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Sijia Jiang

Hong Kong Aircraft Engineering Co (Haeco) reported a revenue surge of 61.5 per cent in 2014 due to its US acquisition, although net profit fell 8.3 per cent because of labour constraints and weakening demand.  
The aircraft maintenance company controlled by Swire Group reported revenue of HK$11.9 billion, up from HK$7.39 billion in 2013. Its acquisition of US-based Timco Aviation Services, now rebranded under Haeco Americas, accounted for HK$2.89 billion of that. 
Profit attributable to shareholders was HK$573 million, down from HK$625 million a year ago. 
Chief executive Augustus Tang said the company, which had been suffering from a skilled labour shortage the past few years “has greatly improved on its labour attrition problem”.
“We recruited 840 new colleagues in the past year, of which 410 were technicians…...We now have enough labour,” he said, adding Haeco Hong Kong’s airframe service capacity is expected to increase in 2015 as a result.
The company sold 2.46 million airframe service manhours in 2014, down from 2.36 million manhours in 2013.
Taikoo Engine Services (Xiamen) Company (TEXL), the company’s Xiamen-based GE engine service provider in which GE Aviation acquired a 9.9 per cent stake in November, recorded the biggest increase in both revenue and profit because of more engine overhauls.  
It contributed profit of HK$166 million, up 325.6 per cent, and revenue of HK$3.6 billion, up 68.9 per cent.
HAESL, in contrast, the company’s 45 per cent owned Hong Kong-based engine service company, recorded a 47 per cent decrease in profit. Tang said this is because of the retirement of the Airbus A340 and Boeing 747-400 aircraft,  a situation expected to persist for the next two years until the arrival of A350 with Trent XWB engines, Tang said.
“HAESL’s performance is not expected to improve until the end of 2016,” he said.
Chief financial officer Fanny Lung said she expects bigger contributions from Haeco Hong Kong in 2015 to compensate for sluggish results from HAESL. Haeco’s share of the after-tax profit of HAESL, including that derived from HAESL’s interest in Singapore-based SAESL, amounted to HK$267 million, a year-on-year decrease of 42.6 per cent.  
Haeco Americas, which provides aircraft maintenance services as well as manufacture of aircraft interior products, represented a loss of HK$45 million for the year, reflecting the cost of downsizing a  seat manufacturing factory in California and finance charges associated with the acquisition.    
The company declared a second interim dividend of HK$1.45 per share that makes the total dividends for the year HK$2.10 per share or HK$349 million in total, unchanged from 2013. 


Haeco revenue flies on US acquisition; but profits slide on labour, weaker demand 

The aircraft maintenance company controlled by Swire Group reported revenue of HK$11.9 billion for 2014. Photo: Nora Tam

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.css-sioo19{color:#c79a00;}Update | Haeco revenue flies on US acquisition; but profits slide on labour, weaker demand

Update | Haeco revenue flies on US acquisition; but profits slide on labour, weaker demand