Aerospace Industrial Development (2634) Q2 2024 earnings summary

Executive summary

• Strong global air passenger demand is driving record-high industry revenues, with IATA projecting $996 billion in 2024, a 10% YoY increase.

• Commercial aircraft deliveries are forecasted to exceed 42,000 units over the next 20 years by both Airbus and Boeing, with single-aisle jets comprising the majority.

• AIDC secured long-term contracts for aero engine components and renewed supply agreements for commercial narrow-body aircraft, ensuring stable future revenue.

• Recognized by Rolls-Royce as a High Performing Supplier, enhancing strategic cooperation opportunities.

• Revenue for the six months ended June 30, 2024 was NT$19,378 million, nearly flat year-over-year, with net profit at NT$1,375 million, up 6% from the prior year period.

Financial highlights

• H1 2024 EPS reached NT$1.46, up 6% year-over-year.

• H1 2024 sales breakdown: 56% defense, 41% commercial, 3% technology service.

• Net profit and EPS continue to trend toward historical highs.

• Gross margin declined to 10% from 11% year-over-year, reflecting higher cost of goods sold.

• Operating income for the six months was NT$1,391 million, down 6% year-over-year.

Outlook and guidance

• Focus on growth in defense, commercial, and tech service sectors, with an emphasis on high-profit business and next-generation aircraft programs.

• Distribution business and energy management solutions identified as new growth drivers.

• The company continues to invest in international aircraft and engine development projects and maintains sufficient capital for expansion and equipment upgrades.

• Management is monitoring the impact of new and upcoming IFRS standards, including IFRS 18 and amendments to IAS 21.