HAECO's profits climbed 6.7% to HK$876m

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The HAECO Group reported an attributable profit of HK$876 million in 2012, 6.7% higher than that of HK$821 million in 2011. Earnings per share increased by 6.7% to HK$5.27. 

Demand for HAECO’s airframe maintenance and line maintenance in Hong Kong was strong in 2012, although there were fewer cargo flights for which to undertake line maintenance. 4.6% more aircraft movements were handled in 2012 than in 2011.

HAECO was not able to meet the demand for airframe maintenance in the second half of 2012 because of a shortage of skilled and semi-skilled labour. 1.3% fewer manhours were sold by HAECO for airframe maintenance in 2012 than in 2011.

Results from Taikoo Aircraft Engineering Company Limited were adversely affected by exchange rate and deferred tax movements. Hong Kong Aero Engine Services Limited and Singapore Aero Engine Services Pte. Limited did well in 2012, with stronger than expected demand for engine overhaul services.

The Group’s joint ventures in Mainland China continued to develop technical capabilities. Output was higher, but losses continued to be incurred because of under-utilisation of facilities. 

The Group continued to invest in facility expansion and technical capabilities in Hong Kong and Mainland China in order to improve and widen the range of aircraft engineering services provided to customers.

Total capital expenditure for 2012 was HK$364 million with a further HK$482 million committed at the end of the year.

In November 2012, HAECO and Cathay Pacific Airways Limited  formed a joint venture to undertake inventory technical management for Cathay Pacific, Hong Kong Dragon Airlines Limited and other airlines.

During the year, TAECO started work on its first Airbus corporate jet cabin completion. Taikoo Engine Services (Xiamen) Company Limited completed six performance restorations on GE90-115B engines.

The Group’s interest in a line maintenance provider in Shanghai has increased from 49% to 75%. There was a fire at the premises of Taikoo (Xiamen) Landing Gear Services Company Limited  in November 2012.

No work has been done at the premises since then and the recovery of operations is likely to take more than nine months; provisions for impairment and other losses, net of insurance receivables, of HK$4 million, have been recognised.