STEng – BT
ST Engg to expand presence in US as Europe growth slows
Singapore Technologies Engineering, Asia’s largest aircraft-maintenance company by sales, wants to expand its presence in the US to make up for slower growth in Europe.
Sales to Europe-based customers fell 17 per cent last year, the only of its four geographic regions to post a decline, the Singapore-based company said in its earnings statement for 2010. Revenue from US customers increased 6.4 per cent, it said.
‘We are not a big player in the US, so there is lots of room to grow,’ said chief executive officer Tan Pheng Hock in an interview in Singapore on Monday. ‘Growth in Europe is still a little hard, short-term wise, especially when the outlook in Europe is still negative.’
European leaders are attempting to fix the region’s sovereign debt crisis. Standard & Poor’s said on Monday that the effort to pull Greece back from the brink with a rollover plan serving as the basis for talks between investors and governments would qualify as a distressed exchange and prompt a ‘selective default’ rating.
US manufacturing unexpectedly expanded at a faster pace in June, a sign the industry is rebounding after shortages of parts and components from Japan slowed production. The Institute for Supply Management’s factory index rose to 55.3 last month from 53.5 in May, according to data released last week. Economists estimated the index would drop to 52, according to the median forecast in a Bloomberg News survey. Figures greater than 50 signal expansion.
ST Engineering’s sales to European customers dropped to 4.8 per cent of its revenue in 2010 from 6.3 per cent in the previous year, while those from US clients were little changed at 24.2 per cent from 24.5 per cent, it said in the statement. Revenue from Asian companies made up 70 per cent of its overall sales, up from 68.3 per cent in 2009, it said.
‘We need to find the right niche to get into’ for the US market, Mr Tan said after speaking at the Future Global 100 Initiative forum in Singapore.
ST Engineering shares dropped 12 per cent this year, compared with the 1.2 per cent decline in the Singapore benchmark Straits Times Index. — Bloomberg