ST Eng'g net profit up 0.2% to S$280.6m in H1; interim dividend is 0.4 cents

The urban solutions and satcom segment saw an EBIT loss of S$34m.

ST Engineering’s net profit changed little from 2022, with its business segments logging mixed performance in their earnings.

Profit attributable to shareholders is S$280.6m for H1, 0.2% higher than the S$280m reported in H1 2022, ST Engineering said in its latest financial report.

A second interim dividend of 4 cents per ordinary share (EPS) has been approved by the board of directors. Shareholders will receive payment on 1 September. Earnings per share (EPS) is 9.01 cents for the period.

Group revenue for the period was S$4.86b, 14% higher than a year ago, driven by higher contributions from all of its three business segments. Group earnings before earnings, interest, tax, depreciation and amortisation (EBITDA) was S$711m, 16% higher than a year ago.

Revenue in the commercial aerospace segment grew 32% to S$1.86b, thanks to ST Engineering’s Aerospace MRO and Aerostruutres & Systems sub-segments logging higher revenues. However, earnings before interest and taxes (EBIT) fell 3% to S$178m, although the fall is driven by the commercial aerospace segment’s one-off pension restructuring gain in 2022, resulting in a higher EBIT last year. If excluding this gain, EBIT in 2023 would have been 60% higher than in 2022.

The defence & public security segment, meanwhile, reported a revenue of S$2.12b, with EBIT being 41% higher at S$301m, compared to H1 2022’s S$214m.

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Its urban solutions & satcom segment saw revenue rise by 18% to S$891m. However, the segment also incurred a bigger EBIT loss of S$34m in H1 2023 compared to the S$12m loss in H1 2022.

ST Engineering blamed the loss on Satcom’s weaker performance, which is said was a result of supply chain disruptions primarily chip shortages. The remaining impact of COVID, near-term costs of business restructuring, and a one-off loss on the divestment of SatixFy also led to the loss.

New contracts
For the second quarter, ST Engineering shared that it has secured around S$4.7b in new contracts, comprising S$2.3b in its commercial aerospace segment, S$1.9b in its defence and public security segment, and about S$500m from its urban solutions & satcom segment.

Along with its Q1 new contracts of S$4.9b, ST Engineering has secured a total of S$9.5b in the first half of 2023.

In the first six months of 2023, commercial sales and defence sales accounted for $3.3b and $1.6b respectively of group revenue. As at 30 June 2023, the Group held $387m in cash and cash equivalents.

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