ST Engineering Q3 profit up 5% to S$134.6m

THIRD-QUARTER net profit for Singapore Technologies Engineering (ST Engineering) went up by 5 per cent as improved bottomline contributions from aerospace, electronics and land systems more than offset declines seen in two other divisions.

ST Engineering posted a net profit of S$134.59 million for the three months ended Sept 30, compared to S$127.82 million for the corresponding quarter the year before.

Earnings per share for Q3 was 4.32 Singapore cents, up from 4.11 Singapore cents for the year-ago period.

Third-quarter revenue rose 1 per cent to S$1.63 billion.

Nine-month net profit was 10.5 per cent higher at S$369.79 million.

Aerospace contributed S$55.4 million in net profit for Q3, 13 per cent higher largely on a gain from the partial divestment of an associate and higher gross profit.

Electronics expanded its Q3 net profit by 30 per cent to S$55.5 million, supported by higher revenue and lower operating expenses.

Third-quarter net profit for land systems also advanced, by 45 per cent to S$17.6 million, mainly driven by favourable sales mix and lower tax expense.

Conversely, the group posted a 35 per cent decline in Q3 net profit from its marine division while its other businesses slipped into a Q3 net loss of S$6.7 million.

Third-quarter revenue contributions for aerospace and electronics went up by 13 per cent and 2 per cent respectively, more than offsetting declines of between 10 per cent to 50 per cent in contributions from land systems, marine and other businesses.

The group flagged its proposed acquisition of General Electric's MRA Systems, LLC (MRAS) for about US$630 million as a key highlight for the third quarter.

It said that this business will scale up its aerospace capabilities by moving the group upstream into the OEM business of high-value components.

It also expects to complete the acquisition in the first quarter of 2019.

The group's order book stood at S$13.3 billion as at Sept 30, with about S$1.6 billion expected to be delivered in the remaining months of 2018.

ST Engineering's shares last changed hands at S$3.46 on Tuesday, down four Singapore cents.