SIA Engineering Company

[MOV]

I'm surprised they are paying dividends. There is hardly any business for aerospace MRO activities and the prudent thing to do is to conserve cash.

Sent from my CPH1917 using Tapatalk

Not surprising at all to me! 

With total cash of $520m and negligible debt, SIAEC is well-positioned to ride out this unprecedented crisis much better than its key customer (SIA) and weaker sibling (SATS). It is now trading at $1.80, near to its all time lows during GFC and slight premium to book value of $1.45.

I guess the company is cognizant of paying out dividends based on last financial year's revenues (rightly so to the delight of loyal shareholders) and with the financial strength of its key customer bolstered by the recent rights issue with strong support by Temasek. The parent also probably need pocket $$ from the child regularly   .

The impact to line maintenance revenue is expected as guided by key customers. Even when planes are parked, they need to be maintained regularly whether it is parked at Changi (173 planes) or Alice Springs (17), assuming only 10 planes out of 200 are operational.  There are regular checks and operational servicing to be done to make sure that all the planes are ready to fly again swiftly once demand returns. Domestic passenger travel is already increasing with the lifting of lock-down status by many countries.....hopefully international travel follows sooner than later. Cargo flights remain strong, in fact even increasing.

(Take a look at Etihad: https://twitter.com/etihad/status/124863...39936?s=20)

Hope to redeem my KrisFlyer miles soon by end of the year   !