ST Engineering reports 2% fall in FY18 earnings to $494 mil

SINGAPORE (Feb 21): ST Engineering reported a 26% drop in 4Q18 earnings to $124.5 million from a year ago.

This brings FY18 earnings to $494.2 million, down 2% y-o-y. Revenue was up 3% at $6.7 billion for the year.

For the quarter under review, group revenue came in 5% higher y-o-y at $1.77 billion while PBT dropped 7% y-o-y to $160.5 million.

Excluding one-off charges of $25 million before tax, PBT would have been 7% higher y-o-y at $185.6 million, and earnings would have been 1% higher at $149.1 million if prior year’s one-off favourable US tax adjustment of $20 million was excluded as well.

Compared to the same period last year, revenue for the Aerospace sector was down 13% at $647 million mainly due to lower project milestone completion for existing Airbus passenger-to-freighter conversions. Net profit was 27% lower y-o-y at $63.5 million due to loss from disposal of business entities and MRAS acquisition-related expenses.

Revenue for the Electronics sector was $536 million, up 16% from $461 million a year ago and its net profit was $44.1 million, down 20% versus same period last year due to less favourable sales mix. The land systems sector’s revenue increased 29% y-o-y to $435 million due to higher project deliveries and it turned in a net loss of $0.7 million from net profit of $42.6 million a year ago due to one-off charges of about $20 million related to portfolio rationalisation and the absence of favourable U.S. tax adjustments.

Revenue for the Marine sector was 6% higher at $139 million, and its net profit improved from $0.7 million a year ago to $14.5 million.

ST Engineering ended the year with an order book of $13.2 billion, of which $4.9 billion is expected to be delivered in 2019.

Its board has proposed a final dividend of 10 cents per share. Together with the interim dividend of 5.0 cents per share distributed in August 2018, shareholders will receive a total dividend of 15 cents per share for FY18.

Shares in ST Engineering closed 4 cents higher at $3.77 on Wednesday.