As widely expected, Singapore Technologies Aerospace (STAe) managed to take the edge off its record first-half losses with a modest profit in the second half of the year.
The group lost nearly S$49 million ($35 million) in the first six months of 1995, but avoided further damage by staying just above break-even in the second half. The result follows a loss of S$25 million in 1994.
STAe president Boon Swan Foo says that the result was helped by an improvement at the core SASCO aviation-services business, which benefited from the beginnings of a recover in the civil-maintenance market.
SASCO has improved its margins by refocusing its efforts on the higher-yield European and North American markets. Other factors have included some S$4 million in cost savings and the restructuring of company loans.
The company warns that, while work rates have settled to around $44 an hour and that demand picked up towards the end of the year, the outlook "...remains fragile for 1996".
STAe's defence business, which is estimated to account for some 45% of its S$480 million turnover, continued to be troubled by diminishing margins. The company admits that its performance was "substantially worse" than in the previous year.
"The emphasis has now got to be on the military side," says DBS Securities analyst Howe Leong Sen. "They've got to look at the entire operation and the factors that are affecting them in overall poor margins on work."
Source: Flight International