ST Engineering’s net profit down 15% to $110m in Q1

Due to lower revenue from land systems, marine.

ST Engineering reported a 15% decline in its first-quarter net profit to $110 million. Higher earnings in its aerospace and electronics arms were offset by lower revenue from its land systems and marine segments.

Revenue for the aerospace sector was 27% higher at $622m from $489m, mainly driven by the contribution of a new subsidiary, Elbe Flugzeugwerke. Profit before tax for the Aerospace sector remained comparable at $75.2m.

Meanwhile, revenue for its electronics arm rose 28% to $457m, while profit before tax rose 13% to $39.6m. This was on back of higher value project milestone completions.

However, the land systems sector recorded lower revenue for all its business groups, resulting in a 18% drop in revenue to $284m from $346m, and 28% drop in profit before tax to $11.6m from $16.2m.

In the marine sector, weaker shipbuilding performance in Singapore and US operations resulted in revenue of $213m, 24% lower compared to $280m, and PBT of $3.4m, 85% down from $23.4m.

"For the first quarter of 2016, the Group reported higher revenue, but lower profit before tax compared to the same quarter last year. Our business operations, including shipbuilding, continue to face industry headwinds, the impact of slow-down in China and overall, an uncertain global economic outlook," said Tan Pheng Hock, President and CEO of ST Engineering.