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The Good And Bad That Investors Should Know About Singapore Technologies Engineering Ltd’s Latest Quarterly Earnings

Singapore Technologies Engineering Ltd (SGX: S63) is a large engineering conglomerate with four main business segments, namely, Aerospace, Electronics, Land Systems, and Marine.

In late February, the conglomerate reported its 2017 fourth quarter and full year earnings update. There are both positive and negative takeaways that investors may want to learn about. But first, let’s run through the company’s numbers.

The results

Here’s a condensed income statement from ST Engineering for 2017’s fourth quarter:


Source: ST Engineering 2017 fourth quarter earnings presentation

We can see that ST Engineering did not enjoy a good quarter, with its revenue and profit both declining on a year-on-year basis.

The positives

Firstly, despite the overall decline in the engineering conglomerate’s revenue in the reporting quarter, the Aerospace segment reported decent revenue growth of 9%.

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

Lastly, the company ended 2017 with a strong balance sheet. Total debt stood at S$1.12 billion, while cash and cash equivalents came in at S$1.36 billion, giving rise to a net cash position of S$0.24 billion.

The negatives

As alluded to earlier, all of ST Engineering’s segments – except for Aerospace – reported lower revenue compared to a year ago for 2017’s fourth quarter. In particular, the Marine segment continued to face challenges in its business; its revenue was down 22%, while its profit before tax sank by 97%.

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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.