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ST Engineering reports 1QFY2023 revenue of $2.3 bil, 13% higher y-o-y

The higher revenue was attributed to the group’s base business growth and contribution from its acquisition of TransCore.

Singapore Technologies Engineering (ST Engineering) S63 has reported revenue of $2.3 billion for the 1QFY2023 ended March 31, 13% higher y-o-y and higher than the group’s pre-Covid-19 results during the 1QFY2020.

The higher revenue was attributed to the group’s base business growth and contribution from its acquisition of TransCore.

Revenue for commercial aerospace (CA) grew by 29% y-o-y to $873 million with $0.7 billion worth of new contracts secured in the quarter. Its Airbus passenger-to-freighter (P2F) programme “learning curve” is also improving.

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In ST Engineering’s results statement, the segment is expecting more growth in the quarters to come with air travel still recovering. The re-opening of China’s borders is also an opportunity for the segment.

The group’s nacelle business, acquired in September 2018, is also benefitting from the fleet growth of the A320neo. The narrowbody production is expected to be “strong” over the next 10 years with 15,593 in total orders to be delivered between 2023 to 2032.

Urban solutions & satcom’s (USS) revenue increased by 46% y-o-y to $434 million as well which was contributed by TransCore. Revenue for Satcom during the quarter was, however, affected by supply chain disruptions and project delays. Satcom’s business itself is undergoing transformation with new use cases emerging.

While the group has identified several near-term headwinds for Satcom specifically including weakness in its business performance and continued investments in research and development (R&D), it remains positive on long-term growth opportunities. USS secured a total of $0.8 billion of new contracts during the quarter.

Revenue for defence & public security (DPS) fell by 8% y-o-y to $982 million. Excluding US Marine’s revenue during the quarter, DPS’s revenue improved by 1% y-o-y. During the quarter, the segment clinched $3.3 billion worth of new contracts; the group expects revenue for this segment to pick up over the next few quarters.

As of March 31, the group’s order book remains robust at $25.4 billion with $5.8 billion expected to be delivered in the remaining months of 2023.

As at the same period, the group’s borrowings reduced from $6.5 billion to $5.9 billion with percentage of its fixed rate borrowings increased to 57%. The group adds that it plans to issue US$500 million ($668.9 million) of fixed rate debt.

As at 9.36am, shares in ST Engineering are trading 2 cents lower or 0.55% down at $3.63.

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