Hong Kong Aircraft Engineering Company (HAECO) has reported a 68.7% fall in profit for the first half of 2017.
The company posted results of HK$348 million ($44.4 million) in H1, down from HK$1.1 billion in the same period last year. 2016’s H1 results included a HK$805 million gain after the divestment of its Hong Kong Aero Engine Services in Singapore Aero Engine Services.
However, HAECO fared better in its half-year revenues, which totalled HK$ 7.4 billion, a year-on-year increase of 4.3%.
In HAECO’s joint ventures businesses, its HAECO Hong Kong division carried out more airframe and line services work than in H1 2016, a fact which HAECO said reflects higher demand and some customer deferral work from last year.
Fully-owned subsidiary HAECO Americas, which divested its line maintenance stations in the U.S. last year, recorded a higher loss in the first half of 2017 than in the first half of 2016.
According to the group, this reflected lower demand for airframe services, low margins on seats sold and the completion of fewer interior reconfigurations.
Meanwhile, its China-based Taikoo (Xiamen) Aircraft Engineering Company (HAECO Xiamen) business, which the group holds a 58.55% share in, saw revenues surpass HK$1 billion, improving on last year’s HK$835 million.
The increase was attributed to more engine performance restorations and more component repair work.
In a chairman’s letter released alongside the results on Aug. 15, John Slosar stated that overall, the HAECO Group’s adjusted profit for 2017 is expected to be below that of 2016, with decreased demand across many of its JV businesses anticipated in the second half of this year.