%, an improvement of 10 percentage points over the half-year period • Strengthening LMI network glo
Slide 5: Base Maintenance
BASE MAINTENANCE Strong Demand Met by Capacity Creation through Lean Practices Maintenance Checks at Singapore Base • Continued strong demand for hangar checks with the increase in 1H FY23/24 1H FY22/23 flight activities and recovery of most international airlines Light Checks* 385 258 • Adoption of
Slide 6: Component Services
COMPONENT SERVICES Sustained Increase in Work Volume from Higher Flight Activities • Asia Pacific Aircraft Component Services (APACS) secured licensing rights from Honeywell for repair activities on Airbus Air Data Inertial Reference Unit (ADIRU) and Pre-Cooler Control Valve (PCCV) products • Signed
Slide 7: Engine Services
ENGINE SERVICES Steady Growth and Capability Expansion from Higher Flight Activities • Expanded On-Wing Services capabilities o Trent XWB Fan Track Liner Repair o Rolls-Royce External Gearbox replacement • Continued ramp up at Aircraft Engine Services facility • Expanded Engine Test Facility capabil
Slide 8: Key Customer Contracts
KEY CUSTOMER CONTRACTS Growth in Third-party Customers in 1H FY23/24 Line Maintenance Line Maintenance International Base Maintenance New New New (Australia) Renewed Extension of service 8
Slide 9: Strategic Partnerships Portfolio
STRATEGIC PARTNERSHIPS PORTFOLIO 24 Subsidiaries and Joint Ventures Across 8 Countries with Total Revenue of S$3.7B in 1H FY23/24 • Line maintenance JV with Cambodia Airport Investment Co., Ltd at Engine and Component Techo Takhmao International Airport in Phnom Penh, Cambodia Singapore Aero Eagle S
Slide 10: Transitioning from Transformation to Continuous Improvement
Transitioning from Transformation to Continuous Improvement Key Outcomes Innovation in Service Total Employee Operational Excellence Customer Intimacy Delivery Experience • Development of new • Time saved for customers • Reduction of laborious • High utilisation through capabilities and through digi
Slide 11: Sustainability
SUSTAINABILITY 2030 Sustainability Targets SIAEC has set targets to achieve in key sustainability areas by 2030, serving to guide development and initiatives in this decade. 2030 Targets Halve Scope 1 & 2 Emissions 15% reduction in water intensity 30% Recycling Rate (Against FY19/20 baseline) (Again
Slide 12: Financial Review
» SIA ENGINEERING COMPANY FINANCIAL REVIEW
Slide 13: Key Highlights
Key Highlights • Increase in MRO demand supported by recovery in flight activities during the period. • Group recorded a net profit of $59.3 million in 1H23/24, an improvement from net profit of $32.5 million in 1H22/23. • Operating performance returned to profit since pandemic; flights handled duri
Slide 14: Summary of 1H23/24 Group Results
Group Revenue Summary of 1H23/24 Group Results 700.0 600.0 514.0 1H22/23 1H23/24 500.0 $’M 400.0 300.0 Group Operating Share of profits of JV Group Profit/(Loss) 200.0 362.2 Profit/(Loss) & Assoc after tax 100.0 0.0 Group +151.8 Revenue 0.1 55.0 50.0 60.0 59.3 41.9% y-o-y 50.0 10.0 50.0 0.0 45.0 4
Slide 15: Analysis of 1H23/24 Group Profit
Analysis of 1H23/24 Group Profit $’M Group operating profit +10.9 +7.3 59.3 +22.0 -11.1 30.0 +8.6 26.8M 20.0 32.5 10.0 0.0 Wage support 1H22/23 Operating Performance impact Share of Non-operating items, taxation 1H23/24 profits & NCI 15
Slide 16: Analysis of 1H23/24 Group Revenue
Analysis of 1H23/24 Group Revenue Group Revenue $M $115.4M 700.0 600.0 514.0 500.0 433.8 400.0 362.2 302.6 300.0 263.5 223.0 220.0 +$151.8M $514.0M 200.0 41.9% 100.0 0.0 1H20/21 2H20/21 1H21/22 2H21/22 1H22/23 2H22/23 1H23/24 $398.6M Airframe overhaul and line maintenance Engine and component 35
Slide 17: Analysis of 1H23/24 Group Expenditure
