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ST Engineering Announces S$600m Bounty

Ser Jing - ST Engineering First Quarter Results, Unchanged Revenue and Profit (pic)Singapore Technologies Engineering Ltd (SGX: S63) announced that its Aerospace arm, Singapore Technologies Aerospace Ltd, has secured new orders worth S$600m in the third quarter.

This comes hot on the heels of last week’s announcement in which the company boasted a haul of S$413m worth of new contracts for its Electronics arm.

ST Engineering, a Singapore-based engineering firm, consists of four businesses, namely Aerospace, Electronics, Land Systems, and Marine.

The new orders for the Aerospace arm “involve projects ranging from airframe, component and engine maintenance, to commercial airline cabin retrofit and freighter conversions.”

In the freighter conversion category, there was an order for 17 passenger-to-freight (PTF) conversions. The company now has 119 aircrafts contracted for the Boeing 757-200 PTF conversion programme.

ST Aerospace commented that its capture of a reconfiguration project for two Boeing 767-300 airplanes is an affirmation of its “expertise in providing complete turn-key solutions.”

The European Aviation Safety Agency has also recognised the company’s work in cabin retrofitting with the award of a Supplemental Type Certificate for a project involving six A330 aircrafts for an international carrier.

Besides announcing the big contract-wins, ST Aerospace also took time to highlight some operational numbers for the third quarter, which includes the redelivery of five Boeing 757-200 converted freighters and 245 aircrafts that underwent airframe maintenance and modification work.

Not intending to rest on its laurels, ST Aerospace had been “implementing market expansion strategies in the engine leasing and pilot training sectors.” These strategies include the setting up of a specially designed Airbus A320 simulator that can support the Multi-Crew Pilot License (MPL) Phase II training. The company’s “the first in Singapore to develop the MPL Programme.”

Over the past five years, ST Engineering has returned 71%, beating the Straits Times Index’s (SGX: ^STI) 69% return in the same period by a hair’s breadth.

From 2007 to 2012, ST Aerospace has been a drag on ST Engineering’s overall corporate results as pre-tax profits for the former has decreased from S$341m to S$304m. Investors ought to keep track of the Aerospace arm’s business progression as its growth could help the company widen its lead over the STI in the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.