ST Engineering's 2012 profits would have been better if not for some 'doubtful' numbers: DBS

STE profits up 9% YoY.

STE reported net profit of S$576m for FY12, up 9% y-o-y on the back of 6% growth in revenue to S$6.4bn.

Earnings were mainly driven by Aerospace and Electronics segments, but all divisions showed improvement.

DBS noted that results would have been better if not for higher allowances for doubtful debts, impairment of goodwill and higher tax charges. Group PBT margin remained stable at 11%. Aerospace margins improved to 15% despite start-up losses at new projects.

STE finished the year with an orderbook of S$12.1bn, but this could be boosted by another S$1.5-2bn (our estimate) from the recently secured contract to build 8 patrol vessels for the Singapore Navy, said DBS.

"We conservatively expect earnings growth of about 6% p.a.in FY13/14F, but there is upside potential from the MRO division, where business has been picking up, especially in the US, it added.