Check out what's making ST Engineering freak out amid Eurocrisis

Its 're-structuring exercise' will affect 300 employees.

According to Nomura, ST Engineering has announced that its aerospace arm ST Aerospace will be re-structuring its Scandinavian operations given weakening airline passenger traffic and subdued demand for air cargo in the region.

Here's more from Nomura:

The re-structuring is expected to aim at streamlining work processes and cost structure at three facilities in Copenhagen, Norway and Sweden. The re-structuring exercise, will begin immediately, should be completed by 3Q13 and is expected to affect 300 employees across functions.

The group’s Scandinavian aircraft component\MRO operations under wholly owned subsidiary ST Aerospace Solutions (Europe) was established in March 2006, when the group expanded into Europe with the milestone acquisition of a 67% stake in SAS Components A/S for €80.4m (approximately S$161m).

For the six months ended 30 June 2005, SASC’s revenue was €105m and EBITDA was €18.6m, and the group had expected the acquisition to be immediately earnings enhancing for ST Engineering. At that time, the group had 1,100 employees, with warehouses and repair shops in Copenhagen, as well as significant facilities located at Arlanda Airport, Sweden and Gardenmoen Airport in Norway.

However, the acquisition and the business thereafter proved a bumpy ride, when shortly in July that year, the group closed its operations in Stavanger, Norway after SAS Technical Services, a significant customer, announced plans to close its production base near Stavanger.

That closure affected 98 staff based in Stavanger. Shortly after the group then transferred its entire stake in Airline Rotables (UK) Ltd to SAS Component’s A\S and increased its stake in SASC to 71.3%. In 2008, ST Aerospace then acquired 100% in SAS Component and renamed it ST Aerospace Solutions (EU) A/S.

The group has said the restructuring should not have a material impact on the NTA and earnings per share of the STE Group for FY12F. In 2QFY12, Europe accounted for 15% (S$77mn) of ST Aerospace’s revenue (S$494mn) and less than 5% (our estimates) of ST Aerospace’s PBT (S$81.6mn).

The whole components, engine repair and overhaul segment accounted for 18% (S$14.7mn) of PBT, while aircraft maintenance & modification for 54%, and Engineering and Materials for 28% of ST Aerospace’s PBT.