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9 Quick Things Investors Should Know About Singapore Technologies Engineering Ltd’s Latest Earnings

In late February, Singapore Technologies Engineering Ltd (SGX: S63) released its 2017 fourth quarter and full year earnings update. As a quick introduction, ST Engineering is a large engineering conglomerate with four main business segments, namely, Aerospace, Electronics, Land Systems, and Marine.

Here are nine things investors should know about ST Engineering’s latest results:

1. Revenue for the reporting quarter declined by 6.4% year-on-year to S$1.70 billion. For the whole of 2017, revenue declined by 1.0% to S$6.62 billion.

2. Earnings before interest and taxes (EBIT) for the fourth quarter improved by 3.2% year-on-year to S$159.8 million. EBIT for the whole year was up by 17.4% to S$553.3 million.

3. Profit attributable to shareholders for the fourth quarter declined by 1.1% year-on-year to S$168.5 million. For the whole of 2017, profit attributable to shareholders was up 5.7% to S$511.9 million.

4. Earnings per share (EPS) for 2017 grew 5.3% from 2016 to 16.4 cents.

5. ST Engineering generated operating cash flow of S$763.66 million in 2017, up 0.6% from S$758.81 million seen in 2016. With capital expenditure increasing by 8.6% from S$250.92 million to S$272.56 million, ST Engineering’s free cash flow fell from S$507.89 million to S$491.1 million.

6. As of 31 December 2017, ST Engineering’s total debt stood at S$1.12 billion while its cash and investments stood at S$1.36 billion, giving it a net cash position of S$0.24 billion.

7. The engineering conglomerate’s order book stood at S$13.2 billion at end-2017, up 14% from a year ago. ST Engineering expects S$3.8 billion of its order book to be delivered in 2018.

8. The company recommended a final dividend of 10.0 cents per share, bringing its total dividend for 2017 to 15.0 cents per share.

9. In ST Engineering’s earnings update, its president and CEO, Vincent Chong, shared some comments on the company’s future:

“In FY2017, profits were higher than and revenue was comparable to FY2016. We started 2018 with a strong order book of $13.2b, providing us with steady revenue pipeline for the next few years.

We will continue to strengthen our core businesses, drawing upon the strengths of each sector to offer innovative technologies in the areas of defence and smart city solutions (including, among others, cybersecurity, public security services, urban transportation and robotics) to our customers around the world.

We expect that our performance will strengthen over the next few years. Growth will come from the Aerospace sector as its A330 and A320 passenger-to-freighter conversion programmes gain momentum, and from the more expansive smart city offerings emanating from the Electronics and Land Systems sectors in Singapore and overseas. Industry conditions for the Marine sector are likely to remain weak in 2018, but we will continue to focus on strengthening our operational efficiency.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.