ST Engineering delivered a strong 1H25, with net profit rising 20% y-o-y to S$403mil, representing 48% of the full-year street estimate of S$839mil. This is largely in line, given the second half is seasonally stronger.
Results in line, with broad-based margin expansion.
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Group top line increased 7% y-o-y to S$5.92bn (48% of the street’s full-year estimate), while group operating margin improved to 9.5% (1H24: 8.8%) on a favourable revenue mix and cost discipline (S$100mil of cost savings achieved in 1H25, opex-to-revenue ratio improved to 10.3% vs 10.4% in 1H24).
Commercial Aerospace (CA) revenue rose 5% y-o-y to S$2.35bn
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Segment operating profit increased 18% y-o-y to S$187mil, with margins expanding 80bps y-o-y to 8.0%, supported by a favourable mix (greater contribution from higher-margin engine MRO and nacelles vs lower-margin P2F) and cost efficiencies.
Management noted that nacelle output was up slightly y-o-y despite an 11% y-o-y decline in A320 deliveries in 1H25 and 1 to 2 months of disruption to COMAC production due to tariffs.
Defence & Public Security (DPS) posted 12% y-o-y revenue growth to S$2.65bn
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
