KUALA LUMPUR (June 20): Sapura Resources Bhd, which reported an 89% drop in its first quarter earnings after it sold off its education business, is moving to strengthen its aviation business by expanding its customer base to include the government and regional markets.

It expects the tie-up with Destini Bhd to bring about the desired customer base expansion and market segment improvement.

It announced today that its wholly-owned unit Sapura Aero Sdn Bhd (SASB), which is in the aviation business, has inked a joint venture and shareholders agreement with Destini's wholly-owned unit Destini Aviation Sdn Bhd (DASB), to take equal ownership in JV company (JVCo) Urban Fleet Sdn Bhd.

The JVco — which will draw on the skills, expertise, experience and capabilities of both parties — will take part in the sale of rotary wing and fixed wing aircraft, supply and provisioning of maintenance, repair and overhaul services in relation to aircraft and helicopters, and the provision of programmes like wet leasing and dry leasing of aircraft.

The initial capitalisation of the JVCo is only RM2, comprising 2 shares of RM1, Sapura Resources said. The JVCo was incorporated on March 28, 2017 and is involved in the import and export of a variety of goods, without any specialisation.

The agreement is subject to the approval of both SASB and DASB’s directors and shareholders. In its own Bursa filing, Destini said having SASB as its partner will strengthen its unit's capabilities in aircraft, and MRO services. 

Separately, Sapura Resources posted a 89% drop in net profit to RM248,000 in its first quarter ended April 30, 2017 (1QFY18), on lower share of results from associates, following the disposal of its 49% interest in APIIT Education Group.

However, revenue for the quarter grew 6% to RM12.4 million, mainly due to higher revenue registered in its aviation segment, Sapura Resources said in a separate filing.

Sapura Resources shares slid 1 sen to close at RM1.09 today, giving it a market capitalisation of RM152.16 million.