|Earnings before interest and tax (EBIT) ($m)||553.3||471.1||17|
|Other income, net ($m)||
|Finance costs, net ($m)||
|Profit before tax (PBT) ($m)||
|Profit attributable to shareholders (Net Profit) ($m)||
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|Economic value added (EVA) ($m)||
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NM: Not Meaningful
Singapore, 23 February 2018 - Singapore Technologies Engineering Ltd (ST Engineering) today reported its full year financial results for the period ended 31 December 2017 (FY2017), with a Group revenue of $6.62b compared to $6.68b for FY2016. Year-on-year, the Group registered higher profits. Group Profit before tax (PBT) at $623.3m was 6% higher than $590.6m, and Profit attributable to shareholders (Net Profit) of $511.9m was 6% higher compared to $484.5m in the prior year.
At the business sector level, the Aerospace sector posted revenue of $2.54b, up 2% from $2.48b the year before. Year-on-year, its PBT was 6% higher at $317.8m compared to $300.3m and Net Profit was comparable at $244.1m. Revenue for the Electronics sector was $2.11b, 12% up compared to $1.88b a year ago. Its PBT was $212.3m compared to $207.8m and Net Profit was 2% higher at $178.8m compared to $174.5m a year ago. The Land Systems sector revenue was $1.24b, down 11% year-on-year compared to $1.39b. Due to the absence of prior year’s impairment of asset carrying values and the provision of closure costs for Land Systems’ subsidiaries in China, its PBT was $85.0m, up 119% from $38.8m and Net Profit improved 243% year-on-year from $25.5m to $87.4m. The Marine sector revenue was $637m, down 24% year-on-year from $841m and its PBT was $22.4m, down 70% from $75.1m a year ago due mainly to the weak industry conditions and its US operations. Consequently, Net Profit for Marine sector was 60% lower at $27.0m from the year before.
4Q2017 versus 4Q2016
In the fourth quarter ended 31 December 2017 (4Q2017), the Group posted revenue of $1.70b, down 6% compared to $1.82b in the same period last year. Group PBT was 5% lower at $173.5m compared to $183.3m and Net profit was flat at $168.5m compared to the same period the year before.
At the business sector level, revenue for the Aerospace sector rose 9% to $740m from $680m. Its PBT was up 10% to $94.5m from $85.8m in the same period last year and Net Profit at $86.4m, was 14% higher from the year before. For the Electronics sector, revenue of $468m was 9% down from $517m, its PBT and Net Profit of $63.0m and $55.7m were comparable to $64.2m and $54.6m respectively in the same period last year. Revenue for the Land Systems sector at $338m was 21% lower than $426m; its PBT was down 9% to $24.4m from $26.8m a year ago in the same period. Despite this, Net Profit was 57% higher at $42.6m compared to a year ago, mainly due to tax reform effects in the US. The Marine sector posted revenue of $131m, down 22% from $168m. Its PBT was $0.4m, down 97% from $12.6m a year ago in the same period and Net Profit was 95% lower year-on-year at $0.7m.
In 2017, commercial sales and defence sales constituted 65% or $4.3b, and 35% or $2.3b respectively of Group revenue. The spread of Group revenue in FY2017 by business sector was 38% from the Aerospace sector, 32% from the Electronics sector, 19% from the Land Systems sector and 10% from the Marine sector, with the remainder under “Others”.
As at 31 December 2017, cash and cash equivalents including funds under management totalled $1.3b.
“In FY2017, profits were higher than and revenue was comparable to FY2016. We started 2018 with a strong order book of $13.2b, providing us with steady revenue pipeline for the next few years.
We will continue to strengthen our core businesses, drawing upon the strengths of each sector to offer innovative technologies in the areas of defence and smart city solutions (including, among others, cybersecurity, public security services, urban transportation and robotics) to our customers around the world. We expect that our performance will strengthen over the next few years. Growth will come from the Aerospace sector as its A330 and A320 passenger-to-freighter conversion programmes gain momentum, and from the more expansive smart city offerings emanating from the Electronics and Land Systems sectors in Singapore and overseas. Industry conditions for the Marine sector are likely to remain weak in 2018, but we will continue to focus on strengthening our operational efficiency,” said Vincent Chong, President & CEO, ST Engineering.
Dividend payout and dividend yield
The Board of Directors proposes a Final Dividend of 10.0 cents per share. Together with the Interim Dividend of 5.0 cents per share distributed in August 2017, shareholders will receive a total dividend of 15.0 cents per share for FY2017. This translates to a dividend yield of 4.6%, computed using the average closing share price of the last trading day of 2017 and 2016.
Order book and 2017 new wins
The Group ended the year with an Order book of $13.2b, about 14% higher than the year before. About $3.8b of the Order book is expected to be delivered in 2018. Announced contract value for 2017 amounted to about $5.1b, comprising about $2.8b for the Aerospace sector, and about $2.3b for the Electronics sector. Both the Land Systems and Marine sectors also secured new contracts, including the new generation armoured fighting vehicles and new builds for a Passenger Ferry, an ATB Tug and America’s first offshore Liquefied Natural Gas Articulated Tug and Barge unit.
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 more than 100 countries. Its employees bring innovation and technology together to create smart engineering solutions for customers in the defence, government and commercial segments. 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 and the SGX Sustainability Leaders Index. Please visit www.stengg.com for more information.
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