Singapore Technologies Engineering (S63) H1 2024 earnings summary

Executive summary

• Revenue rose 14% year-on-year to SGD 5.52 billion in 1H 2024, with all business segments contributing to growth.

• Net profit increased 20% year-on-year to SGD 337 million, driven by business growth and improved cost management.

• Robust order book of SGD 27.9 billion as of June 2024, supporting long-term growth confidence.

• Management remains optimistic about opportunities in aerospace, smart city, defense, and public security sectors.

• Interim dividend of SGD 0.04 per share approved, payable in September 2024.

Financial highlights

• EBIT grew 18% year-on-year to SGD 523 million; excluding 2023 Satcom one-offs, EBIT rose 11%.

• EBITDA increased 11% year-on-year to SGD 786 million in 1H 2024.

• Commercial revenue reached SGD 3.9 billion, defense revenue SGD 1.6 billion (up ~5% year-on-year).

• Operating expenses as a percentage of revenue declined to 10.4% from 11.4% in 1H 2023.

• Earnings per share was 10.80 cents, up from 9.01 cents in 1H2023.

Outlook and guidance

• Full-year 2024 performance expected to surpass 2023, with USS segment second-half weighted.

• Continued growth anticipated in aerospace, smart city, defense, and public security domains.

• Satcom business remains loss-making but is focused on transformation and long-term migration to new platforms.

• No material impact anticipated from the pause in New York Congestion Pricing for Urban Solutions & Satcom.