ST Engineering Delivers Strong 1H2024 Financial Performance

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• Robust Order Book of $27.9b as at end June 2024, of which about $4.9b is expected to be delivered in the remaining months of 2024
• 1H2024 Commercial sales and defence sales¹ constituted $3.9b and $1.6b respectively
• Cash and cash equivalents as at end June 2024 of $430m

N.B.: All currencies are in Singapore dollars

ST Engineering 1H2024 Financial Statements, ST Engineering Results Presentation 1H2024

Singapore, 14 August 2024 - Singapore Technologies Engineering Ltd (ST Engineering) today reported its first half-year financial results ended 30 June 2024 (1H2024). 

The Group posted a revenue of $5.52b for the first half of 2024, a 14% growth year-on-year (y-o-y) from $4.86b, driven by higher contributions from all three business segments. Group EBITDA was $786m, up 11% y-o-y from $711m.  Group EBIT increased by 18% y-o-y to $523m from $444m, and Group Profit before tax (PBT) was 19% higher y-o-y at $416m from $351m.  Group Profit attributable to shareholders (Net Profit) rose to $337m, reflecting a 20% improvement from $281m a year ago.

Business Segments: 1H2024 Revenue and EBIT
Commercial Aerospace (CA): Revenue grew strongly at 20% y-o-y to $2.23b from $1.86b driven by higher revenues from Aerospace MRO and Aerostructures & Systems sub-segments. EBIT was $190m, up 7% y-o-y from $178m, contributed by higher revenue, partially offset by lower contribution from significantly lower aircraft sales, project timing and sales mix.  

Defence & Public Security (DPS): Revenue grew 12% y-o-y to $2.37b from $2.12b, with the increase largely driven by its Digital Systems & Cyber and Marine sub-segments, even as Defence Aerospace and Land Systems sub-segments recorded higher revenues y-o-y.  EBIT increased by 8% y-o-y to $324m from $301m.

Urban Solutions & Satcom (USS): Revenue was $918m, 3% higher y-o-y from $891m, attributed to higher revenue from Urban Solutions sub-segment (which includes TransCore), offset by lower revenue from Satcom sub-segment. The segment posted an EBIT of $9m, compared to a loss of $34m a year ago, helped by business growth, cost savings and the absence of Satcom one-off loss² incurred in the prior year. 

The Satcom team’s proactive measures on cost management and operational efficiency have helped mitigate the effects of lower sales volume on Satcom’s base operating EBIT performance, which remained flat versus 1H2023.

“We posted strong revenue and profit growth in the first half of 2024.  Despite continuing challenges in the operating environment, we see opportunities in aerospace, smart city, defence and public security industry domains.  Given these opportunities, and supported by a robust order book, we remain confident in achieving long-term sustainable growth.”

Vincent Chong, Group President & CEO

In the first half, commercial sales and defence sales accounted for $3.9b and $1.6b respectively of Group revenue.  As at 30 June 2024, the Group held $430m in cash and cash equivalents. 

New Contract Wins and Order Book 
The Group secured $6.1b of new contracts for 1H2024, including $3b announced for 1Q2024.  In 2Q2024 alone, the Group won $3.1b in new contracts, comprising $1.29b for Commercial Aerospace, $0.96b for Defence & Public Security and $0.81b for Urban Solutions & Satcom.  

Commercial Aerospace clinched new contracts and received strong orders across its MRO and manufacturing businesses. New contracts include a two-year agreement announced in July to provide Safran Aircraft Engines with engine module repair offload support for CFM LEAP engines, a three-year contract extension for LEAP-1B quick-turn maintenance offload services also with Safran Aircraft Engines, and an airframe heavy maintenance contract to service A320s for an Asian airline. 

Defence & Public Security won new contracts for its NATO standard 155mm and 40mm ammunition from European customers, including over $100m from contracts that were announced in June.  It also won a contract for the supply of four ExtremV All Terrain Tracked Vehicles to a customer in Asia.  There were also new orders for its suite of Digital solutions including an integrated Battlefield Management System and a 360° Situational Awareness System for an Asian customer, on-premises cloud solution, integrated communications systems for vehicles, as well as cybersecurity systems. Its Marine business received new orders for ship repair services from commercial and naval customers, including ongoing support for U.S. Naval Ships. 

Urban Solutions & Satcom secured contracts from global customers across its business lines. Highlights from Urban Solutions include smart mobility contracts to supply its Passenger Information System in Australia, rail digital radio system upgrade for Taipei Metro in Taiwan, bus fleet maintenance management system in Singapore, as well as multi-year contracts for electronic toll collection systems including with the Delaware River Port Authority, O&M and RFID sales in the U.S. and Middle East, and an Intelligent Transportation System for the Missouri Department of Transportation. Smart utilities and infrastructure contracts include a smart lighting project for a leading international airport in Southeast Asia and integrated smart security management solutions in Singapore.  Satcom secured ground infrastructure contracts for the aviation, enterprise, mobility and government segments in North and South America and Europe.

The Group ended 1H2024 with an order book of $27.9b and it expects to deliver about $4.9b from the order book in the remaining months of 2024. 

Interim Dividend
The Board of Directors has approved a second interim dividend of 4.0 cents per ordinary share. Shareholders will receive the payment on 5 September 2024. 

Notes:
¹Refers to Group revenue by products and services type
²Satcom one-off loss of $26m comprising SatixFy divestment loss and severance costs

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Lina Poa
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ST Engineering
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