Technology upgrades will include a new cloud-based bus fleet management system

 

SINGAPORE Technologies Engineering&rsquo s (ST Engineering : S63 -0.99%) urban solutions unit has secured more than S$175 million in contracts from the Land Transport Authority (LTA) to upgrade technologies for LTA&rsquo s fleet management system, fare collection, as well as power and communications systems.

 

The group on Thursday (May 2) said this will &ldquo modernise&rdquo Singapore&rsquo s public bus fleet and operations.

 

The infrastructure upgrading exercise will be implemented progressively from the second quarter of 2024 and completed by 2027.

 

It will cover about 5,800 public buses.

 

ST Engineering said it sees the exercise as &ldquo integral to improving operational efficiencies for LTA and public transport operators, translating into improved service and travel experiences for bus commuters&rdquo .

 

Technology upgrades will include a new bus fleet management system, which will operate on a cloud-based architecture and be integrated with electric bus and charging infrastructure capabilities.

 

New fare collection equipment onboard the buses will run on a 5G network, and feature a single unified display that combines both fare collection and fleet management applications. This will replace the two separate displays currently used by bus captains.

 

Central junction boxes will be installed on the buses to improve power and signal distribution.

 

A new 5G enabled bus transmitter system is also expected to allow faster, more reliable data exchanges between the vehicles and backend systems.

 

&ldquo The technology upgrade will not only enhance system connectivity and functionality that benefits commuters and the transport ecosystem, but will also pave the way for future innovations in commuter travel,&rdquo commented Chew Men Leong, president of Urban Solutions, ST Engineering.

For years, the Singapore Airshow, despite its name, has been the ideal setting for Singapore Technologies Engineering S63 0.5% (ST Engineering) to show off its new range of products beyond the aerospace industry.

 

At the most recent edition of the airshow held between Feb 20 and Feb 25, the The Terrex s5, the latest variant of the 8x8 armoured carrier, featuring advanced electronics and a hybrid engine option (for creeping up on unsuspecting foes), took centre stage within the 2,000 sqm space occupied by the company.

 

Meanwhile, the curious-looking AirFish Wing-in-Ground (WiG) craft, which can fly just above the water at 90 knots, is designed to be a faster and smoother alternative to ferries. And, of course, there is the NextGen Singapore Assault Rifle, positioned as a potential replacement for the SAR21, the standard issue firearm of the country&rsquo s military for over two decades.

 

&ldquo Our showcase exemplifies our group&rsquo s collective engineering capabilities and domain expertise, highlighting our ability to deliver comprehensive solutions that create meaningful impact,&rdquo says Ravinder Singh, group chief operating officer of ST Engineering. In an earlier chapter of his career as Singapore&rsquo s former chief of army, Singh would have been using ST Engineering&rsquo s products instead of marketing them.

 

On Feb 21, the second day of the airshow, Turkish-based Eurasia Mobility Solutions signed a letter of intent for up to 10 AirFish to be delivered in 2025 to serve the country&rsquo s tourism and private transportation sectors.

 

Given the international nature of the defence industry and the thousands of overseas trade visitors, ST Engineering has interested many of them, especially those from Europe and the Middle East in looking closely at what is available.

 

Decades after ST Engineering diversified into commercial business, its original business of selling arms remains a core business, generating both quantum and growth momentum.

 

Of the $3.1 billion in new orders won by all three of ST Engineering&rsquo s business segments in the most recent 4QFY2023 ended December 2023, the defence and public security (DPS) segment recorded the largest quantum of $1.5 billion.

 

The new contracts consisted of cloud, AI-enabled mission-critical command and control systems and cybersecurity functions for its digital systems. They also included new contracts for 40mm ammunition, ship repair, and maintenance services, including the mid-life upgrade of the Republic of Singapore Navy&rsquo s Formidable-class frigates.

 

Singh, who wears another hat as president of the DPS segment on top of his group COO role, says ST Engineering invests continuously to build up capabilities in new technologies, especially in AI, cloud and cybersecurity, to win orders in these new growth areas.

