Singapore’s SIA Engineering said Tuesday (4 May) that it posted a net loss of S$11.2 million for the financial year ended 31 March 2021, compared to a profit of $193.8 million in the previous year. The company reported group revenue of S$443 million for the financial, a decline of S$551.1 million (-55.4 percent) lower than in the previous financial year as low flight activities and widespread grounding of aircraft resulted in a sharp and severe reduction in business volume. Group expenditure was also lower year-on-year, falling from S$926.4 million to S$468.0 million (-49.5 percent), due to grants from government support schemes and cost-saving measures. Staff costs and subcontract costs fell due to actions taken to match manpower requirements to lower business volume. Government wage support resulted in a further reduction in manpower costs. Non-manpower related costs fell due to tight control over expenses and deferment of non-critical expenses.
“The adverse impact of COVID-19 on the aerospace industry also resulted in provisions being made for impairment of asset values during the financial year, the most significant being a S$35 million impairment provision made on Base Maintenance unit’s assets and an S$11.4 million impairment provision on the investment in an engine programme,” the company said in announcing the results.
The start of the financial year saw the most severe impact of the COVID-19 pandemic on flight activities with a record low number of flights handled in April and May 2020, the company said. Since then, the number of flights handled has been recovering, albeit at a slow pace. All business segments were gravely affected throughout the financial year.
For the financial year FY2020-21, the total number of flights handled by the Line Maintenance unit in Singapore was only 18.5 percent of the flights handled in the previous year. At Base Maintenance, fewer aircraft maintenance checks were performed as low flight activities and the grounding of aircraft by airlines resulted in the extension of maintenance intervals and hence lower base maintenance activities. Work volume for our fleet management business and engine and component joint venture companies also fell sharply as a result of low flight hours.
The company said with the progressive cutting of government support, cost management remains a high priority. “We have maintained measures taken earlier to mitigate manpower surpluses and manage operating cost, and will continue to be prudent with capital expenditure, without losing focus on opportunities to invest in capability and capacity expansion to lay the foundation for future recovery and growth,” the company said.