ST Engineering first half profit up 11% to $241.6mn

The company eyes to achieve comparable revenue and higher profit for the present fiscal year.

Singapore Technologies Engineering Ltd (ST Engineering) on Tuesday announced steady profit growth for first half 2011. Compared with 1H2010, revenue increased by 6% to $3.1b, while both profit before tax (PBT) and net profit grew by 11% to $305.0m and $241.6m respectively.

Compared to 2Q2010, second quarter's revenue was comparable, PBT grew 6% or $9.3m to $166.9m and net profit increased 5% or $6.5m to $130.5m. Notwithstanding an unfavourable impact of a weakened US dollar, Aerospace sector achieved higher PBT, mainly due to favourable sales mix and higher contribution from associates. Electronics sector's performance was steady with comparable revenue and PBT. Land Systems sector recorded lower PBT as a result of lower project deliveries and higher operating expenses, while Ma rine sector recorded higher PBT as a result of higher shiprepair activities. 

Commercial sales accounted for 62% or $925m of the turnover for the second quarter. As at June 2011, the Group's cash and cash equivalents, and short-term investments totalled $1.47b while advance payments from customers stood at $1.5b. The Group maintained a healthy order book of $10.8b, of which about $2.3b is expected to be delivered in the second half of 2011. Earnings per share was 4.29 cents, representing a 4% growth compared to 2Q2010.

During the quarter, the Aerospace sector announced new maintenance projects of over $260m, and a 20-year logistics support contract with Alenia Aermacchi for 12 M346 aircraft, with a first year's contract value of about $50m. Electronics sector announced the securing of $58m worth of Intelligent Transportation Systems and Info-Security contracts, and was awarded a S$68m contract to supply Army Gunnery Tactical & Driving Simulation Systems to the Ministry of Defence. Marine sector won a shipbuilding contract worth about $171m to build four offshore supply vessels in addition to numerous newbuild, repair and conversion contracts.

"The Group registered 6% revenue growth for 1H2011 over 1H2010. PBT and Net Profit grew stronger at 11%. The Group's order book as at end June was a healthy $10.8b.

The Board of Directors has approved the payment of an interim ordinary dividend of 3 cents per share, payable on 2 September 2011, according to an ST Engineering report.

Barring unforeseen circumstances, the Group expects to achieve comparable revenue and higher PBT for FY2011 over FY2010," according to Tan Pheng Hock, President & CEO, ST Engineering.