Looking beyond quarterly fluctuations in ST Engineering's growth story

Looking beyond quarterly fluctuations in ST Engineering's growth story

By: 
Benjamin Cher
17/11/18, 11:46 pm

SINGAPORE (Nov 17): ST Engineering’s latest third-quarter results have shown improvements in profitability in three of its four key business units of aerospace, electronics, land systems and marine.

In addition to the main four, there is an “others” unit, which lumps together shared services, new ventures and other related activities. It reported a loss of $7.3 million.

ST Engineering’s latest third-quarter results have shown improvements in profitability in almost all its business units.

The marine unit, on the other hand, suffered a 35% y-o-y drop in earnings to $12.8 million.

Vincent Chong, president and CEO of ST Engineering, points out that the marine unit, despite the lower y-o-y earnings and challenging conditions, was able to post its third sequential quarterly growth.

In any case, he urges investors not to be unduly influenced by the quarterly variations.

“We are really looking at long-term sustainable growth in addition to strengthening our businesses throughout the year,” he adds.

As at Sept 30, the company had a total order book of $13.3 billion, with $1.6 billion to be delivered by end-2018.

In addition to the main four, there is an “others” unit, which lumps together shared services, new ventures and other related activities. In 3Q18, the unit reported a loss of $7.3 million.

Chong is upbeat that these losses are due to start-up costs and that the spending is necessary for longer-term benefits for ST Engineering as a whole.

“You shouldn’t look at those in isolation; these are initiatives that will position us for the future. In the past, it would have manifested in the sector level rather than the group level. These are one of the changes taking place,” he says.

To find out what more Chong has to say, login to read the full story: ST Engineering on cusp of 'next leg-up' with all-round growth in this week’s The Edge Singapore (issue #857, week of Nov 19) or click here to subscribe

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