SIA Engrg

SIA Engrg: FYMar11 results slightly below consensus, though div surprised positively.
Revenue and Net profit both rose 10% yoy to $1107m, $258.5m rptvly.
Line Maintenance revenue +6.3% to $401m, while Repair & Overhaul revenue +12.2% to $706.3m. This came on the back of an 11% yoy increase in flights at Changi Airport. Operating profit margin expanded to 12.3% from 11% last yr..

QoQ however, net profit decreased 17.6% due to gain on disposals of fixed assets, write-back of tax provisions and jobs credit schemes in the previous quarter.
Main surprise was full year div of $0.30 ($0.14 final + $0.10 special + $0.06 interim paid earlier), which represents a yield of 7.0%, higher than consensus estimates of 4.5%. This was likely motivated by a peak net cash balance of $581m, which increased 36.5% yoy...

Mgt expects demand for their services to be sustained and contributions from their JVs to increase. Notes prevailing economic conditions and weak US dollar are possible challenges. SIE however, lags the airline industry and could be impacted by events in Japan as well as higher fuel prices.