<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>ST Engineering's profits fall 30%
</TR><!-- headline one : end --><TR>But defence manufacturer has record order book and robust balance sheet </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WEAKER returns in its aerospace and land systems segments sent first-quarter net profits at ST Engineering tumbling 30.4 per cent from the same period last year.
However, Singapore's leading defence manufacturer indicated that it is well-positioned to navigate through the global economic downturn due to a record order book and robust balance sheet.
Net profit fell from $122.5 million to $85.2 million for the three months ending March 31, with a major hit coming from its aerospace segment, where profit before tax plunged 52 per cent to $39.8 million.
ST Engineering said this was because of the absence of freighter conversion redeliveries, reduced sales in its components division, no investment income and increased financial expenses.
Its land systems arm also saw profit before tax sinking 20 per cent to $26.4 million due to lower turnover.
But turnover rose 0.2 per cent to $1.32 billion due to higher revenue from the electronics and marine businesses.
The increase from these two segments more than made up for a 32 per cent slump in turnover to $247 million from the land systems business, which was hit by lower project deliveries and sales from its United States operations arising from the weak economic climate there.
Commercial sales accounted for about $843 million or 64 per cent of total turnover.
Investors will be cheered by ST Engineering's healthy order book, which stood at an all-time high of $11.03 billion at the end of March, boosted by commercial and defence contracts.
Of this, about $2.88 billion is expected to be delivered in the remaining months of this year.
ST Engineering announced last week that its land systems arm, ST Kinetics, was awarded an euro8 million (S$15.8 million) ammunition supply deal.
Last month, its electronics arm clinched a 56.8 million yuan (S$12.2 million) contract to build a mass rapid transit project in Guangzhou, China.
Record order book aside, the company also holds $1.38 billion in cash and cash equivalents and has an operating cash flow of $351 million. Advance payments from customers total $1.34 billion.
Chief executive Tan Pheng Hock said: 'The growing order book and the strong balance sheet will help us ride through this global economic crisis.'
Mr Tan expects his company to achieve 'comparable' turnover and profit before tax for the full financial year versus the previous one, 'based on the order book and scheduled deliveries'.
ST Engineering also expects to see higher turnover but lower profit before tax for the first half of this year compared with the same period last year.
Earnings per share for the first quarter dropped to 2.84 cents from 4.11 cents for the same period last year, while net asset value per share stood at 57.1 cents compared with 57.8 cents last year.
ST Engineering shares closed six cents up at $2.63 yesterday with 6.62 million units traded before the results were announced. The counter is up nearly 15 per cent for the year. [email protected]
</TR><!-- headline one : end --><TR>But defence manufacturer has record order book and robust balance sheet </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo
</TD></TR><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WEAKER returns in its aerospace and land systems segments sent first-quarter net profits at ST Engineering tumbling 30.4 per cent from the same period last year.
However, Singapore's leading defence manufacturer indicated that it is well-positioned to navigate through the global economic downturn due to a record order book and robust balance sheet.
Net profit fell from $122.5 million to $85.2 million for the three months ending March 31, with a major hit coming from its aerospace segment, where profit before tax plunged 52 per cent to $39.8 million.
ST Engineering said this was because of the absence of freighter conversion redeliveries, reduced sales in its components division, no investment income and increased financial expenses.
Its land systems arm also saw profit before tax sinking 20 per cent to $26.4 million due to lower turnover.
But turnover rose 0.2 per cent to $1.32 billion due to higher revenue from the electronics and marine businesses.
The increase from these two segments more than made up for a 32 per cent slump in turnover to $247 million from the land systems business, which was hit by lower project deliveries and sales from its United States operations arising from the weak economic climate there.
Commercial sales accounted for about $843 million or 64 per cent of total turnover.
Investors will be cheered by ST Engineering's healthy order book, which stood at an all-time high of $11.03 billion at the end of March, boosted by commercial and defence contracts.
Of this, about $2.88 billion is expected to be delivered in the remaining months of this year.
ST Engineering announced last week that its land systems arm, ST Kinetics, was awarded an euro8 million (S$15.8 million) ammunition supply deal.
Last month, its electronics arm clinched a 56.8 million yuan (S$12.2 million) contract to build a mass rapid transit project in Guangzhou, China.
Record order book aside, the company also holds $1.38 billion in cash and cash equivalents and has an operating cash flow of $351 million. Advance payments from customers total $1.34 billion.
Chief executive Tan Pheng Hock said: 'The growing order book and the strong balance sheet will help us ride through this global economic crisis.'
Mr Tan expects his company to achieve 'comparable' turnover and profit before tax for the full financial year versus the previous one, 'based on the order book and scheduled deliveries'.
ST Engineering also expects to see higher turnover but lower profit before tax for the first half of this year compared with the same period last year.
Earnings per share for the first quarter dropped to 2.84 cents from 4.11 cents for the same period last year, while net asset value per share stood at 57.1 cents compared with 57.8 cents last year.
ST Engineering shares closed six cents up at $2.63 yesterday with 6.62 million units traded before the results were announced. The counter is up nearly 15 per cent for the year. [email protected]
