News - ST Engineering Delivers Higher Net Profit for 2Q2018 vs 2Q2017

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ST Engineering Delivers Higher Net Profit for 2Q2018 vs 2Q2017

ST Engineering Delivers Higher Net Profit for 2Q2018 vs 2Q2017

FINANCIAL HIGHLIGHTS
For the second quarter ended
30 June 2018

 

2018
2Q

2017
2Q
(Restated)*

Growth
%

2018
1H

2017
1H
(Restated)*

Growth
%

Revenue ($m)

1,651

1,707

(3)

3,298

3,218

2

Earnings before interest and tax (EBIT) ($m)

144.5

125.3

15

266.6

237.8

12

Other income, net ($m)

19.2

10.7

80

27.9

22.4

25

Finance costs, net ($m)

- MTN early redemption

- Disposal of bond investments

- Others


(25.8)

 

(15.3)

 

(4.4)

 

(6.1)

 

(3.5)

 

-

 

0.1

 

(3.6)

NM

 

NM

 

NM

 

69

(28.0)

 

(15.3)

 

(4.9)

 

(7.8)

(8.9)

 

-

 

(0.1)

 

(8.8)

NM

 

NM

 

NM

 

(11)

Profit before tax (PBT) ($m)

150.4

144.0

4

294.4

276.7

6

Profit attributable to shareholders ($m)

117.5

106.8

10

235.2

206.7

14

Earnings per share (cents)

3.77

3.43

10

7.55

6.64

14

NM: Not Meaningful

* Comparative figures were restated on the adoption of Singapore Financial Reporting Standards (International) (SFRS(I)) with effect from 1 January 2018

  • Order book of $13.4b at end June 2018, of which about $2.7b is expected to be delivered in the remaining months of 2018
  • Commercial sales and defence sales constituted 72% or $1.2b and 28% or $0.5b respectively
  • Economic value added for first half of 2018 was $129.0m (1H2017: $107.1m)
  • Cash and cash equivalents including funds under management totalled $1.2b

Group 2Q2018 Unaudited Results and Group Results Presentation 2Q2018
N.B.: All currencies are in Singapore dollars

Singapore, 8 August 2018 - Singapore Technologies Engineering Ltd (ST Engineering) today announced financial results for its second quarter ended 30 June 2018 (2Q2018). The Group ended the quarter with revenue of $1.65b, down 3% year-on-year from $1.71b in the absence of the one-time revenue increase for the Electronics sector in 2Q2017 from the modification of revenue recognition estimates1. Profit Attributable to Shareholders (Net Profit) for 2Q2018 grew 10% to $117.5m from $106.8m a year ago.

Following the Group’s announcement in mid-June 2018 to redeem all of the outstanding US$500,000,000 4.80% Notes due 20192, it accrued the one-time interest cost of $15.3m in 2Q2018. The Group expects the interest savings to exceed the one-time cost over the next twelve months.

At the business sector level compared to the same period last year, revenue for the Aerospace sector was $713m, up 12% from $639m and its Net Profit grew 26% to $66.6m from $52.9m. Revenue for the Electronics sector was 10% down from $572m to $512m due to the absence of the one-time revenue increase in 2Q20171, and its Net Profit was up 22% to $46.7m from $38.2m. Revenue for the Land Systems sector was $270m, down 11% from $302m mainly due to timing of project deliveries, and its Net Profit of $20.4m was 3% lower compared to $21.1m. The Marine sector posted revenue of $148m, down 9% from $163m and its Net Profit was $9.2m, compared to a net loss of $1.4m in 2Q2017.

Commercial sales and defence sales accounted for 72% and 28% of the Group’s 2Q2018 revenue respectively. Order book remained strong at $13.4b, and the Group expects to deliver $2.7b of orders in the rest of 2018. Cash and cash equivalents including funds under management as at 30 June 2018 was $1.2b.

Six Months Results: 1H2018 versus 1H2017

Group revenue for the first half of 2018 (1H2018) was $3.30b compared to $3.22b in the same period last year, and 1H2018 Net Profit was $235.2m, up 14% year-on-year from $206.7m.

The Aerospace sector posted revenue of $1.31b, up 10% from $1.19b and Net Profit grew 15% to $125.7m from $109.0m. Revenue for the Electronics sector was $1.12b, up 5% from $1.07b and its Net Profit was 23% higher at $87.0m from $71.0m. Revenue for the Land Systems sector fell 4% to $551m from $574m but its Net Profit rose 10% to $36.0m from $32.7m due to favourable sales mix. While revenue for the Marine sector was $298m, 13% lower than $342m, its Net Profit improved 168% to $17.9m from $6.7m mainly due to lower allowance for doubtful debts.

“Our Aerospace and Electronics sectors delivered strong 2Q2018 earnings. Our order book remained robust at $13.4b, contributed by new orders including those in the Smart City spaces. On the whole, we are tracking well on our strategy of strengthening our core as well as actively pursuing growth opportunities in defence exports and Smart City projects.” ~ Vincent Chong, President & CEO, ST Engineering

Interim Dividend

The Board has approved to maintaining the interim dividend at 5.0 cents per ordinary share, similar to the interim dividend payouts in the last three years. Shareholders will receive the payment on 28 August 2018.

New Orders in 2Q2018

The Group announced new contracts worth about $1.27b in the second quarter. Of these, $510m was from the Aerospace sector for services ranging from heavy maintenance to engine wash and aircraft interior reconfiguration including a heavy maintenance contract to support a cargo airline in servicing its Boeing 767-300s, and a contract to perform cabin reconfiguration for part of Air Canada’s A330-300 fleet. The Electronics sector secured about $764m worth of new contracts, mainly for its Smart City solutions in mobility, satellite communications, Internet of Things, public safety & security and cybersecurity, as well as defence solutions.

In addition to these new contracts, the Land Systems sector secured orders for its weapons and munitions from customers in Asia, Europe and Middle East, as well as for its Road Construction Equipment and Specialty Vehicles from customers in Asia, Latin America and North America. The Marine sector secured ship repair projects in Singapore and the US.

ST Engineering is a global technology, defence and engineering group specialising in the aerospace, electronics, land systems and marine sectors. The Group employs about 22,000 people across offices in Asia, the Americas, Europe and the Middle East, serving customers in the defence, government and commercial segments in more than 100 countries. With more than 500 smart city projects across 70 cities in its track record, the Group continues to help transform cities through its suite of Smart Mobility, Smart Security and Smart Environment solutions. Headquartered in Singapore, ST Engineering reported revenue of S$6.62b in FY2017 and it ranks among the largest companies listed on the Singapore Exchange. It is a component stock of the FTSE Straits Times Index, MSCI Singapore, SGX ESG Transparency Index and SGX ESG Leaders Index.

For further enquiries, please contact:

Lina Poa
Head, Corporate Communications & Investor Relations
Email: linapoa@stengg.com
Tel: (65) 6722 1883

1 The modification of revenue recognition estimates in 2Q2017 was for long-term contracts from milestone completion per customer acceptance to monthly work done.
2 The Notes were issued under its US$1.2b Multicurrency Medium Term Note Programme, and the early redemption was completed on 16 July 2018.

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