|For the third quarter ended 30 September 2019||2019
|Earnings before interest and tax (EBIT) ($m)||163.1||143.6||14||462.9||410.3||13|
|Other income, net ($m)||7.2||11.9||(39)||24.7||39.7||(38)|
|Finance (costs)/income, net ($m)||(10.5)||0.7||NM||(19.8)||(27.3)||(27)|
|Profit before tax (PBT) ($m)||166.8||165.8||1||496.5||460.2||8|
|Profit attributable to shareholders ($m)||139.1||134.6||3||408.4||369.8||10|
|Earnings per share (cents)||4.46||4.32||3||13.09||11.86||10|
N.B.: All currencies are in Singapore dollars
Singapore, 11 November 2019 - Singapore Technologies Engineering Ltd (ST Engineering) today reported that the Group revenue for its third quarter ended 30 September 2019 (3Q2019) was 27% higher at $2.07b versus $1.63b a year ago. Compared to the same period last year, quarterly Profit before Tax (PBT) was up 1% to $166.8m from $165.8m and Profit attributable to shareholders (Net Profit) grew 3% to $139.1m from $134.6m. Excluding the provision of $14.2m before tax made for the arbitration outcome with Hornbeck Offshore Services, LLC (Hornbeck) as announced on 23 October 2019, the Group’s PBT would have been 9% higher year-on-year (y-o-y) at $181.0m and Net Profit would have been up 12% y-o-y at $150.3m.
At the business sectors, revenue for the Aerospace sector grew 53% y-o-y to $1.1b from $689m largely due to MRAS’ contribution and revenue recognised from various end-of-programme reviews. Its Net Profit was up 17% y-o-y to $65.0m from $55.4m mainly due to MRAS’ contribution and end-of-programme reviews partly offset by assets impairment including rotables, and the absence of prior year’s divestment gain. Revenue for the Electronics sector was $538m, up 10% from $491m a year ago driven by higher revenue from overseas mobility projects and software systems projects, and its Net Profit was 7% lower y-o-y at $51.5m from $55.5m, largely due to increased investments in new growth areas. In spite of a 3% y-o-y increase in revenue to $307m from $297m, Net Profit for the Land Systems sector was 14% lower at $15.1m from $17.6m a year ago mainly due to the absence of a favourable tax credit recorded in the prior year and its continued investments in robotics capabilities. Revenue for Marine sector grew 13% to $155m from $137m the year before, driven by broad-based growth across its business groups while its Net Profit would have been 14% higher y-o-y at $14.6m if the amount for arbitration outcome was excluded.
“Amidst the trade tensions and geopolitical uncertainties which continue to weigh on the global economy, we continue to pursue growth areas, build capabilities, and integrate MRAS, Newtec and Glowlink into the Group.
Our core business remains strong and our Group’s robust order book of $15.9b continues to provide revenue visibility for the next few years.”
Vincent Chong, President & CEO, ST Engineering
Commercial sales and defence sales contributed 75% and 25% respectively to the Group’s revenue in 3Q2019. The Group ended the quarter with $0.8b cash and cash equivalents, prior to the payment of $350.5m consideration for Newtec acquisition that was closed on 1 October 2019.
Nine Months Results: 9M2019 versus 9M2018
In the nine months ended 30 September 2019 (9M2019), the Group achieved revenue of $5.6b, up 13% from $4.9b a year ago. PBT was 8% higher at $496.5m from $460.2m the year before and Net Profit grew 10% y-oy to $408.4m from $369.8m.
The Aerospace sector recorded revenue of $2.5b, up 26% from $2.0b and its Net Profit was 6% higher at $191.9m versus $181.2m a year ago. Revenue for the Electronics sector was flat at $1.6b and its Net Profit was 2% lower at $139.1m compared with $142.4m the year before. The Land Systems sector revenue grew 16% y-o-y to $980m from $847m and its Net Profit came in 5% lower at $50.6m compared to $53.6m a year ago. Revenue for the Marine sector was $443m, up 2% from $435m the year before, and its Net Profit was 3% lower y-o-y at $29.7m from $30.7m. “Others” revenue was up 52% y-o-y to $51m from $34m, and Net Loss narrowed to $2.9m compared to $38.1m a year ago because of the absence of MTN redemption related costs.
Order book and order wins in 3Q2019
As at 30 September 2019, the Group’s order book stood at a high of $15.9b, of which $2.2b will be delivered in the remaining months of 2019.
The Group announced a total of $1.8b worth of new contracts for 3Q2019. $1.0b was from the Aerospace sector for a spectrum of aviation manufacturing and services including multi-year MRO agreements for both defence and commercial customers, engine nacelle component and floor panel manufacturing. $833m was from the Electronics sector, received from global customers for its satellite communications, mobility, public safety and security, Internet of Things, training and simulation, cybersecurity and defence solutions.
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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