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ST Engineering Q2 profit up 10% to S$117.5m

SINGAPORE Technologies Engineering (ST Engineering) saw a rise in its second quarter net profit despite a drop in revenue for the period.

Profit attributable to shareholders rose 10 per cent to S$117.5 million from S$106.8 million a year ago after a 3 per cent drop in revenue to S$1.65 billion. The group attributed the fall in revenue to the absence of a one-time revenue increase for its electronics sector in the corresponding period last year from the modification of revenue recognition estimates from long-term contracts.

Earnings per share clocked in at 3.77 Singapore cents, up from 3.43 cents a year ago.

The group declared an unchanged interim dividend of 5 Singapore cents per share, which shareholders will receive on Aug 28, 2018.

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For the six months ended June 30, 2018, net profit was up 14 per cent to S$235.2 million year-on-year, while group revenue was S$3.30 billion, up from S$3.22 billion in H1 2017.

In a breakdown by sectors for the first fiscal half, ST Engineering's aerospace sector posted a 15 per cent rise in net profit to S$125.7 million on a 10 per cent increase in revenue to S$1.31 billion, while earnings for its electronics division gained 23 per cent to S$87 million on a 5 per cent rise in revenue to S$1.12 billion.

For its land systems sector, net profit was up 10 per cent to S$36 million, despite revenue falling 4 per cent to S$551 million. The marine sector's net profit jumped 168 per cent to S$17.9 million despite a 13 per cent dip in revenue to S$298 million, which ST Engineering said was mainly due to lower allowance for doubtful debts.

"Our aerospace and electronics sectors delivered strong Q2 2018 earnings. Our order book remained robust at S$13.4 billion, contributed by new orders including those in the Smart City spaces. On the whole, we are tracking well on our strategy of strengthening our core as well as actively pursuing growth opportunities in defence exports and Smart City projects," said ST Engineering's president and chief executive Vincent Chong.

ST Engineering's counter advanced 1.17 per cent, or four Singapore cents, to S$3.45 as at 11.06am on Wednesday.