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ST Engineering Q3 earnings surge 67.5% in absence of one-off charge


THE absence of a one-time S$61.1 million charge for its specialty vehicle business in China gave a fillip to Singapore Technologies (ST) Engineering's earnings in the third quarter.

Net profit for the three months to Sept 30 leapt 67.5 per cent to S$128.4 million from the same period a year earlier.

Revenue was little changed at S$1.62 billion, from S$1.61 billion previously. Higher turnover in the aerospace and electronics segments was offset by lower contributions from both the marine and land systems segments, the integrated defence and engineering group said in a Singapore Exchange filing yesterday morning.

The aerospace sector, for instance, saw revenue climb 8 per cent to S$608 million, while the marine sector logged a 22 per cent drop to S$164 million.

The bottom line had been boosted by lower distribution and selling expenses as well as other operating expenses, due to the absence of a one-time charge. ST Engineering had made an impairment of S$61.1 million for the same quarter last year for its speciality vehicle business in China.

Net profit for the nine months ended Sept 30 was up 9.3 per cent to S$343.4 million, while revenue inched up 1.1 per cent to S$4.92 billion.

Earnings per share rose to 4.12 Singapore cents from 2.47 Singapore cents in the previous year. Net asset value per share stood at 67.17 Singapore cents at the end of the quarter, higher than the 63.39 Singapore cents at the same time a year ago.

The group had announced about S$1.1 billion worth of contracts during the quarter, bringing its order book to S$13.3 billion - of which about S$1.2 billion will be delivered in the remaining months of this year.

ST Engineering president and chief executive Vincent Chong told a briefing yesterday that the firm's order book remains strong, and that it maintains its outlook of comparable revenue and profit before tax for the year.

Mr Chong said that the group continues to position itself for long-term sustainable growth and value creation, such as with the recent acquisition of a United States robotics firm, Aethon. Aethon has the largest deployed fleet of autonomous mobile robots worldwide with more than 700 units, accounting for some 30 per cent of the global market.

Mr Chong noted that there are targets in place for the robotics business to grow to become "a significant revenue contributor" to ST Kinetics over the next few years, with a topline of more than S$100 million. It will first focus on three segments: hospitals, manufacturing or industrial applications, and hospitality.

On the marine business front, Mr Chong noted that the group continues to take steps to mitigate challenges in the sector amid the downturn, and will carry on with the restructuring of its marine unit VT Halter Marine. The group has further reduced staff costs by S$10 million or 9 per cent in the first nine months of this year, compared with the same period last year.

ST Engineering shares closed 1.7 per cent or six Singapore cents lower at S$3.41 yesterday, after the results were released in the morning.