ST Engineering targets new growth areas

Singapore Technologies (ST) Engineering is eyeing healthcare and medical technology as new areas for growth.

Chief executive Vincent Chong told a briefing yesterday that it is evaluating setting up a team to help develop other enterprises and ventures. This team could also handle the go-to-market phase of solutions from its open innovation lab, Innosparks, which was set up last year.

"With (an) ageing population around the world, we believe that healthcare and medical technology will continue to be a growth area for us," Mr Chong said. In particular, it is looking at ways to improve operational efficiencies in hospitals.

He added that the group will undergo a rebranding exercise from June whereby it will move away from its portfolio of brands - ST Aerospace, ST Electronics, ST Marine and ST Kinetics - to a unified approach under the "master brand" of ST Engineering. The group expects this will give it a stronger positioning as it goes out to the global marketplace.

Fourth-quarter net profit eased 1.1 per cent to $168.49 million, while revenue fell 6.5 per cent to $1.7 billion on the back of lower turnover across all sectors except for aerospace.

The group is proposing a final dividend of 10 cents a share to be paid on May 8. Together with the interim dividend of five cents, this brings the total dividend payout for the year to 15 cents.

  • AT A GLANCE

  • REVENUE: $6.62 billion (-1%)

    NET PROFIT: $511.9 million (+5.6%)

    FINAL DIVIDEND PER SHARE: 10 cents (unchanged)

Net profit for the full year rose 5.6 per cent year-on-year to $511.88 million, while revenue slipped 1 per cent to $6.62 billion as growth in the aerospace and electronics sectors was offset by declines in the land systems and marine sectors.

Earnings per share for the year rose to 16.43 cents, up from 15.6 cents previously, while net asset value was 71.89 cents, up from 70.20 cents as of Dec 31, 2016.

The group closed the year with an order book of $13.2 billion, about 14 per cent higher than the year before. About $3.8 billion of the orders are slated for delivery this year.

Growth from its core businesses will come from the A330 and A320 passenger-to-freighter conversion programmes and from demand for smart city solutions.

"Industry conditions for the marine sector are likely to remain weak in 2018," said Mr Chong.

ST Engineering shares closed up one cent to $3.39 yesterday.

A version of this article appeared in the print edition of The Straits Times on February 24, 2018, with the headline 'ST Engineering targets new growth areas'. Print Edition | Subscribe