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

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

In early May, the company reported its 2018 first quarter 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 2018’s first quarter:


Source: ST Engineering 2018 first quarter earnings presentation

We can see that the company had enjoyed a good quarter with healthy growth in revenue and profit.

The positives

Firstly, the Aerospace, Electronics, and Land Systems segments all reported higher revenue. They produced growth rates of 9%, 22%, and 3%, respectively, on a year-on-year basis.

Secondly, all four segments reported year-on-year growth in net profit. The Aerospace, Electronics, Land Systems, and Marine segments saw their net profit grow by 6%, 23%, 34%, and 7%, respectively, compared to a year ago.

Lastly, ST Engineering ended the reporting quarter with a strong balance sheet. As of 31 March 2018, the conglomerate’s total debt stood at S$1.04 billion while its cash and short-term investments stood at S$1.30 billion, giving it a net cash position of S$0.60 billion.

The negatives

For the reporting quarter, the Marine segment experienced a 16% year-on-year decline in revenue to S$150 million. This was mainly due to lower revenue in both the Shipbuilding and Shiprepair subsegments.

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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.