ST Engineering posts 18.1% rise in Q1 revenue to S$2.7 billion

ST Engineering posted an 18.1 per cent rise in group revenue to S$2.7 billion for the first quarter ended Mar 31, 2024, it said in a business update.

The group attributed the gain to higher contributions from its commercial aerospace as well as defence and public security segments, which recorded double-digit revenue growth.

It has declared an interim dividend of S$0.04 per share for the quarter, payable on Jun 5 after the record date on May 23.

Commercial aerospace revenue was up 32 per cent to S$1.2 billion from S$873 million on broad-based growth. Notably, the group’s engine maintenance, repair and overhaul (MRO) operations registered strong growth.

This segment had “all engines firing” this quarter according to Jeffrey Lam, president, commercial aerospace, ST Engineering. The segment was able to ride on increased flying hours as well as slower-than-expected new engine introductions.

“Generally speaking you also saw that February 2024, air traffic growth has exceeded pre-Covid, so we are seeing the whole market recovering strongly across all segments,” he said.

ST Engineering’s defence and public security unit posted a 14 per cent year-on-year revenue increase to S$1.1 billion from S$982 million. There was growth in all sub-segments, with the group’s digital business well-positioned to exceed its 2026 revenue target.

In contrast, revenue from its urban solutions and satellite communications (satcom) segment slipped 1 per cent to S$429 million from S$434 million in the same period last year.

The group obtained S$3 billion in new contract wins during the quarter. Its defence and public security segment recorded the highest contract value at S$1.7 billion, followed by its commercial aerospace segment, which bagged S$839 million in contracts.

The urban solutions and satcom business, meanwhile, recorded S$542 million in new contracts.

The digital business, comprising of cloud, artificial intelligence analytics and cybersecurity is expected to exceed the 2026 revenue target of S$500 million. Revenue growth for the last two years have grown over two-and-a-half times, said Ravinder Singh, president, defence and public security, ST Engineering, with Q1 2024 revenue at S$147 million.

“Generally, the momentum for digital business is strong,” he said.

ST Engineering currently has about 550 cybersecurity specialists and about 300 cloud and AI engineers. The company will grow the number of cloud and AI engineers to “at least 500” added Singh, as it focuses on talent development as well as product innovation.

ST Engineering shares closed 1.8 per cent or S$0.07 higher at S$3.98 on Friday.