Analysis of 1H23/24 Group Expenditure $52.5M $32.0M Group Expenditure $M $66.9M 700 $82.9M 600 513.9 500 449.3 373.0 400 513.9 317.7 270.2 +$140.9M 300 250.2 217.8 37.8% 200 100 0 1H20/21 2H20/21 1H21/22 2H21/22 1H22/23 2H22/23 1H23/24 $279.6M Staff costs Material costs Subcontract costs Depreciat
Slide 18: Breakdown of 1H23/24 Share of Profits after tax
Breakdown of 1H23/24 Share of Profits after tax Joint Venture and Associated Companies $’M Airframe & Engine Centers Component Centers Line Maintenance +1.6 +5.2 +1.8 6.2% y-o-y 33.1% y-o-y n.m. y-o-y 27.6 26.0 20.9 15.7 1.5 (0.3) 1H22/23 1H23/24 1H22/23 1H23/24 1H22/23 1H23/24 Share of profit
Slide 19: Aggregate Revenue of SIAEC, Subsidiaries, JV and Associated Companies
Aggregate Revenue of SIAEC, Subsidiaries, JV and Associated Companies for 1H23/24 4,127.7 423.0 3,425.6 3,305.0 315.1 2,873.6 370.8 • +20.5% YoY 2,633.3 • 134% of 1H19/20 285.8 251.3 2,194.5 2,092.9 203.9 246.7 3,704.7 3,110.5 2,934.2 2,587.8 2,382.0 1,990.6 1,846.2 1H20/21 2H20/21 1H21/22 2H21/22 1
Slide 20: Group Balance Sheet and Financial Statistics
Group Balance Sheet and Financial Statistics Sep-23 Mar-23 Variance $M $M $M % Total equity 1,689.5 1,676.7 + 12.8 + 0.8 Non-current liabilities 87.9 91.1 - 3.2 - 3.5 Current liabilities 243.5 215.4 + 28.1 + 13.0 Non-current assets 1,081.2 1,031.1 + 50.1 + 4.9 Cash 593.7 633.0 - 39.3 - 6.2 Other cur
Slide 21: Interim Dividend
Interim Dividend 1H23/24 1H22/23 Variance Interim Dividend Ordinary (in cents per share) 2.0 - + 100 % Interim dividend will be paid on 29 November 2023 21
Slide 22: Outlook
» SIA ENGINEERING COMPANY OUTLOOK
Slide 23: 1H FY23/24 At a Glance
1H FY23/24 At a Glance 56% Increase in Pressing Ahead with Executing our Core Flights Handled Against Continuous Improvement Strategies 1H FY22/23 Flight recovery at 89% Strengthening our core Further expansion overseas as at Sep-23 businesses by improving our and increasing our competitiveness and
Slide 24: Flight Activity
Flight Activity Approaching Full Recovery 100.0% 1H 2H 1Q 2Q FY22/23 FY22/23 FY23/24 FY22/23 90.0% 80.0% 79% 87% 89% Total Flights 70.0% handled by SIAEC 63% Line Maintenance (% of pre-Covid 60.0% levels) 50.0% 38% 40.0% 30.0% 20.0% Flight Volume (1H FY22/23) Flight Volume (2H FY22/23) Flight Volume
Slide 25: Challenges
Challenges Macroeconomic factors - Geopolitical tensions and supply chain disruptions - Inflation and increased costs - High interest rates - Continued risk of global recession Wage pressures - Escalating cost of living putting upward pressure on wages Resource Constraints - Competition from regiona
Slide 26: Priorities
Priorities Our immediate needs Remaining vigilant and prudent in Ramp up recruitment in preparation for managing increase in costs growth beyond recovery Seeking investment opportunities for growth development 26
Slide 27: Strategic Pathways for Growth
Strategic Pathways for Growth Gearing Up for Growth • Establish hangars regionally and expand LMI Expand overseas and increase network presence in new markets • Set up component capabilities in lower operating cost environment Invest in new capabilities on new • Deepen Collaboration with SIA Group a
Slide 28: Growth Opportunities
Growth Opportunities Executing our strategies Line Maintenance Base Maintenance Component Services Engine Services • Expand scope of services • Expand Base Maintenance • JV agreement with Eaton • Commenced LEAP-1A beyond transit handling footprint overseas with the to form component MRO engines test
Slide 29: Awards & Accolades
Awards & Accolades • MRO Asia-Pacific Awards 2023 • SkillsFuture Employer Awards • Talent Management (Silver) and “Innovation of the Year” by Aviation 2023 (Silver) by SkillsFuture SG Learning and Development with Week Network Coaching and Mentoring (Silver) by • Presented by the President of the Si
Slide 30: Thank you
SIA ENGINEERING cOmPANY Thank you SIA ENGINEERING Company %
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