ST Engineering Q3 profit slips 8%, hit by weak European operations

ST Engineering posted an 8 per cent dip in net profit to S$121.3 million for the third quarter from S$131.4 million a year ago, largely due to weak European operations.

Revenue was flat at S$1.553 billion from S$1.550 billion a year earlier, on the back of lower revenue in the aerospace business which offset the 14 per cent higher revenue from the marine sector.

The aerospace sector saw revenue fall 8 per cent to S$470 million due to lower revenue from the component and engine repair & overhaul business while revenues from electronics and land systems sectors were up one per cent and 2 per cent respectively.

"The weak economic environment in Europe had impacted our aviation business in the third quarter. We will continue to review the aerospace sector's European business," said ST Engineering president and chief executive Tan Pheng Hock.

Pre-tax profit in the aerospace operations slipped 19 per cent to S$63.5 million and was hit by weak European operations and restructuring costs as well as impairment for an associate. The slide offset the improvement in the electronics business where pre-tax profit rose 9 per cent to S$47 million.

The land systems and marine sectors reported comparable pre-tax profits over the period.

During the third quarter, commercial sales accounted for 58 per cent or S$900 million of revenue.

ST Engineering's order book stood at S$13.2 billion as at end-September, of which it expects to deliver about S$1.6 billion in the last quarter of 2014.

Earnings per share came in lower at 3.89 Singapore cents from 4.24 Singapore cents. No interim dividend was recommended for the period.