UPDATE: ST Engineering reports 3Q19 net profit increased 3 percent

ST Engineering display at CommunicAsia conference in Singapore in 2019.ST Engineering display at CommunicAsia conference in Singapore in 2019.

This article was originally published on Monday, 11 November 2019 at 8:17 A.M. SGT; it has since been updated with more details.

ST Engineering reported Monday its third quarter net profit increased 3 percent on-year to S$139.1 million on contributions from MRAS.

Excluding the arbitration outcome from the Hornbeck Offshore Services’ claim, which included a S$14.2 million provision before tax, net profit would have been 12 percent higher at S$150.3 million, ST Engineering said.

CGS-CIMB had forecast net profit of around S$151 million.

Revenue for the quarter ended 30 September grew 27 percent on-year to S$2.07 billion, the defense company said in a filing to SGX.

“Amidst the trade tensions and geopolitical uncertainties which continue to weigh on the global economy, we continue to pursue growth areas, build capabilities, and integrate MRAS, Newtec and Glowlink into the group,” Vincent Chong, president and CEO of ST Engineering said in the statement.

Aerospace segment revenue increased 53 percent on-year in the quarter to S$1.1 billion, largely on the contribution from MRAS and on revenue from end-of-program reviews, the filing said.

Net profit for the segment was up 17 percent on-year to S$65 million as the higher revenue was offset by the absence of a year-ago divestment gain and asset impairment, ST Engineering said.

The electronics sector revenue rose 10 percent on-year to S$538 million on higher revenue from overseas mobility projects and software systems projects, the filing said. The segment’s net profit fell 7 percent on-year to S$51.5 million, largely on increased investments in new growth areas, ST Engineering said.

For the land systems sector, revenue rose 3 percent on-year to S$307 million, but net profit fell 14 percent on-year to S$15.1 million, mainly on a year-earlier tax credit and continued investments in robotics capabilities, ST Engineering.

Marine sector revenue increased 13 percent on-year to S$155 million on broad-based growth in the segment, while net profit for the quarter would have been 14 percent higher at S$14.6 million if the arbitration outcome was excluded, ST Engineering said.

ST Engineering said its order book was S$15.9 billion as of end-September, with around S$2.2 billion expected to be delivered within 2019.

 

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