How Does Singapore Technologies Engineering Ltd Make Money?

Singapore Technologies Engineering Ltd  (SGX: S63) is one of the largest companies in Singapore’s stock market, so it may be a company that investors are interested in.

As investors, we need to understand a company before we invest in it. One of the main things that we need to know is how the company earns money. In this article, I want to provide a breakdown of ST Engineering’s revenue by segment, location, and customers.

Revenue breakdown by segment

The table below shows the revenues of ST Engineering’s various business segments in 2017 and 2016:

Source: ST Engineering 2017 earnings presentation

The Aerospace segment provides diverse services that include airframe, engine and component maintenance, repair and overhaul, engineering design and technical services, and aviation materials and management services.

Next, the Electronics segment specializes in the design, development and integration of advanced electronics and communications systems. These systems include broadband radio frequency and satellite communication, e-Government solutions, rail and traffic management, and more.

The next largest segment by revenue, Land Systems, provides design and engineering services. It also manufactures military and commercial vehicles, automotive subsystems, robotic systems, armament, and weapons.

Lastly, the Marine segment provides building, repair, and conversion services for naval and commercial vessels, with a worldwide client base.

Revenue breakdown by customer and location

Here’s a chart showing the revenue of ST Engineering, categorised by customer-type, and geographic location:

Source: ST Engineering 2017 annual report

We can see that the majority of ST Engineering’s customers are in Asia. The next largest geographies are the US, Europe, and what’s classified as “Others.” And, given the descriptions of the company’s various business segments I shared earlier, it’s not surprising to learn that ST Engineering has significant business from defense-related customers.

There are clearly a number of moving parts with ST Engineering’s business. By breaking down and understanding the company’s revenue, investors will be better positioned when thinking about its future.

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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.