ST Engineering reports 1Q19 net profit rose 11 percent on broad-based growth

Singapore five-dollar note Photo by Leslie Shaffer

ST Engineering reported Wednesday its first quarter net profit increased 11 percent on-year to S$131.1 million on a favorable sales mix.

UOB KayHian had forecast “low-to-mid single digit improvement” in ST Engineering’s earnings for the quarter.

Revenue for the quarter ended 31 March rose 5 percent on-year to S$1.73 billion, the company said in a filing to SGX before the market open.

Aerospace sector revenue rose 4 percent on-year to S$622 million, while net profit increased 6 percent to S$62.7 million for the quarter, the filing said.

“The increase was mainly attributable to higher revenue contribution from Component/Engine Repair and Overhaul and Engineering & Material Services business groups, partially offset by lower revenue from Aircraft Maintenance &Modification business group,” ST Engineering said.

The land systems sector posted a 34 percent on-year increase in revenue to S$377 million, but its net profit fell 3 percent on-year to S$15.2 million on the absence of a favorable tax finalization adjustment on an unfavorable sales mix and higher operating expenses in the robotics business, ST Engineering said.

The marine sector’s revenue slipped 1 percent to S$149 million as shipbuilding revenue fell, offset by better performance from ship repair and engineering. The segment’s net profit increased 38 percent on-year to S$12.0 million on improved U.S. shipbuilding performance, the filing said.

The electronics segment reported a 7 percent drop in revenue to S$563 million on a high base in the year-earlier period, it said. The segment’s net profit increased 8 percent on-year to S$43.4 million on a favorable sales mix and lower losses from associates and joint ventures, ST Engineering said.

“We had a good start to the year,” Vincent Chong, president and CEO at ST Engineering, said in the statement. “Our focus remains on strengthening our core businesses and pursuing growth in Smart City and in the international defense business.”

ST Engineering said its order book stood at S$14.1 billion at end-March, with around S$4.2 billion expected to be delivered this year.

Among the new contract wins, the land systems sector obtained its first seaport contract to supply 80 automated guided vehicles to Singapore’s container port operator, PSA Corp.

 

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