STEng – BT

ST Engg’s Q1 profit up 13%

It posts net earnings of $122.5m on the back of an 8% rise in turnover

SINGAPORE Technologies Engineering (ST Engg) yesterday posted net earnings of $122.5 million for the first quarter ended March 31 – a 13 per cent increase from $108.8 million for the corresponding period last year. This came on the back of an 8 per cent rise in turnover to about $1.32 billion, from $1.22 billion in Q1 2007.

Earnings per share rose 11 per cent to 4.11 cents from 3.69 cents. Return on equity also rose to 7.1 per cent from 6.4 per cent.

‘Operationally, very robust,’ said ST Engg’s president and chief executive Tan Pheng Hock of the performance, pointing out that this was achieved in the face of a weaker US dollar and a lower interest rate environment. In addition, the group had to incur expenses for the Singapore Airshow in the first quarter this year.

The land systems sector saw the highest percentage increase in turnover as it raked in $364 million, a 22 per cent year-on-year jump. Turnover for the aerospace and electronics sectors also rose by 3 per cent to $469 million and 6 per cent to $245 million respectively but for marine, the turnover was flat at $198 million.

With Skybus Airlines filing for bankruptcy in April, ST Engg decided to adjust its order book to remove the Skybus contract. The group’s order book was $9.19 billion as a result. ST Engg expects to deliver about $2.89 billion of its order book for the rest of 2008. The group expects to achieve a modestly higher turnover and profit before tax in H1 2008 as well as FY2008, compared with H1 2007 and FY2007 respectively.

Sector-wise, ST Engg’s outlook for the aerospace and land systems sectors are bright, and it expects their H1 2008 turnover and profit before tax to be higher than that of the year-ago period. For electronics, the first-half results are expected to be comparable with those of H1 2007. And for marine, H1 turnover and pre-tax profit may be lower.

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