ST Engineering Posts Higher Year-on-Year Revenue and Profits for 2Q2019

ST Engineering Posts Higher Year-on-Year Revenue and Profits for 2Q2019

For the second quarter ended 30 June 2019 2019





Revenue ($m) 1,780 1,651  3,511  3,298 6
Earnings before interest and tax (EBIT) ($m)  157.9 144.5 299.8  266.6 12
Other income, net ($m)  7.3 19.2  (62) 17.5 27.9 (37)
Finance costs, net ($m) (8.4) (25.8) 68  (9.3) (28.0) 67 
Profit before tax (PBT) ($m) 169.7 150.4 13  329.6  294.4 12 
Profit attributable to shareholders ($m) 138.2 117.5  18 269.3 235.2 14
Earnings per share (cents) 4.43 3.77  18 8.63 7.55 14

• Record high order book of $15.6b at end June 2019, of which about $3.8b is expected to be delivered in the remaining months of 2019
• Commercial sales and defence sales constituted 71% or $1.3b and 29% or $0.5b respectively
• Cash and cash equivalents of $0.3b

N.B.: All currencies are in Singapore dollars

ST Engineering 2Q2019 Financial Statements and ST Engineering Results Presentation 2Q2019

Singapore, 14 August 2019 - Singapore Technologies Engineering Ltd (ST Engineering) today reported that it registered higher revenue and profits for its second quarter ended 30 June 2019 (2Q2019) compared to the same period a year ago. Quarterly revenue grew 8% y-o-y to $1.78b from $1.65b, and Profit before tax (PBT) rose 13% to $169.7m from $150.4m and Profit attributable to shareholders (Net Profit) was up 18% to $138.2m from $117.5m. Newly acquired MRAS was consolidated from 18 April as part of its Aerospace sector’s Engineering & Material Services business group.

At the business sectors, revenue for the Aerospace sector was up 17% y-o-y to $836m from $713m, with MRAS as the main contributor, partly offset by the absence of engine sales and Jet Airways revenue. Despite contribution from MRAS, its Net Profit was 4% lower y-o-y at $64.2m from $66.6m mainly due to the absence of prior year’s profits arising from the divestment of an associated company and opportunistic engine sales. Revenue for the Electronics sector was $495m, down 3% from $512m a year ago and Net Profit was 5% lower y-o-y at $44.3m from $46.7m, largely due to timing in revenue recognition for projects and higher selling and distribution expenses as a result of increased sales activities to support international expansion. Revenue for the Land Systems sector was up 10% to $296m from $270m the year before, driven by broad-based growth across its business groups, and its Net Profit was flat at $20.3m partly due to increased investments in its Robotics & Autonomous Systems Business division. The Marine sector’s revenue was $139m, down 6% from $148m a year ago with lower Shipbuilding revenue contribution from Singapore. Notwithstanding the lower revenue, its Net Profit increased 55% y-o-y to $14.3m driven by improved U.S. shipbuilding performance and contributions from its Engineering business group. “Others” revenue was up 75% to $14m from $8m mainly contributed by higher sales from Miltope, its ruggedised computer business, with lower net loss of $4.9m in the absence of MTN redemption related costs.

Six Months Results: 1H2019 versus 1H2018
First half revenue (1H2019) for the Group reached $3.51b, up 6% from $3.30b a year ago. PBT increased 12% to $329.6m from $294.4m and Net Profit was up 14% to $269.3m from $235.2m a year ago.

The Aerospace sector generated revenue of $1.46b, up 11% from $1.31b and its Net Profit was $127.0m versus $125.7m a year ago. Revenue for the Electronics sector was 5% lower y-o-y at $1.06b compared with $1.12b last year and its Net Profit was flat at $87.6m. The Land Systems sector revenue increased 22% y-o-y to $673m from $551m with Net Profit roughly flat at $35.6m. Marine sector revenue was 3% lower y-o-y at $288m compared with $298m last year, but its Net Profit grew 47% to $26.3m from $17.9m a year ago. “Others” revenue was up 59% y-o-y to $33.8m from $21.2m, and Net Loss narrowed to $7.2m against $31.4m a year ago, helped mainly by the absence of MTN redemption related costs.

“MRAS acquisition was completed in April. It has been accretive to our earnings and its integration into the Group is progressing well.

Our underlying business remains strong and our group’s record high order book of $15.6b gives us revenue visibility over the next few years.”

Vincent Chong, President & CEO, ST Engineering

Commercial sales and defence sales contributed 71% and 29% respectively to the Group’s revenue in 2Q2019. The Group ended the quarter with $0.3b cash and cash equivalents.

The order book as at end of June 2019 included the backlog of MRAS post acquisition and excluded the US$350m (S$472m) Jet Airways contract secured in 2015 as it is in the process of liquidation. The Group expects to deliver $3.8b of the order book in the remaining months of 2019.

Interim Dividend
The Board has approved an interim dividend of 5.0 cents per ordinary share, and the dividend payment will be made on 3 September 2019.

New Contracts in 2Q2019
The Group announced about $2.5b worth of new contracts for 2Q2019, which comprised the $1b contract for the first Polar Security Cutter, $809m from the Aerospace sector and $702m from the Electronics sector.


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 $6.7b in FY2018 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.

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