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10 Quick Things to Know About Singapore Technologies Engineering Ltd’s Latest Results

On Wednesday, Singapore Technologies Engineering Ltd (SGX: S63), or STE, reported its 2019 first-quarter earnings update. As a quick introduction, STE is a conglomerate with business interests in various sectors, namely, Aerospace, Electronics, Land Systems, Marine and others.

Here, we will look at 10 things that investors should know from its latest earnings update.

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  1. Revenue for the reporting period grew by 5% year-on-year to S$1.7 billion.
  2. Earnings before interest and taxes (EBIT) for the quarter improved by 16% year-on-year to S$141.9 million.
  3. Similarly, profit attributable to shareholders for the period was up by 11% year-on-year to S$131.1 million.
  4. Earnings per share (EPS) also improved 11% from 3.78 cents last year to 4.20 cents in this quarter.
  5. ST Engineering generated operating cash flow of S$369.3 million in the quarter, down from S$430.7 million seen last year.
  6. As of 31 March 2019, ST Engineering’s total debt stood at S$0.8 billion while its cash and investments were S$0.6 billion, giving it a net debt position of S$0.2 billion.
  7. The engineering conglomerate’s order book stood at S$14.1 billion at the end of the quarter with S$4.2 billion of its order book to be delivered in 2019.
  8. Aerospace and Land System segments grew revenue by 4% and 34%, respectively, on a year-on-year basis. Yet, Electronic and Marine segments saw revenue fell by 7% and 1%, respectively, as compared to the same period last year.
  9. The conglomerate acquired MRA Systems at a net consideration of about US$506m (approximately S$683m) on 18 April 2019 and is now focused on integrating the business with the Aerospace sector.
  10. ST Engineering’s president and CEO, Vincent Chong, commented:

“We had a good start to the year and our recent contract wins have increased our order book to a high of $14.1b. Our focus remains on strengthening our core businesses and pursuing growth in Smart City and in the international defence business.

On the M&A front, we have agreed to acquire Newtec Groupi, which operates in the high-tech satellite communications industry driving connectivity. This acquisition is expected to complete in 2H2019, and when combined with our existing satellite communications businesses, will further enhance our value proposition for Smart City.”

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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.