ST Engineering – Buy on Downtrend?

While prices of most stocks have gone up, the stock price of ST Engineering has gone down recently. There has been discussions on ST Engineering on whether one should buy at current price of S$3.19, whether will the stock fall lower and if there is anything wrong with ST Engineering which resulted in the decline in share price. Based on technical analysis, Singapore Technologies Engineering is currently on a downtrend. Read More

ST Engineering Profits from Land Systems and Marine Sectors Declined

ST Engineering Logo

Singapore Technologies Engineering Ltd (ST Engineering) announces its 1Q2016 financial results on 13th May 2016. Revenue was 8% higher in 1Q2016 as compared with 1Q2015 due to higher sales from Aerospace and Electronics sectors. However, net profit after tax (Net profit) for the Group was $110.2m, down 15% from $130.0m as profits from Land Systems and Marine sectors declined. Earning per share fell 15% from 4.17 cents to 3.53 cents.

Revenue from Aerospace and Electronics sector are 27% and 28% higher respectively. Revenue for Land Systems and Marine sector decline by 18% and 24% respectively. Revenue from Marine sector remains weak due to lower demand for ship building from local and U.S. operations.

Order book was $11.5b at the end of March 2016, of which the Group expects to deliver about $3.0b in the remaining months of 2016.

FINANCIAL HIGHLIGHTS
For the first quarter ended
31 March 2016
2016
1Q
2015
1Q
Growth
%
Revenue ($m) 1,627 1,511 8
Earnings before interest and tax (EBIT) ($m) 97.2 110.1 (12)
Other income, net ($m) 22.1 20.8 6
Finance (costs)/income, net ($m) (11.5) 8.5 (234)
Profit before tax (PBT) ($m) 130.4 150.5 (13)
Profit attributable to shareholders ($m) 110.2 130.0 (15)
Earnings per share (cents) 3.53 4.17 (15)

The stock price for ST Engineering closed at S$3.08 today.

ST Engineering Contract Win with TERREX 2

Terrex 2

On 17th March 2016, ST Kinetics, the land systems arm of ST Engineering announces that they have been awarded the contract for 13 prototypes of the amphibious combat vehicle Terrex 2 by the US Marine Corps. The 13 Terrex 2 prototypes would be tested next year.

The contract that was awarded to ST Engineering (STE) and partner Science Applications International Corp (SAIC) was worth US$121.5 million. If the US Marines select the Terrex 2, a further contract will be awarded for the building of another 204 vehicles at an average procurement price of up to US$6.5 million per vehicle (Total worth US$1.3 billion)

Competition

During the tenders for the US Marines contract, ST Engineering and BAE Systems are the two firms selected to build prototypes. BAE Systems was awarded a smaller US$103.8m contract for the SuperAV vehicles.