ST Engineering's Net Profit Grew 3% In 3Q2011

Singapore, 4 November 2011 – Singapore Technologies Engineering Ltd (ST Engineering) today announced that it achieved moderate year-on-year quarterly growth against a backdrop of global economic uncertainty. In 3Q2011, the Group registered revenue of $1,395m, 6% lower compared to the same quarter last year. Except for Marine sector which had comparable revenue, all sectors registered lower revenue. Nevertheless, profit before tax (PBT) grew 4% to $165.9m and net profit increased by 3% to $133.8m. The higher PBT was partially attributable to write-back of allowance for inventory obsolescence as a result of a group-wide industry and benchmarking study on the basis and estimates for allowance for inventory obsolescence in 3Q2011.

Nine months PBT rose 9% to $470.9m on a 2% growth in revenue to $4,446m, while net profit was up by 8% to $375.4m compared to 9M2010. Earnings per share rose 7% to 12.31 cents.

The Group’s cash and cash equivalents and short term investments totalled $1.56b and advance payments from customers stood at $1.55b. Commercial sales accounted for 62% or $860m of 3Q2011 revenue.

“In 3Q2011, the Group recorded increases of 4% and 3% in PBT and Net Profit respectively despite a 6% drop in revenue over the corresponding quarter in 2010. Compared to 9M2010, the Group’s PBT and Net Profit improved by 9% and 8% whilst revenue was comparable.

The Group continues to secure orders and grow its order backlog to $11 billion at the end of the quarter despite the challenging environment.

Barring unforeseen circumstances, the Group expects to achieve revenue and PBT for FY2011 comparable to FY2010." ~ TAN Pheng Hock, President & CEO, ST Engineering

About $1.3b of the $11b order book is expected to be delivered in the last quarter of 2011. From July to September, the Aerospace sector secured maintenance contracts worth a total of $453m. The Electronics sector won a Public Utilities Board contract to develop and implement parts of an Intelligent Water Management System. It also started collaboration with Changi Airport to implement a Perimeter Intrusion Detection System for the latter’s airfield. The Land System sector won its first city bus contract worth over $65m from SMRT Buses Ltd to supply state-of-the-art low floor MAN A22 buses, and a $68m contract from the Singapore Ministry of Defence to supply a new generation Spider Light Strike Vehicles and spares. The Marine sector continued to meet the delivery schedule for its articulated tug barges in the US, and also started construction on the second vessel for Pasha Hawaii.