HONG KONG Aircraft Engineering Co (HAECO) has announced a 15.2 per cent rise in profits to $447 million for last year, much in line with market expectations. Earnings rose to $2.41 cents a share and directors have proposed paying an increased final dividend of 71 cents a share. This brings the total dividend for the year to $1.01 a share, an 11 per cent increase over 1992. Despite Hong Kong's high inflation, HAECO managed to widen its profit margins through cost-cutting and productivity improvements. HAECO's success in improving margins took the market by surprise, said HG Asia analyst Tim Storey. However, he said, this was compensated for by a higher-than-expected tax payment for the year. The tax bill jumped 42 per cent over 1992 to $92.7 million, whileturnover rose 10 per cent to $2.3 billion. Eisha Cheng, an analyst with Lehman Brothers, put this down to increased line maintenance on Cathay Pacific's Airways' fleet - flight hours jumped about 17 per cent last year. Non-scheduled work for Cathay included heavy maintenance and modification on five TriStars and refurbishment of eight Boeing 747s. In fact, Cathay contributed about 65 per cent of HAECO's total profits. HAECO chairman Peter Sutch said the company's airframe maintenance facilities had been well used with a high percentage of comprehensive maintenance contracts. Lehman Brothers, however, estimated average man-hour rates were down about 25 per cent for third-party heavy maintenance. As for the year ahead, Mr Sutch said: ''It is expected that the number of aircraft movements handled by the company at Kai Tak will increase and that overhaul division workloads will remain at current levels. ''Despite the over-capacity that currently exists in the world airframe maintenance market, the company is confident that it will be able to secure a good level of work during 1994.'' However, he added: ''The company, which is competing in an international arena, remains concerned over the high level of inflation in Hong Kong and is continuing in its drive for both productivity and quality improvements.''