STEng – BT

ST Engineering enjoys 27% rise in Q4 profit

Revenue up 9%; proposes final dividend of 10.28 cents per share

ST Engineering posted a 27 per cent increase in its net profit for its fourth quarter ended Dec 31, 2009, from $102.3 million to $129.7 million, yesterday.

Revenue for the same period rose 9 per cent from $1.35 billion to $1.47 billion.

For FY2009, net profit dipped 6.3 per cent to $443.9 million even though revenue rose 3.8 per cent year-on-year to $5.5 billion.

A higher allowance for stock obsolescence in FY2009 – $48.7 million compared with $22.5 million in FY2008 – had been charged to the group’s profit from operations.

‘The group continued to secure contracts and replenish its book order which ended 2009 at $10.3 billion. Despite the ‘Great Recession’ in 2009, the group continued to invest in capacities and new capabilities across its global facilities, and added new customers,’ said Tan Pheng Hock, ST Engineering’s president and chief executive officer.

Out of that $10.3 billion, about $3.7 billion is expected to be delivered this year.

ST Engineering’s aerospace segment dipped 3 per cent in revenue to $1.87 billion year-on-year, because of lower turnover in its aircraft maintenance and modification and component/engine repair and overhaul business groups.

The group’s electronics sector grew the most in FY2009 compared to its other sectors, increasing 20 per cent from $1.1 billion to $1.37 billion in terms of turnover, boosted by milestone completions of the Circle Line project and sales of satellite communication products and electro-optics equipment.

Its land systems sector, however, shrank 8 per cent, from $1.3 billion to 1.2 billion over the same period, attributed mainly to lower sales from the automotive business group’s US operations.

Earnings per share stood at 14.74 cents per share for FY2009, down from 15.74 cents per share for FY2008.

A final dividend of 10.28 cents per share was proposed, compared with the 12.8 cents per share from the year before that.

Including the interim dividend of 3 cents per share, the total dividend for FY2009 will stand at 13.28 cents per share, compared with FY2008’s 15.8 cents per share.

The group expects to achieve a higher turnover and a comparable profit before tax figure for FY2010 compared with FY2009, barring unforeseen circumstances.

The group’s land systems and marine sectors look especially promising, with both their turnovers and profit before tax expected to be higher in FY2010.

‘If the economy picks up this year, we are well-poised to ride the market growth because of our well-established presence in several regions,’ said Mr Tan.

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