SINGAPORE (May 15): The impact of the Covid-19 global pandemic has led ST Engineering to suffer a reduction in customer demand, supply chain disruption, and workforce disruption.
As such, the company is expecting a 5-15% slide in its FY2020 revenue compared to its FY2019 revenue, it said in its 1Q market update on Friday.
In the same quarter, ST Engineering announced a combined value of $1.6 billion worth of new contracts in the aerospace and electronics sector. $838 million was from the aerospace sector, while $730 million came from the electronics sector.
$4.5 billion worth of contracts are expected to be delivered in the rest of 2020.
Its defence business remains robust with existing contracts from the land systems and marine sectors.
This brings the company’s order book to a total of $16.3 billion as at end March.
To mitigate the impact of the global Covid-19 pandemic, ST Engineering has introduced several efficiency and cost-reduction initiatives such as re-prioritising its investments and capital expenditures (capex), and management pay cuts, on top of receiving support from government aid and stimulus packages.
Looking ahead, the company is exploring capitalising on new demands arising from Covid-19, such as Command & Control, cybersecurity, sensors, robotics and unmanned systems.
Shares in ST Engineering closed 4 cents lower, or 1.2% down, at $3.31 on Thursday, prior to the announcement.
