ST Engineering shares jump on plan for higher dividend for 2025, new dividend policy
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ST Engineering's new dividend policy will see it pay out about one-third of its annual increase in net profit as incremental dividends.
PHOTO: ST FILE
SINGAPORE – Shares of ST Engineering surged after the company said it plans to raise dividend payouts to shareholders in 2025, and from 2026 if revenue and profits continue to rise.
The shares, which have been charting a string of new record-highs in recent weeks, jumped 3.3 per cent to a fresh high of $6.53 shortly after the market opened on March 18. The stock closed at $6.38, up by almost 1 per cent.
ST Engineering plans to propose an increase in its total dividend to 18 cents per share for financial year 2025, up from 17 cents the previous year.
This was given “current robust retained earnings and a strong five-year outlook”, it said in an exchange filing on March 18. It announced record revenues of $11.28 billion and earnings of $702 million for 2024.
The planned 2025 dividend will comprise an interim dividend of 4 cents per share for each of the first three quarters of 2025, and a final dividend of 6 cents per share.
ST Engineering also announced a new dividend policy for FY2026 onwards. As it achieves progressively higher full-year earnings, it will pay out about one-third of its year-on-year increase in net profit as incremental dividends.
Chief executive Vincent Chong told the media at the company’s results briefing on Feb 28 that ST Engineering maintains a balance between returning profits to shareholders and retaining funds to deploy as fresh capital for growth.
In its March 18 statement, ST Engineering said it is “targeting further growth in revenue, operating cash flow and net profit with an objective to improve total shareholders’ return”. It intends to re-invest for growth while rewarding shareholders with dividends.
It added that it will continue to pay dividends every quarter.
At an investors’ event on March 18, ST Engineering’s chief financial officer Cedric Foo noted that several targets it had set for 2026 have been achieved. This included exceeding $11 billion in revenue, of which more than $3.5 billion was driven by the commercial aerospace division.
Mr Foo revealed a new set of targets to be achieved by 2029, including total revenues to the tune of $17 billion, backed by the defence and aerospace businesses, among others.
The company also expects its net profit to grow at a faster rate than its revenue over the period.
This will be done by scaling its existing businesses and improving its product and project mix to achieve better pricing power and productivity, and ultimately reduce costs, as well as lowering its debt levels to cut interest expenses, he said.
