ST Engineering Q1 revenue up 13% to S$2.3 billion on growth in most segments
Chong Xin Wei
ST ENGINEERING on Monday (May 15) reported revenue of S$2.3 billion for the first quarter, up 13 per cent from S$2 billion the previous year.
In a business update, the defence and engineering group said its topline growth came as revenue in most business segments booked improvements over the quarter, and from contributions from transportation solutions provider TransCore, which it acquired in 2022.
Its board has approved a Q1 interim dividend of S$0.04 per share, which will be paid out on Jun 6.
Revenue from the urban solutions and satellite communications segment rose 46 per cent to S$434 million from S$297 million the previous year, following higher TransCore project deliveries.
But the segment’s revenue growth for the first quarter was affected by supply chain disruptions and project delays, the group noted.
Its commercial aerospace business posted a 29 per cent on-year increase in revenue to S$873 million from S$674 million in Q1 2022, attributed to the recovery of the aviation sector as borders reopened.
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The group noted that its Q1 2023 revenue for the segment was higher than pre-Covid levels, as air travel recovered to more than 80 per cent of pre-Covid levels in January and February 2023.
Domestic travel reached near full recovery at 97 per cent, while international travel stood at 78 per cent, said the group. As China reopens, ST Engineering expects more growth in its commercial aerospace sector.
The group added that narrow-body aircraft production is expected to be strong over the next 10 years. ST Engineering manufactures nacelles for Airbus’ A320neo fleet, which is projected to see growth. (*see amendment note)
Defence and public security revenue fell 8 per cent to S$982 million, from S$1.1 billion in Q1 2022. Excluding Q1 2022 revenue from the group’s US marine business, the segment’s revenue was up 1 per cent from S$968 million.
In November last year, the group proposed to divest all of its US marine subsidiaries – VT Halter Marine and ST Engineering Halter Marine and Offshore – to Bollinger Shipyards Lockport for US$15 million.
The group said a total of S$4.9 billion worth of new contracts was secured over Q1, with defence and public security registering the highest value of deals at S$3.3 billion. Urban solutions and satellite communications won S$823 million worth of contracts, while commercial aerospace won S$747 million worth.
ST Engineering’s order book stood at S$25.4 billion as at end-March. The group expects S$5.8 billion worth of contracts to be delivered over the rest of 2023.
Shares of ST Engineering closed flat at S$3.65 on Friday.
*Amendment note: An earlier version of this article stated that a majority of ST Engineering’s total orders would come from its A320 fleet. ST Engineering has since clarified that it manufactures nacelles for Airbus A320 fleet, which is projected to see growth. The article above has been revised to reflect this.
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