MENU

A Quick Review of Singapore Technologies Engineering Ltd’s Land System Business Performance

Singapore Technologies Engineering Ltd (SGX: S63), or STE in short, is a conglomerate with business interests in various sectors, namely Aerospace, Electronics, Land Systems, Marine and others.

Given the complexity of this business, it may be useful that investors take a separate look at each of the business segments within the company.

In this article, we will do a quick review of the Land System business segment’s performance in two slides.

Revenue and profit before tax

Source: STE Q2 2017 Result Presentation

From the above, we can see that revenue was flat year-on-year in the second quarter due to improvement in Auto (Automotive) and Munitions & Weapon (M&W) business groups, partially offset by lower revenue from Services, Trading and Others business group.

Despite revenue going up marginally, profitability was down by 4% year-on-year mainly due to absence of gain on divestment of a subsidiary last year, partially offset by higher gross profit and lower operating expenses.

Revenue by location of customers

Source: STE Q2 2017 Result Presentation

The above is a quick summary of the geographical revenue source for STE’s Land System business.

We can see that the majority of income was generated in Asia and USA, with the former growing its share further from 63% last year to 65% this year.

Conclusion

Overall, the Land System business delivered a flattish performance for the quarter, mainly due to the absence of a one-off gain from disposal.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

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