- ST Engineering's FY24 revenue and adjusted PATMI were within expectations at 101% of our FY24e forecast. Excluding exceptionals, 2H24 adjusted PATMI jumped 32% y-o-y to S$386mil. Commercial aerospace (CA) earnings rebounded on more substantial margins due to project timing, operating leverage and product mix.
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- We believe the company's underlying growth drivers remain on track. CA benefits from rising travel and aircraft maintenance. Improving A320 neo deliveries will further boost growth in engine nacelle production. Elevated geopolitical concerns and nations raising their defence budgets will drive demand for defence ammunition and equipment.
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The Positive
Jump in CA & DPS earnings.
- Commercial aerospace (CA) earnings surged 32% y-o-y to S$210.5mil in 2H24. A combination of operating leverage, spare sales, and improving margin in the freighter conversion operations.
- Defence and Public Security (DPS) surged on the delivery of ammunition and completion of cybersecurity projects.
The Negative
Satcom earnings are still soft.
- Read more at SGinvestors.io.
