📋 Tender Overview
Order book was 19.3b as at end December 2021 of which about 6.6b is expected to be delivered in 2022Commercial sales1 and defence1 sales constituted 4.8b and 2.9b respectivelyCash and cash equivalents of 816m recorded as at end December 2021Singapore Technologies Engineering Ltd ST Engineering today reported its full-year FY financial results ended 31 December 2021.FY2021 versus FY2020 Performance DiscussionST Engineering posted a 7.5 increase in Group revenue to 7.7b from 7.2b a year ago in the same period contributed by all its business segments. Group EBIT grew 13 year-on-year y-o-y to 673.6m from 596.4m. The Group guided in August 2021 that it expected a y-o-y reduction of 150m in government support in 2021 and the impact of the reduction would mainly manifest in the second half of 2021. In line with this guidance the actual y-o-y reduction in government support was 149m with 137m of the reduction impacting 2H2021. As guided the combination of cost savings net of reinvestments in future growth areas and partial business recovery more than offset the reduction in government support. Excluding government support Group EBIT for FY2021 improved 93 y-o-y reflecting a strong underlying performance amid continuing pandemic challenges.Group Profit before tax PBT grew 19 y-o-y to 637.6m from 534.4m. Group Profit attributable to shareholders Net Profit grew 9 y-o-y to 570.5m from 521.8m. Net Profit growth was lower than PBT growth due to the unfavourable tax effect of lower non-taxable government grants received in 2021 compared to 2020. Consequent to the Groups reorganisation2 on 1 January 2021 the new reportable business segments are as follows Commercial Aerospace CA Urban Solutions Satcom USS and Defence Public Security DPS.FY2021 versus FY2020 Segment Performance Review3 Commercial Aerospace Revenue was 2.46b up 6 y-o-y from 2.33b notwithstanding a strong 1Q2020 prior to the impact of COVID-19 being felt. This segment registered strong y-o-y revenue growth in 2Q 3Q and 4Q of 2021 and sequential quarterly revenue growth across 2021. Revenue growth in 2021 was contributed by Aerostructures Systems while Aerospace MRO continued to be impacted by the subdued aviation sector. Aviation Asset Managements AUM increased by 30 to US1.05b S1.4b as at end December 2021 from US813m as at end December 2020. Commercial Aerospaces EBIT grew 125 y-o-y to 182m from 81m as a result of higher revenue and cost savings initiatives. To emerge stronger this segment continued to invest for future growth through digitalisation programmes and setting up of new passenger-to-freighter conversion sites across its global network in San Antonio Mobile and Shanghai.Urban Solutions Satcom Revenue grew 8 y-o-y to 1.19b from 1.10b contributed by higher Smart City project deliveries partially offset by the impact of global semiconductor chip shortages on Smart City project and Satcom product deliveries. Its EBIT was 26m down 18 y-o-y from 31m largely due to 8m of TransCore-related MA transaction expenses lower government support and the impact of semiconductor chip shortages partially offset by contribution from higher revenue and lower operating expenses.Defence Public Security Revenue grew 8 y-o-y to 4.04b from 3.72b with contribution from all its sub-segments of Digital Systems Cyber Defence Aerospace Land Systems and Marine. EBIT was down 4 y-o-y to 466m from 484m due to lower government support of 137m substantially offset by contribution from higher revenue and cost savings. In 2021 we delivered a good set of results as all business segments registered growth despite persisting pandemic challenges. This reflects the underlying strengths of our businesses and our people. The proposed TransCore acquisition demonstrates our readiness to seize growth opportunities to emerge stronger post pandemic. We can look to the future with confidence as our order book of 19.3b is very robust.We expect the delivery of our strong order book our various business initiatives and further business recovery to position us well for 2022 business performance. Moreover our focus on the effective execution of our long-term strategy and our commitment to invest across the business cycles will put us in good stead to achieve our 2026 targets as communicated on our Investor Day.Vincent Chong Group President CEOIn terms of Group revenue breakdown Commercial Aerospace Urban Solutions Satcom and Defence Public Security accounted for 32 15 and 53 respectively. Commercial sales1 was 4.8b and defence sales1 was 2.9b. The Group held 816m in cash and cash equivalents as at end December 2021.In 2H2021 the Group posted revenue of 4.0b a 13 increase from 3.6b the same period a year ago. Group EBIT was up 13 y-o-y to 319m from 282m while Group PBT was 20 higher y-o-y at 297.8m from 248.0m and Group Net Profit grew 4 y-o-y to 274.4m from 264.4m. Net Profit growth was lower than PBT growth due to the unfavourable tax effect of a significant reduction of non-taxable government support in 2H2021. 2H2021 versus 2H2020 Segment Performance ReviewCommercial Aerospace Revenue was 25 higher y-o-y at 1.33b from 1.07b. Its 2H2021 EBIT improved sharply to 79m from 6m in 2H2020 from significant cost savings and partial business recovery which more than offset the reduction in government support of 51m. Urban Solutions Satcom Revenue grew 5 y-o-y to 663m from 630m contributed by higher Smart City project deliveries partially offset by impact of global semiconductor chip shortages. EBIT was 15m compared to 52m in the same period a year ago as a result of lower government support TransCore-related MA transaction expenses and semiconductor chip shortages.
