Quick Highlights From Singapore Technologies Engineering Ltd’s Latest Earnings

Ser Jing - ST Engineering First Quarter Results, Unchanged Revenue and Profit (pic)

Singapore Technologies Engineering Ltd (SGX: S63) is an integrated engineering conglomerate which provides solutions and services to the Aerospace, Electronics, Land Systems and Marine sectors. It boasts over 100 subsidiaries and associated companies in 46 cities across 24 countries and has a workforce of more than 23,000 employees globally. A competitor in the aerospace sector is SIA Engineering Company Limited (SGX: S59), which is part of Singapore Airlines Ltd. (SGX: C6L).

ST Engineering released its second quarter earnings this morning before the market opened. Let’s take a look at what had transpired.

The firm earned quarterly revenue of S$1.6 billion, unchanged from a year ago. Higher revenue was recorded by the Aerospace, Electronics, and Marine sectors but growth was more than offset by lower revenue from the Land Systems sector, which dipped by 25% year-on-year.. The Aerospace, Electronics, and Marine sectors saw their revenues increase by 6% to 12% compared to a year ago. The Aerospace sector happened to be the main driver for ST Engineering as it was the main contributor to the company’s revenue with a 33.9% share.

Moving down the bottom line, ST Engineering’s net profit for the quarter came in at S$133.2 million, some 10% lower than the previous year. Most of the company’s sectors (except for Electronics) had reported lower pre-tax profit on the back of higher operating expenses. This caused ST Engineering’s total pre-tax profit to drop by 12% from a year ago, ultimately resulting in the 10% decline in bottom-line.

For the first-half of 2014, ST Engineering’s revenue was flat at S$3.1 billion while profit dipped 4% to S$281.9 million.

The company’s cash balance, as of 30 June 2014, stood at S$1.6 billion. ST Engineering had total borrowings amounting to S$982.5 million, which translates into the company having a net cash position of S$618 million. An interim ordinary dividend of S$0.04 per share will be dished out to shareholders. This is an improvement of 33% over the dividend of S$0.03 per share paid out in the second quarter last year.

Regarding ST Engineering’s future outlook in the near-term, Mr. Tan Pheng Hock, President and Chief Executive Officer of the firm, had the following quip:

“Barring unforeseen circumstances, [ST Engineering] expects to achieve comparable Revenue and PBT [profit before tax] for FY2014 vis-à-vis FY2013.”

ST Engineering’s shares opened at S$3.77 this morning, down 0.8% over yesterday’s close.

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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 Sudhan P doesn’t own shares in any companies mentioned.