SINGAPORE (Feb 16): ST Engineering posted $484.5 million in earnings for the full year ended Dec 2016, 8% down from its profit of $529 million a year ago.
The lower profit was largely a result of a one-off charge consisting of an impairment of asset carrying values and provision for closure costs for JHK, the land systems sector’s road construction equipment business in China.
Group revenue grew 6% to $6.68 billion from $6.34 billion in the previous year, buoyed mainly by revenue contributions by the aerospace sector, which were 19% higher at $2.48 billion mainly due to contributions from its new subsidiary, Elbe Flugzeugwerke.
The electronics sector posted 10% higher revenue of $1.88 billion for FY16 as compared to $1.7 billion in the previous year.
However, revenue from the land systems sector fell 7% y-o-y to $1.3 billion from $1.4 billion in the previous year due to the one-off charge.
Revenue from the marine sector, too, fell 12% on-year to $841 million from $958 million in FY15 due to weaker shipbuilding performance in Singapore as well as the group’s US operations.
As such, ST Engineering’s FY16 profit before tax (PBT) dropped 6% to $590.6 million from $630.3 million in FY15.
The group’s ended the year with $11.6 billion of order book, of which $3.7 billion is expected to be delivered in 2017.
Cash and cash equivalents at the end of FY16 stood at $1.4 billion.
In a Thursday filing to the SGX before the market opened, the president and CEO of ST Engineering notes that excluding the one-off charge, group PBT and net profit for FY2016 would have been comparable to that in FY15.
Additionally, the group continues to expect FY17 revenue to be higher than that of FY16, while PBT is expected to exceed comparatively.
A final dividend of 10 cents per share has been proposed by ST Engineering’s board. Together with the interim dividend of 5 cents per share distributed last year in August, shareholders will receive a total dividend of 15 cents per share for FY16, unchanged from that of FY15, which translates to a yield of 4.81%.
Shares of ST Engineering closed 0.3% lower at $3.39 on Wednesday.
