Group has declared an interim dividend of S$0.04 per share for the period digital business on track to exceed 2026 revenue target

 

ST Engineering : S63 0% posted an 18.1 per cent rise in group revenue to S$2.7 billion for the first quarter ended Mar 31, 2024, it said in a business update.

 

The group attributed the gain to higher contributions from its commercial aerospace as well as defence and public security segments, which recorded double-digit revenue growth.

 

It has declared an interim dividend of S$0.04 per share for the quarter, payable on Jun 5 after the record date on May 23.

 

Commercial aerospace revenue was up 32 per cent to S$1.2 billion from S$873 million on broad-based growth. Notably, the group&rsquo s engine maintenance, repair and overhaul (MRO) operations registered strong growth.

 

This segment had &ldquo all engines firing&rdquo this quarter according to Jeffrey Lam, president, commercial aerospace, ST Engineering. The segment was able to ride on increased flying hours as well as slower-than-expected new engine introductions.

 

&ldquo Generally speaking you also saw that February 2024, air traffic growth has exceeded pre-Covid, so we are seeing the whole market recovering strongly across all segments,&rdquo he said.

 

ST Engineering&rsquo s defence and public security unit posted a 14 per cent year-on-year revenue increase to S$1.1 billion from S$982 million. There was growth in all sub-segments, with the group&rsquo s digital business well-positioned to exceed its 2026 revenue target.

 

In contrast, revenue from its urban solutions and satellite communications (satcom) segment slipped 1 per cent to S$429 million from S$434 million in the same period last year.

 

The group obtained S$3 billion in new contract wins during the quarter. Its defence and public security segment recorded the highest contract value at S$1.7 billion, followed by its commercial aerospace segment, which bagged S$839 million in contracts.

 

The urban solutions and satcom business, meanwhile, recorded S$542 million in new contracts.

 

The digital business, comprising of cloud, artificial intelligence analytics and cybersecurity is expected to exceed the 2026 revenue target of S$500 million. Revenue growth for the last two years have grown over two-and-a-half times, said Ravinder Singh, president, defence and public security, ST Engineering, with Q1 2024 revenue at S$147 million.

 

&ldquo Generally, the momentum for digital business is strong,&rdquo he said.

 

ST Engineering currently has about 550 cybersecurity specialists and about 300 cloud and AI engineers. The company will grow the number of cloud and AI engineers to &ldquo at least 500&rdquo added Singh, as it focuses on talent development as well as product innovation.