Net profit at Hong Kong Aircraft Engineering Co. (HAECO) grew 110% year-on-year in 2016, with the MRO posting HK$975 million ($125 million) for the 12 months up to Dec. 31, 2016 compared to 2015’s HK$464 million ($59.7 million) haul.
The annual figure was boosted by the Hong Kong Aircraft Engineering (HAESL) business divesting its stake in Singapore Aero Engine Services (SAESL) in June 2016, a move which saw a HK$805 million ($103 million) HAECO gain.
Taking away HAECO’s gain from the SAESL disposal, coupled with a HK$285 million ($36.6 million) impairment charge related to the 2015 acquisition of TIMCO Aviation Services, the group’s 2016 attributable profit was 8.2% higher than in 2015 at HK$516 million ($66.4 million).
HAESL and its China-based businesses HAECO Xiamen and TEXL all reported profits, with the latter achieving the distinction of growing profit despite selling less man hour work.
More negatively however was the continuing underperformance of the HAECO Americas division, which posted a higher loss in 2016 totalling HK$238 million ($30.6 million).
According to its financial statement, this was due to losses on seat contracts along with a reduced number of seats sold by its manufacturing arm and less cabin integration work. Despite improved airframe services and more man-hours sold, these positives were offset by costs emanating from efficiency and work flow drive
The U.S. arm of the company has realigned its focus in the past year by offloading the majority of its line maintenance activities across the country.
Announced in October 2016, it confirmed MRO services and cabin solutions would be the focal point of its work in North America. Florida-based STS Aviation bought up many of the line station locations.
For its parent company, 2017 could prove equally uncertain, with HAECO chairman John Slosar suggesting this year could be mixed for the maintenance and engineering specialist’s prospects.
In a statement released on Tuesday (Mar. 14), Slosar said that HAECO Americas and HAECO Xiamen are both expected to grow their airframe services work, but this may not prove as fruitful for HAESL, with some customers expected to defer work. Gradual improvements are anticipated however in avionics and components work.
The HAECO Landing Gear Services unit is expected to carry out more work in 2017, but warned of more losses this year.