 

&ldquo We also believe that the market demand we saw during the airshow is there for digital systems and cyber businesses, so we expect that growth,&rdquo says Singh, speaking at the company&rsquo s FY2023 results briefing on Feb 29.

 

In 2HFY2023, the DPS segment&rsquo s revenue held steady at $2.13 billion versus 2HFY2022.

 

However, ebit grew 40% y-o-y to $267 million in the same period, thanks to a more profitable mix of products sold. For FY2023, DPS generated a total revenue of $4.3 billion or 42% of ST Engineering&rsquo s total for the year. Ebit was up 40% over FY2022 to $567.4 million.

 

&ldquo I think DPS had a very good year,&rdquo says the group president and CEO Vincent Chong.

 

On the other hand, the commercial aerospace (CA) segment is recovering steadily from the pandemic. In 2HFY2023, it generated revenue of $2.05 billion, up 29% y-o-y, bringing the total for FY2023 to $3.9 billion, or 39% of the company&rsquo s total. Ebit for 2HFY2023 jumped 35% y-o-y to $159.7 million while it was up 12% y-o-y to $337.2 million for FY2023.

 

Notably, revenue from CA&rsquo s maintenance, repair and overhaul (MRO) sub-segment jumped 41% y-o-y to $1.96 billion, in line with the recovery of the global aviation industry. Chong is happy to report that CA is &ldquo really climbing up&rdquo and that &ldquo we will see more momentum&rdquo .

 

In 4QFY2023, the CA segment won contracts worth $1 billion, including heavy maintenance contracts with Chinese airlines for CFM56-7B engines, a heavy airframe maintenance contract for an American airline and a landing gear overhaul contract for an Oceania airline.

 

To expand its addressable market, ST Engineering has equipped itself to work on additional aircraft types such as the A320neo, the 737 MAX and the A350, says Jeffrey Lam, president of CA. &ldquo So beyond just keeping up, we increase the activity level for investments in the future, for retooling, training, and so on. So really, we look at CA as a growth business,&rdquo he adds.

 

More projects to share

 

In terms of revenue contribution, the urban solutions and satellite communications (USS) division may be the smallest among the three, at 19%. However, this is also where the company has something to cheer about.

 

TransCore, the US traffic management business acquired in March 2022 for US$2.7 billion, has turned earnings-accretive three months ahead of schedule.

 

&ldquo We are very heartened by the pipeline of projects, both in our core and also in synergistic ones, as well as our ability to put synthesiser solutions together within the group to address new market opportunities. There will be more to come, and we have more projects to share,&rdquo says Chong.

 

In FY2023, USS revenue grew by 10% y-o-y to $1.94 billion but ebit was down 66% y-o-y to $10 million, no thanks to continuing challenges faced by Satcom as well as divestment loss incurred from a satellite antenna venture. Chong, calling Satcom a &ldquo growth sector&rdquo , remains optimistic about the prospects of this business and that ST Engineering will soon unveil a next-generation platform. &ldquo This all underscores the growth potential in this particular industry.&rdquo

 

Meanwhile, thanks to the urban solutions part of USS, in 4QFY2023, USS secured an order book of $645 million. This consists of a mix of platform screen door solutions and electronic tolling systems contracts across Canada, Australia, India and the US. Satcom

also secured ground infrastructure contracts in the government, enterprise and cellular backhaul segments across Asia, the US, the Middle East and Latin America.

 

All in, ST Engineering&rsquo s FY2023 earnings increased by 9.6% y-o-y to $586.5 million on the back of 11.8% y-o-y growth in revenue to $10.1 billion. The company will maintain its next quarterly dividend at four cents, bringing the FY2023 total to 16 cents, represent-

ing a payout ratio of 85%. Its order book as at the end of FY2023 was $27.4 billion, just a shade lower versus the all-time high of $27.7 billion two quarters ago.

