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Public company info - Hong Kong Aircraft Engineering Co. Ltd. , 00044.HK
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Hong Kong Aircraft Engineering Co. Ltd., 00044.HK - Company Profile
Chairman SWIRE, Merlin Bingham
Share Issued (share) 166,000,000
Par Currency
Par Value 0.0
Industry Airline Services
Corporate Profile Business Summary: The Group is engaged in commercial aircraft overhaul, modification and maintenance mainly in Hong Kong and Mainland China. Performance for the year: The HAECO Group overall reported an attributable loss of HK$541 million in 2017. This compares to a profit of HK$975 million in 2016. Business Summary: In 2017, most HAECO businesses did well but those businesses in America continued to incur losses. The HAECO Group overall reported an attributable loss of HK$541 million in 2017. This loss included an impairment charge of HK$625 million in respect of the goodwill attributable to HAECO USA Holdings, Inc. (“HAECO Americas”) and a write off of HK$249 million in respect of HAECO Americas’ net deferred tax assets. This compares with a profit of HK$975 million in 2016, which included a gain of HK$805 million on disposal of the interest of Hong Kong Aero Engine Services Limited (“HAESL”) in Singapore Aero Engine Services Pte. Limited (“SAESL”) and an impairment charge of HK$285 million in respect of the goodwill attributable to HAECO Americas. Disregarding the impairment charges in both years, the net deferred tax asset write off in 2017 and the gain on disposal in 2016, the HAECO Group made an attributable profit of HK$340 million in 2017, compared with an attributable profit of HK$516 million in 2016. The Directors have declared a second interim dividend of HK$0.50 per share for the year ended 31st December 2017. Together with the first interim dividend of HK$0.53 per share paid on 19th September 2017, this results in total dividends for the year of HK$1.03 per share and represents a total distribution of HK$171 million. The second interim dividend, which totals HK$83 million (2016: HK$153 million), will be paid on 24th April 2018 to shareholders on the register at the close of business on 29th March 2018. Shares of the Company will be traded ex-dividend as from Tuesday, 27th March 2018. More airframe and line services work was done by the Group in Hong Kong and in Xiamen in 2017. Line services results benefited from increased aircraft movements. The increase in airframe services work reflected higher demand and the deferral of some customers’ work from 2016. In America less airframe services work was done, reflecting the completion of some significant aircraft and cabin modification programmes in 2016 and the loss of significant work from a major customer from August 2017. Line services work had been discontinued in America in 2016. Revenue from cabin and seat work increased in 2017. More seats were sold, but there were fewer interior reconfigurations and fewer Panasonic communication equipment installation kits were delivered. A larger number of engines were repaired and overhauled in 2017 than in 2016, and more work was done per engine. More components and avionics maintenance manhours were sold during the year. The Group’s inventory technical management subsidiary (HAECO ITM Limited) benefited from the loan of more aircraft parts and more repair work. The Group continued to invest in order to increase the scale of operations and technical capabilities and to improve and widen the range of services it can offer to customers. Total capital expenditure for 2017 was HK$843 million. Capital expenditure committed at the end of the year was HK$887 million. Prospects: The prospects for the Group’s different businesses in 2018 are satisfactory. More engines are expected to be repaired and overhauled. The component and avionics overhaul business is expected to improve gradually, with the development of new capabilities. Demand for line services is expected to be firm. Demand for airframe services is expected to be roughly similar to that of 2017, with little change in Hong Kong and Xiamen, and an increase in America. The number and mix of seats sold are expected to be similar to those in 2017. Forward bookings for cabin integration work are low. Significantly less Panasonic communication equipment work is expected. Airframe services results will depend on the outcome of efforts to improve efficiency and work flow in America. We expect to realise some of the benefits of this work in 2018. The relocation proposed by the Xiamen municipal government of the Gaoqi airport to a new airport in the Xiang’an district remains subject to central government approval. Management maintains regular communications with the local authorities about the new airport and its opening, which will be material to the operations of the HAECO Group in Xiamen. The commitment and hard work of employees of the Company and its subsidiary and joint venture companies are central to our continuing success. On behalf of the Directors, I would like to take this opportunity to thank them for their continued dedication and commitment to aviation safety.

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