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ST Engineering's marine arm secures S$431m worth of contracts in Q3

ST Engineering announced on Tuesday that its marine sector secured about S$431 million worth of contracts in the third quarter, including options for its shipbuilding business, as well as the ship and rig repair segments for progressive deliveries at its yards in Singapore and the US.

In the US, the Naval Sea Systems Command has awarded its US shipyard a contract, including options worth US$244 million for the detailed design and construction of two firm and up to four optional Auxiliary Personnel Lighter Small APL Class Berthing Barges. The anticipated delivery periods of the two firm vessels are in the second and third quarter of 2020 respectively. The options for the four vessels could be exercised for delivery during fiscal years 2019 to 2022.

In addition, Bouchard Transportation Co, a long-standing customer, has awarded its US shipyard a US$30 million new build contract for one firm Articulated Tug Barge and an option for a second vessel to be exercised within 1Q2019.

For the ship and rig repair business, it secured contracts worth about S$35 million for both commercial and naval projects. Its US repair business, situated next to its shipbuilding Pascagoula yard, has gained traction for new orders as it continues to cross-sell its repair and maintenance services to an expanded pool of customers.

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These contracts secured range from repair of dredgers, offshore vessels, and oil and chemical tankers, to high engineering content conversion of an anchor handling tug supply vessel to carry methanol instead of cement.

The sector also secured its first refit on a naval platform for a foreign navy with operations in the Indo-Pacific region. On the chartering front, the Nova Star, a Roll-on/Roll-off Passenger Vessel, has been leased for a 24-month bareboat charter and is currently deployed for service between Baltic Sea and North Sea.

These contracts are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.