(13-11-2014, 02:37 PM)corydorus Wrote: [ -> ]If we look at the lower rev, this is catered for by lower staff cost.
What's really hits them is the sub-contract cost. what are they and why is it so ?
33.9 M Q2 2013/14
52.0 M Q2 2014/15
Anyone has insights ?
From annual report and quarterly reports, I understand that these are cost that are incurred by the Company for services that cannot be performed and needs to be subcontract to OEMs or vendors. There are two possibilities:
1) SIAEC is just acting as middle-man between customers and their vendors, which resulted in a spike in contracts being outsourced. Are there insufficient capacity within SIAEC to fulfill contract obligations?
2) SIAEC relies on more subcontract workers to produce the same level of output as before (likely due to labour intensive nature of such business). This can be due to a decline in productivity of its workers, which incidentally, SIAEC is trying to boost up the productivity of its workforce in the latest quarterly report.
Announcement Of Appointment Of Chief Executive Officer :
Mr William Tan Retires As CEO Of SIA Engineering Company, Mr Png Kim Chiang will succeed Mr William Tan as CEO.
The Board has decided that
Mr Png Kim Chiang will succeed Mr William Tan Seng Koon as Chief Executive Officer of the Company when the latter retires on 1 April 2015.
Mr Png Kim Chiang is currently the Executive Vice President (Operations) of SIAEC. He joined Singapore Airlines (SIA) in 1975 and has had 40 years of experience in the aerospace industry. He had served in various senior management positions in SIA and was appointed Senior Vice President (Services) of SIAEC in 2001. In 2005 and 2009, Mr Png was appointed Senior Vice President (Commercial) and Senior Vice President (Aircraft and Component Services) respectively. Since 2010, following his appointment as Executive Vice President (Operations), Mr Png has been overseeing the operations of Aircraft and Component Services, Line Maintenance and Fleet Management, as well as the support services of Marketing, Information Technology, Engineering, Quality, Safety and Facilities Development.
http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com
SIA Engineering saw a 6.5 percent decline in turnover to $265.3 million for the third quarter ended 31 December 2014, as work content was lower with fewer heavy checks. Despite a 6.8 percent reduction in operating expenses, earnings was down 23.5 percent to $46.3 million as a result of lower contributions from the company’s joint venture and associate companies. For the nine months, revenue was down 2.6 percent to $844.6 million and earnings dropped 29.2 percent to $141.9 million.
lousy results... earnings fell 30%
think its no longer a defensive stock
so volatile ........
Trading at over 24X PE (TTM) and 3.5% dividend yield. Over priced.
(13-05-2015, 11:15 AM)specuvestor Wrote: [ -> ]^^ As per what we discussed 6 months ago:
http://www.valuebuddies.com/thread-3-pos...l#pid99289
Does csl123 or other VBs has any insight on what was impact of SIA woes and on-wing maintenance (which is the JV)?
I think the business fundamentals remains the same and it is unlikely going to change in the mid term. I think the strategies for the company is to
1) Acquire companies using a combination of share swap/debt. The stock is trading at high PEs.
2) Cut its cost structure through a reduction of benefits, staff retrenchment.
3) Improve productivity through business process re-engineering.
I do not think SIA is in trouble, since it is given a life line by low oil prices. I think profit for the next year will be very good, likely to be one of the best in the past ten years.
The management is of different competency , so rather expected.
(13-05-2015, 10:07 PM)csl123 Wrote: [ -> ] (13-05-2015, 11:15 AM)specuvestor Wrote: [ -> ]^^ As per what we discussed 6 months ago:
http://www.valuebuddies.com/thread-3-pos...l#pid99289
Does csl123 or other VBs has any insight on what was impact of SIA woes and on-wing maintenance (which is the JV)?
I think the business fundamentals remains the same and it is unlikely going to change in the mid term. I think the strategies for the company is to
1) Acquire companies using a combination of share swap/debt. The stock is trading at high PEs.
2) Cut its cost structure through a reduction of benefits, staff retrenchment.
3) Improve productivity through business process re-engineering.
I do not think SIA is in trouble, since it is given a life line by low oil prices. I think profit for the next year will be very good, likely to be one of the best in the past ten years.
Hi csl
Actually I am more keen on the Ex-post analysis on whether the on-wing maintenance that we discussed was really hitting their earnings or just unsubstantiated concern.
As discussed in the SIA thread, SIA has been in trouble for the past few years from branding to positioning to TigerAir. Oil price is not something they can control but competitive advantage is. And their moat has more or less been eroded away. Ironically focusing on cost cutting can't build a moat in a service industry