ST Engineering's net profit dips 6% to $103.4m

Aerospace, Land System, and Marine segments were lacklustre in Q1.

Singapore Technologies Engineering failed to shine this quarter with its weak aerospace, land system, and marine segments.

For the past quarter, ST Engineering posted a revenue decline of 5.4% to $1.5b. This came with the declines in the headline of the three segments mentioned above, OCBC Investment Research said.

Whilst its gross profit went up 8.6% to $317.2m, net profit declined 6% to $103.4m. This is due to a 47% drop in other income as a result of lower wage credit and a 39.2% decline in share of results from associates and JVs. However, It was offset by a 55.5% fall in net finance costs for the quarter.

Here's more from OCBC Investment Research:

By key business sectors, STE’s 1Q17 group PBT margin rose 1.0ppt YoY to 9.4%, lifted mainly by improvements at its aerospace sector (+2.0ppt) due to higher contribution from the EFW and Marine sector (+3.4ppt) on better performance from shipbuilding from both U.S. and local operations.

Consequently, as tax expenses rose 37.7% YoY to S$27.0m, 1Q17 PATMI missed our expectations as it declined 6.1% to S$103.4m, which formed 20% of our FY17 forecast. Looking ahead, STE is guiding for FY17 revenue to be comparable, while PBT is expected to be higher than that of FY16, respectively.