Singapore Technologies Engineering (S63) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 11.8% YoY to $10.101b and net profit increased 9.6% to $586.5m.

• EBIT increased 24.4% to $914.7m; excluding specified items, base operating performance EBIT grew 40%.

• New contracts totaled $14.8b; the year-end order book reached $27.4b, with $7.9b expected to be delivered in 2024.

Financial highlights

• FY2023 EBITDA rose 16.3% to $1,456.1m and PBT increased 17.9% to $704.2m; base operating performance net profit grew 24%.

• 2H2023 revenue increased 9.9% to $5,238m; EBIT rose 34.2% to $470.5m and net profit climbed 19.9% to $305.9m.

• Net finance costs increased 52.9% YoY to $210.4m.

• Operating cash flow rose to $1.179b from $673m in FY2022; investing cash outflow was $201m versus $4.571b, while financing cash outflow was $1.226b versus $3.698b inflow.

• Unit operating expenses per unit of revenue declined to 11.4% from 12.1%, reflecting cost reductions and efficiency initiatives.

Outlook and guidance

• Focus remains on executing the $27.4b order book, including $7.9b expected to be delivered in 2024, while pursuing sustainable growth.

• Capacity expansion and capability investments support future growth; FY2023 capex exceeded $500m.

• Digital business revenue was $463m in 2023, on track to exceed the 2026 target of more than $500m.

• Satcom priorities include a next-generation platform brand unveiling in 1H, cost optimisation, process improvements, pricing and contract management.