Core FY09 revenue S$1.05bn — FY09 topline revenue grew 4%yoy (4Q09: S$246m, +9%qoq) with higher contributions from line maintenance, FMP, and a one-off maintenance project offsetting weakness in airframe/component overhaul. Expenses rose by 3%yoy on higher overheads and subcontract costs despite 2% fall in staff and materials costs. Operating profit rose by 9%yoy to S$113m, as operating margin improved by 60bps to 10.8%.

Associates/JVs +3.5%yoy — 4Q09 contribution from AJVs rose 29%yoy to S$48m, or 62% of the group’s PBT (4Q08: 58%). For FY09, AJVs contributed S$173m (+9.6%yoy) on robust growth from engine overhaul (S$108m, +20%yoy) while other JVs registered a dip in profit (S$65m, - 4%yoy). External work (non-SIA) accounted for about 70% of revenue from AJVs.

FY09 total DPS S$0.16 (FY08: S$0.20) — Lower dividend of S$0.16 equates to 66% payout ratio (FY08: 85%), and reflected a more prudent and conservative stance given weak outlook for FY09/10, with possibility of further deterioration. As of Mar-09, the group had net cash of S$373m or S$0.35/shr.

Key initiatives against challenging environment — [a] Expansion of fleet under FMP (Mar-09: 175 vs Mar-08: 109); [b] Geographical expansion (Philippines, Vietnam, LA); [c] Securing “first-mover” advantage with new products (eg. First to maintain A380, cabin modifications for A340, B747- 400 VVIP); [d] Cost controls including hiring freeze since mid-08, voluntary no-pay leave scheme, management wage freeze from May-09, and release of surplus contract staff.