📋 Tender Overview
Order book was 16.8b as at end June 2021 of which about 3.6b is expected to be delivered in the remaining months of 2021Cash and cash equivalents of 583mSingapore Technologies Engineering Ltd ST Engineering reported its first half-year financial results ended 30 June 2021 1H2021 under its new financial reporting framework that reflects the organisational structure i in place since 1 January 2021. Under this organisational structure Commercial Aerospace CA Urban Solutions Satcom USS and Defence Public Security DPS constitute the three reportable business segments of the Group. At these business segments level revenue and EBIT will be reported and revenue will also be reported at the sub-segments level.Group revenue in the first six months was 3.65b up 2 from 3.57b a year ago in the same period. Group EBIT was 355.1m up 13 year-on-year y-o-y from 314.1m while Group Profit before tax PBT grew 19 y-o-y to 339.8m from 286.4m and first-half Group Profit attributable to shareholders Net Profit grew 15 to 296.1m from 257.4m. The stronger y-o-y Group revenue was due to partial recovery of businesses across Urban Solutions Satcom and Defence Public Security which more than offset the y-o-y revenue decline in Commercial Aerospace as this segment continued to be impacted since the second quarter of 2020 by the subdued aviation sector COVID-19 impact not yet felt in 1Q2020.Similarly the higher y-o-y Group Net Profit was contributed by better operating performance of Urban Solutions Satcom and Defence Public Security and aided by lower finance cost which more than offset the weaker operating performance of Commercial Aerospace lower government support received and higher tax expense.1H2021 Group Net Profit of 296.1m came in 12 stronger than 2H2020 Group Net Profit of 264.4m despite lower government support. This was on the back of partial recovery in Commercial Aerospace and realisation of disciplined cost savings measures across the businesses.Government Support SchemesEarlier in February the Group guided that it expects a reduction of 250m in government support in 2021 compared to 2020. However due to a higher than expected level of government support it will receive from its global operations the Group now expects the government support reduction to be at 150m. The impact of the reduction in government support will mainly manifest in the second half of 2021.Business Segments Revenue and EBIT iiCommercial Aerospace Revenue was 1.14b 10 lower y-o-y from 1.27b as its sub-segments Aerospace MRO and Aerostructure Systems continued to be impacted by the subdued aviation sector COVID-19 impact not yet felt in 1Q2020. Comparing 1H2021 to 2H2020 Commercial Aerospace recovered partially and its revenue grew 7. EBIT was 37 higher y-o-y at 102.6m contributed by government support. The underlying EBIT was 25m lower than 1H2020 due to a pre-COVID first quarter in 2020 with the extent of EBIT reduction mitigated by cost management measures but offset by weaker operating performance as stated above. Its EBIT for 1H2021 strengthened compared to 2H2020.Urban Solutions Satcom Revenue grew 12 y-o-y to 528m from 471m contributed by Smart Mobility and Satcom. EBIT was 10.8m compared to a negative EBIT of 21m the year before largely due to contribution from higher revenue and lower operating expenses partially offset by lower government support.Defence Public Security Revenue grew 8 y-o-y to 1.99b from 1.83b contributed by sub-segments of Digital Systems Cyber Land Systems and Defence Aerospace. EBIT was down 7 y-o-y to 241.7m from 260.4m due to lower government support compared to the higher government support received during the two circuit-breaker months in 2Q2020 partially offset by contribution from higher revenue and gain recognised on the receipt of liquidation proceeds of subsidiaries.We delivered a good set of results for the first half of 2021 amidst a challenging operating environment. We had also secured contract wins across our businesses that led to a robust order book which continues to provide revenue visibility in the periods ahead.We remain steadfast in the pursuit of our strategy to emerge stronger as the business environment improves. The diversity of our business portfolio and our focus on seizing growth opportunities coupled with productivity and cost management measures will continue to position us well into the future.New Contract Wins in 1H2021 and Order BookIn the second quarter of 2021 the Group secured new contracts of about 1.82b comprising 874m from Commercial Aerospace 284m from Urban Solutions Satcom and 660m from Defence Public Security. Including the 1.55b announced for the first quarter of 2021 the total new contract value for 1H2021 excluding undisclosed wins due to customer confidentiality reasons was 3.37b. In the second quarter Commercial Aerospace clinched new contracts across a spectrum of its aviation manufacturing and MRO businesses including passenger-to-freighter P2F conversion orders for A321P2F and A330P2F units from freight operators and lessors a five-year airframe heavy maintenance contract to support an Asian Pacific airlines Boeing 787 fleet and engine heavy maintenance contracts from Alaska Airlines and an Asian airline.Urban Solutions Satcom won contracts from global customers for smart mobility smart utilities and smart security and satcom. These include the Groups first rail electronics contract in Egypt to provide its Passenger Information System solution for the 10th of Ramadan City Railway as well as smart utilities and integrated security management systems for government agencies in Singapore.
