ST Engineering bags over S$1.6b in new contracts in Q1

ST Engineering's aerospace and electronics segments secured more than S$1.6 billion in new contracts in the first quarter of 2020, with its land systems arm also securing a defence contract, the group announced on Monday after the market close.

About S$838 million in aerospace contracts were secured across the group's aviation manufacturing and MRO (maintenance, repair and overhaul) businesses. The MRO contracts included A320 heavy-maintenance contracts and engine-maintenance contracts from Chinese airline and a component maintenance-by-the-hour contract from a South-east Asian airline for its entire fleet of Boeing 737 and Bombardier Q400, as well as contracts previously announced during February's Singapore Airshow 2020.

The group's electronics segment secured about S$730 million in contracts for products and solutions in smart mobility, cyber security, data analytics, and training and simulation.

Its smart-mobility business clinched contracts related to metro systems in Chennai and Mumbai in India. In cyber security, multiple contracts were secured for the provision of security-operations centres, enhanced security monitoring services and cyber security advisory support for government, critical infrastructure and enterprise customers.

The data analytics business secured a contract with national water agency PUB to enhance and maintain its intelligent water management system, while the training and simulation business secured two contracts for supporting experiential learning needs.

In addition to the S$1.6 billion in new contracts, ST Engineering's Land Systems arm secured a Phase 2 contract for the production and supply of the Hunter Armoured Fighting Vehicle from Singapore's Ministry of Defence, as well as integrated logistics support including spares, training and documentation.

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"Outside of these contracts, there are others that the group has secured, but are not disclosed in this announcement for customer confidentiality reasons," said ST Engineering.

"Due to the Covid-19 pandemic and its evolving circumstances, the group is discussing with its customers to adjust delivery schedules or address order cancellations," it said, adding that its order book remained robust as at the end of the first quarter.

These developments are not expected to have any material impact on the group's consolidated net tangible assets per share and earnings per share for the current financial year, which ends Dec 31.

ST Engineering shares closed up five Singapore cents or 1.49 per cent at S$3.41 on Monday before the news.