ST Engineering - Phillip Securities 2024-03-04: Defence & Security Led Earnings Growth

ST Engineering - Defence & Security Led Earnings Growth

ST Engineering (SGX:S63) | SGinvestors.ioST Engineering (SGX:S63)
  • ST Engineering (SGX:S63)'s FY23 net profit was in line with our expectations. Net profit was affected by several one-offs amounting to S$66mil. Excluding these, net profit would have grown by 23.7%.
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    • Commercial aerospace (CA) grew 47% y-o-y (excluding one-off items) with increased MRO demand and improved margins from passenger-to-freighter conversions.
    • Urban solutions and Satcom (USS) incurred loss on divestment and severance costs on restructuring. Transcore turned profitable in 4Q23.
  • Orderbook remained strong at S$27.4bn.

The Positives

Aerospace MRO revenue rose 41%, as demand surged in tandem with recovery in air travel.

  • The passenger-to-freighter conversion business has also scaled the learning curve and is turning profitable. However, commercial aerospace FY23 EBIT margin fell 1.5% pt to 8.6% due to higher manpower costs.

Defence and public security posted EBIT growth of 40%.

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Net debt to EBITDA improved to 4.2x, from 5.0x in Dec 22

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Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @

Peggy Mak Phillip Securities Research | 2024-03-04

Previous report by Phillip:
2023-11-14 ST Engineering - Defence & Security Will Move To The Forefront.

Price targets by 5 other brokers at ST Engineering Target Prices.

Listing of research reports at ST Engineering Analyst Reports.

Relevant links:
ST Engineering Share Price History,
ST Engineering Announcements,
ST Engineering Dividends & Corporate Actions,
ST Engineering News Articles


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