ST Engineering expects FY2020 revenue to fall 5-15%
Add BT as a preferred source
Vivienne Tay
SINGAPORE Technologies Engineering (ST Engineering) on Friday said it expects its revenue for the full year ending Dec 31, 2020 to be between 5 per cent and 15 per cent lower compared to fiscal 2019.
This is based on the company's current view amid the rapidly evolving Covid-19 situation and its impact globally, according to a business update for the first quarter ended March 31, 2020.
Due to the novel coronavirus impact, the group saw a reduction in customer demand, supply chain disruption and workforce disruption. These were mitigated by diversified revenue streams, efficiency and cost reduction initiatives, support from various government aids and stimulus packages, as well as a robust order book.
As at March 2020, the group's order book stood at S$16.3 billion. For the first quarter, the group secured more than S$1.6 billion in new contracts. Some S$4.5 billion is expected to be delivered in the remaining months of 2020.
ST Engineering is also in discussion with customers to adjust delivery schedules or address order cancellations.
The company said it will focus on sustainable long-term growth and capitalise on new demands arising from the novel coronavirus situation such as command and control, cybersecurity, sensors, robotics and unmanned systems, and more.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
It will also continue to strengthen its core businesses and enhance business resilience, maintain a strong liquidity position and "judiciously identify" mergers and acquisitions opportunities.
The company said it has a strong balance sheet and liquidity position, maintaining its triple-A rating. Its S&P rating stands at AAA/stable, while its Moody's rating is Aaa/stable.
ST Engineering said it has diverse funding sources such as the issue of US$750 million five-year notes with a 1.5 per cent coupon - which saw good investor response. It also has a US commercial paper programme for short-term debt, and existing loan facilities at competitive rates.
The group's shares ended at S$3.31 on Thursday, down S$0.04 or 1.2 per cent.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
