STEng – BT

ST Engg full-year net profit climbs 11%

Strong performance from all 4 business sectors; dividend of 11.55cts proposed

SINGAPORE Technologies Engineering (ST Engg) saw full-year net profit jump 11 per cent to $491 million from $443.9 million a year before, thanks to strong profit growth from all four business sectors – aerospace, electronics, land systems and marine.

Strong turnover growth from its land systems and marine sectors also lifted group revenue to $5.99 billion for the year ended Dec 31, 2010, 8 per cent up from $5.55 billion the year before.

Earnings per share thus grew 10 per cent to 16.21 cents, while net asset value rose from 52.09 cents at the end of FY09 to 53.38 cents as at end FY10. The group’s economic value added rose 21 per cent to $369.7 million.

ST Engineering’s board yesterday proposed a final dividend of 11.55 cents a share – made up of an ordinary dividend of 4 cents and a special dividend of 7.55 cents.

This means, adding the interim dividend of 3 cents a share paid in September 2010, a full year dividend of 14.55 cents – a yield of 4.36 per cent based on the average closing share price of the last trading day of 2010 and 2009.

For the full year, commercial sales came up to $3.5 billion, or about 59 per cent of turnover for the group, which also supplies equipment to the Republic of Singapore Armed Forces and other military customers.

The group’s cash and cash equivalents and short- term investments totalled $1.79 billion, including advance payments from customers of $1.53 billion.

ST Engineering said yesterday that higher project deliveries and the sale of specialty vehicles under ST Kinetics led to a 29 per cent increase in land systems’ turnover. ST Marine, the other business arm to record significant turnover growth of 10 per cent, crossed the billion dollar mark for the first time on the back of increased shipbuilding, ship repair and engineering activities. Revenue growth fuelled double-digit rise in profit before tax for both sectors.

Though revenue from the aerospace sector was flat year-on-year, profit grew as depreciation and finance costs fell. The electronics sector, too, was significantly more profitable despite marginal revenue growth, thanks to a favourable sales mix.

President and CEO Tan Pheng Hock yesterday said that ST Engineering invested more than $300 million in new capabilities and capacity across the four sectors in 2010.

He added that its strong order book of $11.5 billion ‘provides good visibility of the group’s future revenue stream’. About $3.7 billion of these orders are expected to be delivered within this year.

Mr Tan expects the group to achieve higher turnover and profit before tax this financial year than in the last. Revenue growth is expected in all but the aerospace sector, but all four sectors are expected to notch up higher profit before tax in FY11, compared to FY10.

ST Engineering closed a cent lower at $3.15 before its results were announced yesterday.

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