Thursday, February 23, 2012

ST Engineering Results - 23 February 2012

Singapore, 23 February 2012 - Singapore Technologies Engineering Ltd (ST Engineering) today reported revenue for financial year ended 2011 (FY2011) of $5.99b, compared with $5.98b a year ago. Profit before tax (PBT) registered a 4% growth to $655.2m, while net profit grew steadily by 7% to $527.5m.

In the fourth quarter, Group's revenue of $1.54b was higher than that achieved in 3Q2011 by 11% or $150m. Except for Marine sector, all sectors recorded higher revenue compared to 3Q2011. Marine sector's revenue of $91m was 64% or $164m lower, largely due to the reversal of Shipbuilding revenue in 4Q2011 following the Ropax contract termination. Group's PBT of $184.3m for 4Q2011 was 11% or $18.4m higher than that achieved in 3Q2011. Land Systems and Marine sectors reported higher PBT, while Aerospace and Electronics sectors recorded lower PBT.

Compared to 4Q2010, 4Q2011 revenue and PBT were comparable while net profit was higher by 6%.

Higher EPS and Higher Dividend
Earnings per share (EPS) grew by 7% to 17.28 cents and economic value added increased by 10% to $405m. Return on equity remained high at 29.9%. Cash and cash equivalents and short term investments totalled $1.77b and advance payments from customers stood at $1.27b.

The ST Engineering Board of Directors is proposing a final dividend of 12.50 cents per share, consisting of an Ordinary Dividend of 4 cents per share and a Special Dividend of 8.50 cents per share. Total dividend amounts to 15.50 cents per share, including the Interim Dividend of 3 cents per share paid out in September 2011. This translates to a dividend yield of 5.07%, computed using the average closing share price of the last trading day of 2011 and 2010.

"The Group registered steady performance in FY2011 over FY2010. While Revenue was flat at $6b, PBT increased by 4% and Net Profit grew by 7% to $527.5m. The performance reflects the Group's resilience and its ability to navigate the highly uncertain and volatile economic environment. The Group succeeded in securing more contracts and ended the year with a record high order book of $12.3b.

Barring unforeseen circumstances, the Group expects to achieve higher Revenue and PBT in FY2012 compared to FY2011." ~ TAN Pheng Hock, President & CEO, ST Engineering

Full Year Business Highlights
For the full year, commercial sales accounted for 59% or $3.5b of revenue. The Group grew its order backlog to a record high of $12.3b, an increase of 7% over FY2010 order backlog of $11.5b. $3.9b of the $12.3b order backlog is expected to be delivered in 2012.

With revenue of $1.9b, the Aerospace sector accounted for 32% of Group's revenue. The Electronics sector contributed 25% to the Group based on its revenue of $1.48b, which grew 7% year-on-year. Land Systems sector contributed $1.48b or 25% of Group's revenue, while the Marine sector's revenue of $876m accounted for 14%.

All business sectors achieved significant milestones over the last year.


Aerospace sector was ranked the world's largest maintenance, repair and overhaul provider for the 5th consecutive time by leading trade publication, Overhaul & Maintenance.
Electronics sector entered the high-tech satellite industry offering comprehensive suite of satellite earth observation solutions and services. Its US subsidiary, iDirect Government Technologies, received the US government's approved Proxy Agreement to pursue classified Government and military contracts.
Land Systems sector, through LeeBoy India, stamped its mark on the Indian road construction sector with the launch of its 785i Motor Grader that was engineered and manufactured in India to international standards based on its access to technologies of its US subsidiary, VT LeeBoy.
Marine sector gained a stronger foothold in the Offshore Support Vessels market securing contracts for 12 vessels.
In 4Q2011, the Group announced new contracts worth over $1.26b for its Aerospace, Electronics and Marine sectors. This included the shipbuilding contract to build eight Offshore Supply Vessels for Hornbeck Offshore Services; several naval contracts, and commercial shiprepair and conversion contracts; as well as a LRT communications contract in Taiwan. It also included the five-year contract that ST Synthesis, its facilities management arm secured to provide facilities maintenance services to the Singapore Ministry of Defence. In addition, its US subsidiary, VT Miltope announced that it has the potential to earn up to US$250m (about S$323.7m)* over five years on its teaming with General Dynamics C4 Systems on the Common Hardware Systems-4 programme.

* As this is an IDIQ contract, the amount is not recorded in the order book.

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