ST Engineering's FY18 profits down 1.7% to $494.24m

It blamed the 39% drop in earnings from its land systems sector.

Singapore Technologies Engineering (ST Engineering) ended 2018 on a dismal note after its profits dipped 1.7% YoY to $494.24m from $502.63m in 2017, an announcement revealed. Its revenue however inched up 2.7% YoY to $6.69b from $6.52b.

In Q4, profits fell 26% YoY to $124.5m, whilst revenue rose 5% YoY to $1.77b, the firm noted.

Also read: ST Engineering profits up 5.3% to $134.59m in Q3

The firm attributed the earnings decline to the 39% decrease in profits from its land systems sector to $52.9m on the back of one-off charges due to portfolio rationalisation and the absence of 2017’s one-off US tax adjustment.

However, this was partially offset by higher contributions from ST Engineering’s electronics and marine sectors. In FY18, Electronics sector achieved a record profit of $186.5m, an increase of 10% from FY17’s 168.8m. In marine, profits hit $45.2m due to higher gross profits and lower operating expenses.

Meanwhile, the aerospace sector also delivered a revenue of $2.65b in FY18 which was attributable to higher revenue contribution from the firm’s aircraft maintenance & modification, and component/engine repair and overhaul business groups. However, it was partially offset by lower revenue for ST Engineering’s engineering and materials services business group.

Also read: ST Engineering positions for growth as aerospace unit takes flight

ST Engineering reportedly ended 2018 with an order book of $13.2b, of which $4.9b is expected to be delivered in 2019.

“New contracts in 2018 amounted to $5.24b, comprising $2.06b for the aerospace sector, $2.19b for the electronics sector and $991m for the marine sector,” ST Engineering said in its financial statement. “Its land systems segment also secured new contracts for its weapons and munitions as well as the supply of 20 electric buses and 111 two-door doubledeck Euro 6 diesel buses to Singapore’s Land Transport Authority (LTA).”