Singapore Technologies Engineering Ltd (SGX: S63) released its annual report a few months ago.
ST Engineering is an engineering conglomerate with wide business interests. We can learn more from its annual report. Here are 22 key figures investors should note:
- ST Engineering has over 100 subsidiaries and associated companies. It has a global workforce of around 23,000 people. This gives you a sense of the conglomerate’s scale.
- Next up, we look at the company’s sources of revenue. Broadly speaking, around two-thirds of ST Engineering’s revenue comes from commercial businesses. The rest comes from defence-related activities. Geographically, Asian customers make up 62% of its customer base. Customers from the United States (US) account for nearly a quarter of total sales.
- ST Engineering’s revenue is fairly balanced by segment. The Aerospace segment is the largest with 33% of sales. ST Engineering said that its aircraft maintenance, repair and overhaul (MRO) business stands as the largest in the world. Meanwhile, the Electronics and Land Systems segments take up 27% and 22% of revenue. Elsewhere, the Marine segment is holding up the rear with a 15% sales contribution.
- Revenue is one thing, but we should look for profits as well. The Aerospace and the Electronics segments contribute 43% and 31%, respectively, of the company’s total net profit. The Land Systems segment lags with a 10% contribution.
- Let’s take a peek into ST Engineering’s balance sheet. The conglomerate reported a net cash position of S$252 million at the end of 2015. This is a decline from the S$686 million recorded last year. The company cited share buybacks, investments in bonds, and acquisition of property, plant, and equipment for the lower net cash position.
- It follows that ST Engineering has been busy buying back its own shares. In 2015, the conglomerate purchased 27.6 million shares of itself. ST Engineering is authorised to purchase up to 2% of its issued equity.
- Elsewhere, ST Engineering has been spending heavily to fund its future growth. The Aerospace segment accounted for 72% of total capital expenditure. The MRO market is expected to be worth over US$100 billion by 2025.
- ST Engineering has $1.2 billion in borrowings, as of the end of 2015. Over three-quarter of its loans will mature in four to five years. Around 80% of the loans are based on fixed interest rates. The company has an interest coverage ratio of 15.4 times, based on profit before taxes, results from associates and joint ventures, and interest expense.
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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 Chin Hui Leong doesn’t own shares in any companies mentioned.