Singapore Technologies Engineering (ST Engineering) reported a revenue of $4.86bn, in the first six months (H1) of 2023, about 14% higher year-on-year (y-o-y) driven by higher contributions from all its three business segments.
The company reported group profit before tax (PBT) and group profit attributable to shareholders (Net Profit) at $351m and $281m respectively. In the same period last year, commercial aerospace segment recorded a one-off pension restructuring gain of $72 million.
The commercial aerospace segment of ST Engineering reported revenue of $1.86 bn, with a rise of 32% from $1.40 bn recorded same time last year. Despite a 3% y-o-y drop in EBIT to $178m, the group has reported a robust segment EBIT to reach its pre-COVID level supported by strong base operating performance. Excluding the one-off pension restructuring gain in 1H2022, EBIT improved by 60% y-o-y.
Commenting on the results, Vincent Chong, group president and chief executive said: “Our good performance in the first half demonstrated the strength and resilience of our business portfolio. This is reflected in the strong recovery of the Commercial Aerospace segment and the strength of the Defence & Public Security segment. Despite near-term challenges in our Satcom sub-segment, decisive steps are being taken to restructure and transform this business to be future ready. Consequently, we expect Urban Solutions & Satcom full-year 2023 segment EBIT to be comparable to 2022, supported by a significantly stronger second half 2023 for this segment. The target for TransCore to achieve earnings accretion from the second-year post acquisition remains.”
“We remain focused on delivering on our record order book of $27.7b to achieve growth and value creation for our stakeholders,” Chong added.
In the first half, commercial sales and defence sales accounted for $3.3b and $1.6b respectively of group revenue. As at June 30, 2023, the group held $387m in cash and cash equivalents.
In the second quarter (Q2), 2023, the group secured new contracts of around $4.7b, comprising $2.3 bn in commercial aerospace, $1.9b in defence & public security. The $2.3 bn commercial aerospace included passenger-to-freighter (P2F) conversion orders for A330P2F units, a multi-year airframe heavy maintenance contract from a Japanese airline to support its Boeing aircraft fleet, a three-year agreement with Safran Aircraft Engines to provide quick-turn maintenance offload support for LEAP-1A engines, and several component maintenance-by-the-hour (MBH) contracts from airline customers.
The Group ended 1H2023 with an order book of $27.7bn and it expects to deliver about $4.4bn from the order book in the remaining months of 2023.