SINGAPORE – Singapore Technologies Engineering (ST Engineering) on Monday reported revenue of $2.3 billion for the first quarter, up 13 per cent from $2 billion in the previous year.
In a business update, the defence and engineering group said its top-line growth came as revenue in most business segments booked improvements over the quarter, and from contributions from transport solutions provider TransCore, which it acquired in 2022.
The group’s board has approved an interim dividend of four cents per share, which will be paid out on June 6.
Revenue from the urban solutions and satellite communications segment rose 46 per cent to $434 million from $297 million in the previous year, following higher TransCore project deliveries.
But the segment’s revenue growth for the first quarter was affected by supply chain disruptions and project delays, the group noted.
Its commercial aerospace business posted a 29 per cent year-on-year increase in revenue to $873 million from $674 million, attributed to the recovery of the aviation sector as borders reopened.
The group noted that its first-quarter revenue for the segment was higher than pre-Covid-19 levels as air travel recovered to more than 80 per cent of pre-pandemic levels in January and February 2023.
Domestic travel reached near full recovery at 97 per cent, while international travel stood at 78 per cent, said the group. As China reopens, ST Engineering expects more growth in its commercial aerospace sector.
The group added that narrow-body aircraft production is expected to be strong over the next 10 years. ST Engineering manufactures nacelles for Airbus’ A320neo fleet, which is projected to see growth.
Revenue from its defence and public security segment fell 8 per cent to $982 million from $1.1 billion previously. Excluding revenue from the group’s United States marine business, the segment’s revenue was up 1 per cent from $968 million.
In November 2022, the group proposed divesting its US marine subsidiaries – VT Halter Marine and ST Engineering Halter Marine and Offshore – to Bollinger Shipyards Lockport for US$15 million (S$20 million).
The group said new contracts worth $4.9 billion were secured over the first quarter, with the defence and public security segment registering the highest value of deals at $3.3 billion. Urban solutions and satellite communications won $823 million worth of contracts, while commercial aerospace snagged $747 million worth.
ST Engineering’s order book stood at $25.4 billion as at end-March. The group expects $5.8 billion worth of contracts to be delivered over the rest of 2023.
Shares of ST Engineering closed at $3.62, down 0.82 per cent, on Monday. THE BUSINESS TIMES
Correction note: An earlier version of this article stated that a majority of ST Engineering’s total orders would come from Airbus’ A320 fleet. ST Engineering has since clarified that it manufactures nacelles for Airbus’ A320neo fleet, which is projected to see growth.
