ST Engineering’s Q1 revenue up 13% to S$2b; declares S$0.04 per share dividend

ST ENGINEERING : S63 0% on Friday (May 13) reported revenue of S$2 billion for the first quarter ended March 2022, up 13 per cent year on year and returning to pre-Covid levels.

Its board has approved a Q1 interim dividend of S$0.04 per share which will be paid out on Jun 7, 2022.

In a business update, the defence and engineering group said its topline growth came as revenue in all business segments booked improvements over the quarter.

Commercial aerospace saw a 22 per cent on-year increase in revenue to S$674 million from S$552 million in Q1 2021, attributed to the gradual recovery in MRO (maintenance, repair and overhaul) demand as well as the reopening of borders.

Signalling strong passenger-to-freighter demand, the group said its A320/A321P2F and A330P2F aircraft have been booked through 2025 and 2026, respectively.

Revenue from the urban solutions and satellite communications segment rose 12 per cent to S$297 million from S$264 million the previous year due to higher Smart City project deliveries. The revenue figures for both comparative periods were notably higher than S$236 million in revenue for Q1 of 2020, before Covid-19.

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Defence and public security revenue rose 9 per cent on-year to S$1.1 billion to exceed pre-Covid levels, which the group said was due to strong growth from its digital systems and cyber business.

A total of S$2.4 billion worth of new contracts were secured over Q1, with defence and public security registering the highest value of deals at S$1.3 billion. Commercial aerospace saw S$900 million in contract wins, while urban solutions and satellite communications won S$200 million worth of contracts.

ST Engineering’s order book stood at S$21.3 billion as at end-March, including S$1.6 billion from US-based transportation technology company TransCore, whose acquisition was completed on Mar 17, 2022.

The group estimates the TransCore acquisition to bear a weighted average financing cost of about 1.8 per cent for the first year. US$32 million of gains from its recent financing exercise related to the acquisition will be held in the group’s balance sheet reserves to reduce yields from future bond issues.

Shares of ST Engineering ended Thursday S$0.01 or 0.3 per cent lower at S$3.98.