In its 3QFY2020 business update released on Nov 18, Singapore Technologies Engineering (ST Engineering) says it expects its revenue for the FY2020 to be “close to the midpoint” of its expected 5% to 15% decline from its figures posted in FY2019.
The company posted its revenue guidance previously on Aug 14, 2020.
During the quarter, its Aerospace and Electronics sectors secured a total of $1.7 billion worth of new orders.
Aerospace netted $0.6 billion in 3QFY2020 and a total of $2.0 billion for the 9MFY2020 while Electronics brought in $1.1 billion in the quarter, and a total of $2.3 billion year-to-date ended September.
The value excludes new contracts by the Land Systems and Marine sectors.
The group says its order book remains robust, with a total of $15.8 billion secured as at Sept 2020.
For the Aerospace business sector, the group says the recovery of domestic travel bodes well for its narrowbody maintenance, repair and overhaul (MRO) work. It also expects more workload from freighter carriers as cargo traffic remains strong.
Its passenger-to-freighter (PTF) conversion sees limited belly load capacity that sustains demand for dedicated freighters, as fleet retirements add to feedstock availability.
In Electronics, the group says it sees a gradual pick-up in business activities across the sector, as its defence and government projects resume.
The demand for satcom ground infrastructure remains low but launches of its next-gen MEO and LEO constellations “present new opportunities”.
Under Land Systems, its defence land platform business remains “steady” with ongoing productivity improvements while in its Marine segment, the group is seeing 100% workforce back at its yards in Singapore.
The group says it will maintain its “sharp focus” to improve US yard performance.
ST Engineering says its balance sheet and liquidity position remain “strong” with a healthy level of retained earnings to sustain dividend payout.
Looking ahead, it is looking to target to offset the effect of relying on lower level of government support in 2021.
On Nov 17, the group says it will be reorganising itself into two main units – commercial and defence, and public security – from its previous land, sea, air and electronics-based structure.
See: ST Engineering unveils new organisational structure
Shares in ST Engineering closed 2 cents higher or 0.5% up at $3.80 on Nov 17.
