ST Engineering posts 14% fall in H2 profit

SINGAPORE Technologies Engineering (ST Engineering) posted on Friday a 14 per cent fall in net profit for the half year ended Dec 31 to S$264.4 million from S$308.6 million a year ago.

Revenue for H2 FY2020 also slipped 18 per cent to S$3.6 billion from S$4.4 billion. ST Engineering said this was largely due to Covid-19, which led to a reduction in customer demand, supply chain challenges and workforce disruption.

Earnings per share for the full year was also lower at 16.74 Singapore cents, down from 18.53 cents last year.

Net profit for the full year fell 9.7 per cent, to S$521.8 million from S$577.9 million, while revenue for FY2020 dipped 9 per cent to S$7.16 billion from S$7.87 billion the previous year.

A final dividend of 10 Singapore cents per share was declared for the half year. Combined with an interim dividend of five cents, this brings the full-year dividend to 15 cents. The final dividend will be paid out on May 7, after books closure on April 29.

The aerospace sector performed the worst among all its business arms, registering a 28 per cent fall in FY2020 net profit to S$192.9 million from S$268.9 million for the previous year.

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Group president and chief executive officer of ST Engineering Vincent Chong said he expects the downtrend to continue in 2021. 

"The aviation industry remains subdued and is unlikely to recover to pre-pandemic levels in 2021," said Mr Chong. 

"Nevertheless, we are focusing on delivering our order book, seizing new opportunities in areas like freighter conversions and cybersecurity. With partial revenue recovery, when combined with savings from our cost reduction initiatives, we target to offset the effects of lower government support in 2021."

Shares of ST Engineering last traded at S$3.74, down 0.8 per cent or S$0.03 at Thursday's closing.