Singapore Technologies Engineering (ST Engineering) has reported earnings of $280.0 million for the 1HFY2022 ended June, which is down by 5.4% y-o-y.
Revenue was up by 17% y-o-y to $4.27 billion in the same period as it saw growth across all segments.
Revenue for ST Engineering’s commercial aerospace segment rose 24% y-o-y to $1.40 billion as its aerospace maintenance, repair and overhaul (MRO) and aerostructure & systems sub-segments posted higher revenues driven by increased MRO services and nacelles delivery.
Revenue for the group’s urban solutions & satcom segment increased by 43% y-o-y to $757 million due to higher Smart City project deliveries, which includes contribution from its acquisition of TransCore.
Defence & public security revenue increased by 6% y-o-y to $2.11 billion due to contributions from land systems, digital systems & cyber and defence aerospace which posted y-o-y growth of 7%, 8% and 12% respectively.
Cost of sales was up by 17.7% y-o-y to $3.42 billion.
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Accordingly, gross profit stood 14.0% higher y-o-y at $848.9 million.
Profit from operations increased by 8.4% y-o-y to $360.3 million after distribution and selling expenses, administrative expenses, as well as other operating expenses increased, and offset by higher other income.
Group earnings before interest and tax (EBIT) increased by 8% y-o-y to $384.6 million due to stronger y-o-y operating performance backed by cost savings, which includes a one-off pension restructuring effect at ST Engineering’s commercial aerospace segment.
Excluding government support, the acquisition of TransCore including its integration expenses, as well as a one-time pension restructuring effect, group EBIT rose 45% y-o-y at $333 million.
Excluding the TransCore transaction and integration expenses of $16 million and tax-exempt effect of the jobs savings scheme of $11 million, group net profit would have been $307 million, 4% higher y-o-y, due to the strong base operating performance and cost savings.
“Despite a challenging operating environment in the first half of 2022, our businesses continued to demonstrate their underlying strengths and resilience. Year-on-year revenue growth and base business profitability, continued cost savings and productivity initiatives more than offset the substantial reduction of $125 million in government support,” says Vincent Chong, group president and CEO of ST Engineering.
“The TransCore acquisition, which was completed in March this year will accelerate the group’s Smart City growth. Contract win momentum remains strong, and our robust order book provides healthy revenue visibility for the next few years,” he adds.
As at June 30, the group’s order book stood at a robust $22.2 billion, of which it expects to deliver $4.6 billion from its order book in the remaining months of 2022.
A second interim dividend of 4 cents per share has been declared, and payable on Sept 2.
Cash and cash equivalents as at June 30 stood at $533.3 million.
Shares in ST Engineering closed 2 cents lower or 0.49% down at $4.07 on Aug 11.
