ST Engineering delivers comparable first-quarter profits from last year

Despite revenue hits in some divisions.

In what the company has described as a "steady performance," Singapore Technologies Engineering Ltd (ST Engineering) reported financial results for its first quarter ended 31 March 2013 (1Q2013) that almost mirrored the same period last year. First quarter revenue of $1.55b, as well as profit before tax (PBT) and net profit at $162.1m and $134.0m respectively, were all comparable with the corresponding quarter of 2012.

Commercial sales constituted 64% or $993m of the Group’s first quarter revenue. Order book grew to $13.0b from the $12.1b recorded in 31 December 2012. The Group expects to deliver $3.6b of the order book in the remaining months of 2013.

The higher revenue in the Aircraft Maintenance & Modification (AMM) business group was offset by the lower revenue in the Component/Engine Repair & Overhaul (CERO) and Engineering & Material Services (EMS) business groups. The Aerospace sector reported comparable revenue of $476m compared to 1Q2012.

Revenue for the Electronics sector at $424m was down by 6% or $28m year-on-year, mainly attributable to lower value project milestone completions in Communication & Sensor Systems Group (CSG). The Land Systems sector’s revenue of $346m was 9% or $29m higher compared to 1Q2012, as a result of higher revenue in the Automotive (Auto) business group, partially offset by lower revenue in the Munitions & Weapon (M&W) and Services, Trading & Others (S&T) business groups. Revenue for the Marine sector at $254m was comparable to the same period last year.

The Group ended the first quarter with $2.5b in cash and cash equivalents including funds under management. Advance payments from customers stood at $2.0b.

“The Group successfully secured new orders from our diverse range of customers to register a record order book of $13.0b at the end of the first quarter of 2013. We continue to build on the Group’s robust financial position with improved cash and cash equivalents including funds under management of $2.5b, Barring unforeseen circumstances, the Group expects to achieve higher Revenue and PBT for FY2013 compared to FY2012," said Tan Pheng Hock, President & CEO, ST Engineering.

In the first quarter, the Aerospace sector won $480m worth of contracts for airframe, component and engine maintenance, as well as engineering and development, which will be carried out through its global maintenance, repair and overhaul (MRO) network. The Electronics sector announced contracts worth $151m for rail electronics, satellite communications and smart utility projects. The Marine sector’s US shipyard received contracts to build two Articulated Tug Barge units for Bouchard Transportation Co. Inc, while its Singapore shipyard won a contract to design and build eight new naval vessels for the Republic of Singapore Navy.