ST Aerospace shoots hope for earnings growth

It contributes around 33% of the group's revenues.

Despite the slump in ST Engineering's profit for 3Q16, it could look forward for a rebound as its Aerospace segment continues to contribute a bulk in its profits.

According to DBS Vickers Securities, STE's four key business divisions bring diversification benefits, with Aerospace segment contributing 33% of the group's revenues.

"Continued initiatives by ST Aerospace to broaden its capabilities should propel its growth in the longer term," the brokerage firm said.

Included in these initiatives is a partnership with Airbus for passenger-to-freighter conversion of its A320/A321 and A330 jets, marking a diversification of its conversion portfolio.

More so, a continued expansion of its cabin interior service solutions business particularly for VIP aircraft completions in in the works. The segment's expansion of its mid-life aircraft leasing business is also underway.

To recall, STE reported a 42% plunge in net profits to $76.7m. Its Aerospace segment posted higher quarterly revenue of $563m, up 11% year-on-year from $506m, and PBT of $65.2m was comparable to the same quarter last year.

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