SIA Engineering: Back on Track with Strong Earnings Growth
SIA Engineering Company (SGX: S59) has delivered a solid financial performance for its third quarter of FY2024/2025, demonstrating a strong recovery despite industry challenges.
Revenue grew 11.3% year-on-year to S$324.8 million, driven by an 8.4% year-on-year increase in flights handled in Singapore. In December 2024, the number of flights handled exceeded pre-pandemic levels seen in December 2019, marking a significant milestone for the aviation services provider.
More importantly, SIAEC swung back to profitability, reporting an operating profit of S$4.7 million, a sharp turnaround from the S$3.4 million operating loss recorded in the same quarter last year. The improvement was supported by higher output from its engine and component repair units, which helped offset persistent supply chain disruptions.
The company’s joint venture and associate contributions jumped 35% year-on-year to S$32.2 million, mainly due to strong performance in engine maintenance services. As a result, net profit surged 42% year on year to S$38.2 million, demonstrating that SIAEC’s turnaround strategy is yielding results.
Looking ahead, SIAEC remains cautious about rising costs, supply chain issues, and a tight labor market. To address these concerns, the company is rolling out a new Enterprise Operating System to enhance efficiency while expanding its operational capabilities.
ThaiBev: Beer Business Booms, But Liquor Sales Lag
Thai Beverage (SGX: Y92) had a mixed performance in its latest financial results for 1Q 2025, with total revenue increasing by 2.4% year on year to 92.3 billion baht. However, earnings before interest, taxes, depreciation, and amortisation (EBITDA) saw a slight dip of 0.8% year on year, reflecting uneven performance across its business segments.
- Beer business: The highlight of the quarter, as sales jumped 8% year on year to 36.1 billion baht, supported by an 11.8% year-on-year surge in sales volume. EBITDA for the beer segment also grew by 16.6% year on year, showing strong demand.
- Non-alcoholic beverages: Another bright spot, with revenue climbing 7.2% year on year and EBITDA rising by 15.6% year on year for 1Q 2025.
- Spirits business: The division is facing headwinds, with revenue declining 4.8% year on year to 32.2 billion baht, as consumer demand softened. EBITDA for liquor fell 12% year on year, reflecting increased competition and shifting preferences.
- Food business: A mixed bag, with revenue up 2.2% year on year. However, EBITDA plunged 55% year on year, signaling potential cost pressures or weaker margins.
Overall, ThaiBev’s results reflect a shift in consumer behavior—beer and non-alcoholic drinks are thriving, while the liquor and food segments face pressure. Moving forward, the company’s ability to adapt to changing demand trends will be key to sustaining growth.
UOI: Profit Takes a Hit Amid Rising Claims, But Investment Income Shines
United Overseas Insurance (SGX: U13) reported a 9.8% year-on-year drop in net profit for the second half of 2024, down to S$15.6 million, as the insurer grappled with higher claims and increased operating expenses.
On the bright side, UOI’s insurance service revenue rose by S$14.5 million, thanks to business optimisation and higher contractual service margin releases.
However, this was outweighed by a spike in insurance service expenses, which surged to S$32.9 million, up from S$10.8 million a year ago, mainly due to higher claims.
Despite these challenges, net expenses from reinsurance contracts fell by S$4.0 million, providing some relief. Non-underwriting income also improved to S$6.6 million, boosted by higher interest income from fixed deposits and increased dividend payouts from investments.
A key positive for UOI was the S$11.4 million unrealised profit from other comprehensive income, attributed to resilient financial markets and the recent interest rate cuts in the latter half of 2024.
While the insurer faces near-term profitability challenges due to rising claims, its strong investment portfolio and disciplined underwriting approach should help it navigate uncertainties ahead.
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Disclosure : Joanna Sng doesn’t own shares of any of the abovementioned companies.
