SINGAPORE (Feb 24): ST Engineering reported earnings of $169.5 million for 4QFY2019 ended December, some 36.2% higher than earnings of $124.5 million a year ago.
As a result, the group’s full-year earnings was lifted to $577.9 million, a 16.9% increase from FY2018’s earnings of $494.2 million.
Revenue for the quarter saw a 29% spike to $2.29 billion from $1.77 billion in 4QFY2018 due to stronger contributions across most of the group’s segments, as well as contributions from its recent acquisitions.
The aerospace sector reported a 45.3% increase in revenue to $941.0 million for the quarter on the back of MRAS’ contribution and revenue recognised from various end-of-programme reviews, while the marine sector saw revenue increase 47.2% to $204.1 million mainly due to better performance of its US operations.
The electronics and land systems segments, too, reported y-o-y increases of 28% and 3.2% respectively. However, the increases were partially offset by a 46.7% decline in the group’s others segment.
ST Engineering’s new contracts announced for FY2019 stood at $8 billion, including the contract for one unit of Polar Security Cutter worth $1 billion. For 4QFY2019 alone, the group had reported new contracts totalling to $1.5 billion.
Cumulatively, the group ended the year with an order book of $15.3 billion, of which $5.9 billion is expected to be delivered in FY2020.
As at end-December, cash and cash equivalents stood at $452.1 million.
Earnings per share came in at 18.53 cents as at Dec 31.
The group is also proposing a final dividend of 10.0 cents per share. In addition to the interim dividend of 5.0 cents per share distributed in September 2019, shareholders will receive a total dividend of 15.0 cents per share for FY2019, unchanged from FY2018. Payment of the final dividend is subject to the approval of the company’s shareholders at the forthcoming annual general meeting.
In an outlook statement, CEO of ST Engineering Vincent Chong noted that the group’s three acquisitions had strengthened the group’s position for the future. These were namely the acquisitions of MRAS in April 2019, Glowlink in September 2019 and Newtec in October 2019.
“The group’s focus in executing its strategy in 2019 produced a good set of financial results. In addition to achieving double-digit revenue and profit growth, we made three strategic acquisitions to strengthen the Group’s position for the future,” says Chong. “We also recorded a strong order book which provides near-term revenue visibility,” he adds.
In line with the Singapore Exchange's adoption of a risk-based approach to reporting, and the application of quarterly reporting requirements only for companies associated with “higher risks”, ST Engineering will henceforth publish its financial results on a half-yearly basis.
"The group will also augment its half-yearly financial results with relevant operating information on a quarterly basis," says the group.
Shares in ST Engineering closed three cents lower, or 0.7% down, at $4.24 on Friday.
