ST Engineering's Q2 net profit up 1.8% to S$127m

Singapore

SINGAPORE Technologies Engineering (ST Engineering) recorded a 1.8 per cent growth in its net profit to S$127.26 million for its financial second quarter ended June 30, 2016.

This came on the back of a 5.1 per cent increase in revenue to S$1.62 billion, ST Engineering said on Friday.

Earnings per share (EPS) was 4.10 Singapore cents, up from 4.01 Singapore cents one year ago. The company will pay out an interim dividend of five Singapore cents per ordinary share on Aug 30.

For the half-year, ST Engineering recorded a 6.9 per cent drop in net profit to S$237.46 million. This came despite revenue growth of 6.3 per cent to S$3.25 billion.

EPS for the six-month period was 7.65 Singapore cents, down from 8.19 Singapore cents one year ago.

ST Engineering's profit before tax (PBT) for for the second quarter was S$170.3 million, 7.4 per cent higher than one year ago.

Higher PBT from the electronics and land systems sectors were partially offset by lower PBT from marine sector. Aerospace sector reported comparable PBT while "others" recorded a lower loss.

A company spokeswoman said contribution from ST Engineering's new subsidiary, Elbe Flugzeugwerke, boosted second-quarter revenue for the aerospace sector to S$619 million, up 20 per cent from a year ago.

Revenue for the electronics sector was S$445 million, up 8 per cent.

During the quarter, the company's land systems sector revenue was down 11 per cent to S$283 million. Marine was also down, by 2 per cent to S$248 million.

Tan Pheng Hock, ST Engineering's president and CEO, said the company completed its divestment of Guizhou Jonyang Kinetics Co Ltd in the quarter, as part of the land systems sector's continuous review of its speciality vehicle business in China.

He added that the company continued to secure new orders and ended the quarter with a healthy order book of S$11.6 billion. ST Engineering's cash and cash equivalents, including funds under management, stand at S$1.3 billion.

Barring unforeseen circumstances, ST Engineering expects fiscal 2016 revenue to be higher but PBT to be lower, compared with last year.

Mr Tan said: "The global economic outlook remains challenging with industry headwinds facing the marine business, the slowdown in the China economy, and negative business sentiment that is prevalent in Europe and other parts of the world."