The world’s largest aircraft repair company, Singapore Technologies Engineering (STEG.SI), is cautious about business prospects this year because of uncertainties over global economic growth, its CEO said on Monday. 

 

Tan Pheng Hock said the global economy appeared to have hit bottom in the fourth quarter of 2009 with a series of recent data suggesting a turnaround, but the future was difficult to predict.  

 

“We’ve reached the inflection point and countries are out of the recession," Tan told Reuters in an interview on the sidelines of the Singapore Airshow. 

 

“However, we know governments will start removing stimulus packages ... and it seems likely in the second quarter of 2010. So while improvements are there, there are also a lot of uncertainties ahead.” 

 

Tightening of monetary policy in China was another risk for the company, Tan said. 

 

“We don't know the impact from that ... we've got to watch out. We are not out of the woods yet,” he said. 

 

In the third quarter of 2009, ST Engineering reported a 7% drop in net profit partly due to absence of a tax writeback that boosted profit a year earlier.

 

Tan declined comment on the fourth-quarter performance, but said the results would be announced on Feb 18. 

 

He also said no decision had been announced yet by the Indian government on five defence contracts worth US$3 billion ($4.2 billion)for which ST Kinetics, a unit of ST Engineering, has applied. Singapore’s state investor Temasek Holdings (TEM.UL) controls more than 50% of ST Engineering.