ing ST Engineering: S63 +1.24% (ST Engineering) saw its net profit for the first half of FY2021 rise 15 per cent to S$296.1 million from S$257.4 million the previous year.

 

In a bourse filing on Thursday morning, the group said its bottom line improvement largely came from better operating performance of its urban solutions and satellite communications as well as defence and public security segment

 

Earnings per share for the six months ended June 30, 2021 grew 15 per cent to 9.5 Singapore cents, from 8.26 cents for the corresponding period last year.

 

The board of directors has approved an interim dividend of S$0.05 per share, unchanged from the previous year. It will be paid on Aug 31, 2021.

 

As at end-June 2021 the group' s estimated order book value stands at S$16.8 billion, of which it expects to deliver some S$3.6 billion in the remaining months of 2021.

 

" 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," said Vincent Chong, group president and chief executive of ST Engineering.

DEFENCE and technology group ST Engineering has set up a joint venture (JV) with Temasek for freighter leasing. This will address the growing demand for freighter aircraft as e-commerce and air cargo volumes expand globally, ST Engineering announced on Wednesday.

 

Temasek will have a 50 per cent stake in the JV, Juniper Aviation Investments. ST Engineering Aerospace Resources, a unit of the mainboard-listed company, will hold the other half.

 

Juniper targets to build a portfolio valued at about US$600 million within five years, investing in passenger aircraft to be converted into freighters. ST Engineering will provide maintenance, repair and overhaul service options for these aircraft. It will also be the asset and lease manager to the JV, in line with its aviation asset-management business model.

 

The JV will set up a subsidiary to hold special-purpose companies for freighter owning and leasing. Its incorporation is not expected to have any material impact on ST Engineering' s earnings per share in the current financial year.

 

ST ENGINEERING on Wednesday announced that its aviation asset-management unit has signed a letter of intent to lease up to five Airbus A321 Passenger-to-Freighter (P2F) aircraft to Global Crossing Airlines (GlobalX).

 

Subject to the signing of definitive agreements, ST Engineering will acquire these five aircraft either on its own or through its joint-venture companies, and finance these aircraft through a mix of equity and non-recourse debt, said GlobalX and ST Engineering in a joint statement.

 

ST Engineering' s executive vice-president and head of aviation asset management, Yip Hin Meng, said: " We are delighted to be able to support GlobalX as it makes its foray into the growing air-freight market with our end-to-end aviation asset-management solutions.

 

" When working with ST Engineering, GlobalX can be assured of best-in-class solutions for these A321 P2F aircraft' s entry into service and maintenance, all from a single-life-cycle solution provider."

 

The aircraft will be converted and maintained at ST Engineering' s global facilities. The first one will be converted in April 2022 and placed on lease in the fourth quarter that year the remaining four will be converted and leased to GlobalX progressively.

 

As part of its end-to-end aviation asset-management solutions, ST Engineering will also provide maintenance services to these aircraft for GlobalX over the period of the lease.

 

Said Ed Wegel, chief executive of GlobalX: " We are extraordinarily pleased and honoured to be working with ST Engineering on our fleet of A321 P2F, which is a game changer in the air-freight industry.

 

" We look forward to working very closely with ST Engineering, a world-class solution provider in aircraft maintenance and freighter conversion, and subsequently in other ways as we grow GlobalX."

Singapore Technologies (ST) Engineering and Singapore investment company Temasek are setting up a 50:50 joint venture for freighter aircraft leasing to capture strong demand for converted passenger planes as e-commerce and air cargo demand grows.

 

The joint venture will aim to build a US$600 million (S$795.6 million) portfolio of mostly narrow-body planes over the next five years through a mix of equity and debt, with the partners able to pick up passenger jets for conversions at lower than usual prices due to a fall in aircraft values during the Covid-19 pandemic, they said late on Tuesday (May 11).

 

Aviation analytics firm Cirium expects the number of passenger-to-freighter conversions globally to rise by 36 per cent to 90 planes in 2021, and to 109 planes in 2022, amid growing demand for air cargo due to lower passenger flight numbers and the rise of e-commerce.

 

Air cargo demand reached an all-time high in March, up 4.4 per cent from pre-Covid-19 levels two years earlier, according to the International Air Transport Association.

 

ST Engineering, one of the world' s biggest converters of passenger jets to freighters, said it will provide the maintenance, repair and overhaul services for the planes in the joint venture' s leasing portfolio.

 

ST Engineering head of commercial aerospace Jeffrey Lam said the joint venture would allow his company to grow its aviation leasing business beyond passenger aircraft to freighters.

 

" We also welcome and look forward to working with other potential like-minded partners who are looking to invest in the strong freighter aircraft leasing market," he said.

 

" In the medium to long term, the JV (joint venture) intends to securitise the leasing income streams by way of a business trust to unlock capital."

 

Mr Uwe Krueger, Temasek' s head of industrials, business services, energy and resources, said the joint venture would look to find ways to reduce carbon emisssions.

 

The setting up of the joint venture is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

 

In a business update on Wednesday morning, ST Engineering said it had obtained more than $1.55 billion worth of new contracts in the first quarter of 2021.

 

Its defence and public security segment led the way with $610 million, excluding wins with customer confidentiality reasons. Its commercial aerospace segment secured $573 million in new contracts, while its urban solutions and satellite communications bagged $371 million.

 

The group' s order book, at $15.7 billion as at March this year, was at a level higher than before Covid-19 and contributed by all business areas. It expects to deliver $4.6 billion of the order book in the remaining months of 2021.

 

ST Engineering also said its cost-saving and productivity initiatives are " tracking well" . It saw signs of business recovery for commercial businesses, albeit from a low base, though the commercial aerospace segment remains subdued as expected.