ST Engineering Reports Higher Year-on-Year Revenue For FY2016 Versus FY2015

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16-Feb-2017 ST Engineering Reports Higher Year-on-Year Revenue For FY2016 Versus FY2015 

For the year ended 31 December 2016
Growth %
Revenue ($m)
Earnings before interest and tax (EBIT) ($m)
Other income, net ($m)
Finance (costs)/income, net ($m)
Profit before tax (PBT) ($m)
Profit attributable to shareholders ($m)
Earnings per share (cents)
Economic value added (EVA) ($m)
Return on equity (%)
Dividend per share (cents)
• Final
• Interim - Ordinary
  • Commercial sales constituted 65% or $4.3b of revenue
  • Order book of $11.6b at end December 2016, of which about $3.7b is expected to be delivered in 2017
  • Cash and cash equivalents including funds under management totalled $1.4b
  • Advance payments from customers totalled $1.5b
  • Economic value added for FY2016 was $252.4m

Group FY2016 Audited Results   ST Engineering Results Presentation FY2016

N.B.: All currencies are in Singapore dollars

Singapore Technologies Engineering Ltd (ST Engineering) today reported its full year financial results for the period ended 31 December 2016 (FY2016), with a 6% increase in group revenue to $6.68b from $6.34b a year ago and lower profits resulting from the one-off charge consisting of an impairment of asset carrying values and provision for closure costs for JHK, the Land Systems sector’s road construction equipment business in China.  Profit before tax (PBT) dropped 6% to $590.6m from $630.3m, and net profit attributable to shareholders (Net profit) was 8% lower at $484.5m from $529.0m in the prior year.  

Comparing FY2016 against FY2015 at the business sectors, revenue for the Aerospace sector was 19% higher at $2.48b from $2.09b posted a year ago, mainly driven by the contribution of its new subsidiary, Elbe Flugzeugwerke.  Its PBT was $300.3m compared with $290.6m the year before.  The Electronics sector posted higher revenue of $1.88b, up 10% from $1.71b, and a 9% increase in PBT to $207.8m from $191.0m a year ago.  Revenue for the Land Systems sector was down 7% year-on-year to $1.30b from $1.40b, and its PBT declined 66% to $22.2m from $65.0m the year before, a result of the one-off charge for JHK.  Weaker shipbuilding performance in Singapore and US operations resulted in lower revenue and PBT for the Marine sector, with its revenue down 12% to $841m from $958m and its PBT down 15% to $75.1m from $88.3m a year ago. 

“As a Group we achieved a commendable performance for FY2016, against headwinds that continue to subdue economic growth. Comparing FY2016 against FY2015, Group revenue grew 6% to $6.68b, and Group PBT and Net Profit came in lower at $590.6m and $484.5m respectively mainly as a result of the one-off charge in 3Q2016 for the Land Systems sector’s Specialty Vehicle business in China. Excluding the one-off charge, Group PBT and Net Profit for FY2016 would have been comparable to that in FY2015.

For 4Q2016, the Group posted comparable Revenue with a higher PBT compared to the same quarter last year. At the end of 2016, the order book showed a healthy level of $11.6b. The Group’s cash and cash equivalents including funds under management at the end of FY2016 was at $1.4b.

Barring unforeseen circumstances, the Group expects FY2017 Revenue to be comparable, while PBT is expected to be higher than that of FY2016.” - President & CEO, ST Engineering

4Q2016 versus 4Q2015

In the fourth quarter ended 31 December 2016 (4Q2016), the Group posted revenue of $1.82b versus $1.78b in the same period last year.  Group PBT grew 10% year-on-year to $183.3m from $166.6m and Net profit grew 21% year-on-year to $170.4m from $140.8m.

At the business sector level, revenue for the Aerospace sector was $680m, up 17% year-on-year from $580m, and its PBT comparable at $85.8m.  For the Electronics sector, revenue was flat at $517m and its PBT was up at $64.2m, 7% higher compared to $60.2m in the same period last year.  Revenue for the Land Systems sector was comparable at $404m and its PBT at $24.1m was up 89% from $12.7m a year ago.  The Marine sector posted revenue of $168m, down 24% from $220m and its PBT down 35% to $12.6m from $19.3m a year ago.

In 2016, commercial sales accounted for 65% or $4.3b of Group revenue.  The spread of Group revenue in FY2016 by business sector was 37% from the Aerospace sector, 28% from the Electronics sector, 19% from the Land Systems sector and 13% from the Marine sector.

Dividend payout and dividend yield

The Board of Directors proposes a Final Dividend of 10.0 cents per share.   Together with the Interim Dividend of 5.0 cents per share distributed last August 2016, shareholders will receive a total dividend of 15.0 cents per share for FY2016, same as FY2015.  This translates to a dividend yield of 4.81%, computed using the average closing share price of the last trading day of 2016 and 2015.

2016 New Orders

The Group ended the year with $11.6b of order book, of which $3.7b is expected to be delivered in 2017.  Its Aerospace sector announced contract value of about $840m for the last quarter of 2016, bringing its total contract value for the year to $2.57b. Its Electronics sector announced a total of $2.33b in contract value for 2016, with $695m secured in the last quarter of 2016.  The Marine sector also announced $138m worth of shipbuilding and ship repair contracts for its Singapore and US yards.  Similarly, its Land Systems sector secured contracts from both defence and commercial customers, including the supply of 16 Terrex2 ACV 1.1 to the US Marine Corps, a prototype contract for the Next Generation Delivery Vehicle from the United States Postal Service, as well as 40mm High & Low Velocity munitions from overseas customers in Europe and the Middle East.