ST Engineering bags S$4.8 billion in Q1 contracts on Middle East defence, aerospace demand

[SINGAPORE] ST Engineering has secured S$4.8 billion in new contracts in the first quarter of 2026, buoyed by a surge in global defence spending and resilient aerospace demand.

The technology and defence conglomerate said on Monday (Apr 27) that half the new orders, or S$2.4 billion, came from its defence and public-security segment.

The commercial aerospace division brought in S$1.7 billion, and the urban solutions and satellite-communications (satcom) segment, the remaining S$700 million.

The first-quarter haul – up about S$400 million from the year-ago period – comes as global defence procurement ramps up amid escalating geopolitical frictions, such as the ongoing US-Israel-Iran war.

These contract wins will likely propel ST Engineering’s total outstanding order book to near-record highs, providing robust revenue visibility for the next two to three years.

Expanding Middle East footprint

The performance of the defence and public-security segment was driven by the group’s deepening foothold in the Middle East.

Key wins included a breakthrough into the Qatar defence market through a maintenance, repair, and overhaul (MRO) contract valued at about S$470 million.

The company also secured a six-year, S$600 million sub-contract from Abu Dhabi Ship Building to design and supply platform systems for the Kuwait Naval Force.

Amid the Middle East conflict, the land-systems business recorded a surge in new orders for 40 mm and 155 mm ammunition from various international customers.

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Domestically, the digital-systems business won several Singapore-based contracts to provide artificial intelligence-enabled, mission-critical command and control systems, high-performance graphics processing unit infrastructure and advanced training simulation suites.

The cyber division also secured mandates for advanced cybersecurity systems and secure data transfer products.

MRO renewals

MRO wins for the quarter included a renewal agreement to support an American airline with airframe heavy maintenance and cabin modifications for its Airbus fleet, as well as a heavy maintenance agreement for an unnamed global air freight operator’s Boeing fleet.

Engine MRO contracts included an agreement with China’s Xiamen Airlines to support its CFM LEAP-1A engines, which are used on the Airbus A320neo family. Component MRO deals included pacts with Japan’s Skymark Airlines for its Boeing 737 Max and 737NG aircraft.

Demand for engine nacelles and composite floor panels within the aero structures business “held up well”, the company noted.

Meanwhile, the freighter conversion unit secured contracts for two Airbus A330-300 passenger-to-cargo conversions from aircraft lessors Hengqin Winglet Aircraft Technology and Asia Pacific Aviation Leasing Group.

Shooting for the moon

Continued demand for smart-city infrastructure drove contract wins for rail electronics solutions for MRT lines in Singapore, a passenger information system for Taiwan’s Kaohsiung MRT Yellow Line, and smart road projects in the Middle East.

The segment’s tolling business secured back-office and maintenance contracts in the US, while its smart-utilities arm won mandates for a PUB building management system, integrated security solutions in Singapore, and doctor-on-call healthcare platforms in Hong Kong.

The satcom business won ground-segment infrastructure contracts from government integrators in Asia and Europe, as well as from satellite operators expanding their networks.

This came amid heightened space-sector interest, following the inaugural Space Summit at the Singapore Airshow in February, the establishment of the National Space Agency of Singapore in April and NASA’s Artemis II moon mission the same month.

ST Engineering noted that these Q1 contracts are not expected to have a material impact on its consolidated net tangible assets or earnings per share for the current financial year.

The company’s shares fell 2.5 per cent to close S$0.27 lower at S$10.75 on Monday, prior to the announcement.