 

Revised target prices

Analysts like what they see, as they raise their target prices while keeping buy or equivalent calls. PhillipCapital&rsquo s Peggy Mak was the exception. She kept her already bullish target price of $4.50 but downgraded her call from &ldquo buy&rdquo to &ldquo accumulate&rdquo , citing ST Engineering&rsquo s share price that has gained in recent weeks.

 

Roy Chen of UOB Kay Hian, citing the company&rsquo s strong order book and guidance of higher order book revenue conversion, expects ST Engineering&rsquo s revenue to grow 8.9% to reach $11 billion in the current FY2024, which will be two years ahead of the com-

pany&rsquo s target of FY2026.

 

Furthermore, Chen expects the company to extract better operating leverage as it ramps up the commercial aerospace segment, thereby lifting margins. Higher contributions from TransCore will also help drive ST Engineering&rsquo s core net profit to grow at a CAGR of 10.2% between FY2023 and FY2026.

 

While keeping his &ldquo buy&rdquo call, Chen has a raised target price of $4.50 from $4.20 previously.

 

Meanwhile, OCBC Investment Research is &ldquo encouraged&rdquo to see the company driving better operational leverage to gain better margins. OCBC, which raised its target price to $4.60 from $4.45, has also given the thumbs-up to how ST Engineering is willing to rationalise underperforming assets and is actively recycling capital to rein in gearing levels.

 

Jason Sum and Suvro Sarkar of DBS Group Research, in their March 1 report, reiterate their view that ST Engineering is no longer the traditional defensive stalwart with stable dividends but limited growth. Since 2018, it has made key acquisitions such as TransCore but has also intensified investments in its organic capabilities to capture future growth areas better. &ldquo We believe these proactive steps position ST Engineering to achieve mid-to-high single-digit revenue growth over the long haul,&rdquo the DBS analysts say.

 

&ldquo While ST Engineering&rsquo s share price has been trending sideways for some time, we believe it is on the cusp of a breakout as the company shifts back into growth mode starting,&rdquo say Sum and Sarkar, as they raise their target price to $4.80 from $4.50.

 

SINGAPORE Technologies Engineering&rsquo s (ST Engineering) : S63 0%net profit for the second half ended Dec 31, 2023, rose 19.9 per cent to S$305.9 million from S$255 million in H2 FY2022.

 

On Thursday (Feb 29), the defence and engineering group attributed its bottom-line increase to strong business growth, higher productivity and cost savings.

 

Revenue for H2 FY2023 rose 9.9 per cent to S$5.2 billion versus S$4.8 billion a year prior, largely due to higher contributions from the commercial aerospace segment, where revenue grew 29 per cent year on year to S$2.1 billion.

 

Defence and public security revenue remained flat at S$2.1 billion in the absence of contributions from the recently divested US marine business.

 

The urban solutions and satellite communications (satcom) business registered a 4 per cent year-on-year revenue growth to S$1.1 billion, due to contributions from transport solutions provider TransCore, which the group had completed acquisition in 2022 for US$2.7 billion. This was offset by weaker contributions from satcom, though the group said transformation efforts since mid-2023 are &ldquo on course to drive better future performance&rdquo .

 

Group earnings before interest and tax (Ebit) grew 34.2 per cent to S$470.5 million, driven by growth across all business segments.

 

ST Engineering&rsquo s board proposed a final dividend of S$0.04 per share, unchanged from the previous year. This would bring the group&rsquo s dividend for the full year to S$0.16 per share, similar to FY2022.

 

Earnings per share for the full year rose 9.6 per cent to S$0.1882, from S$0.1718 in FY2022.

 

On a full-year basis, net profit was up 9.6 per cent to S$586.5 million as revenue climbed 11.8 per cent to S$10.1 billion, the highest recorded.

 

Net asset value per share was S$0.7896 as at end-December 2023, slightly higher than S$0.7703 as at end-2022.

 

Group president and chief executive officer Vincent Chong said that the strong full-year results were supported by productivity and cost-saving measures, as well as investments made during the Covid-19 downturn. &ldquo Our investment in TransCore became accretive in FY2023, ahead of plan,&rdquo he added.

 

ST Engineering&rsquo s biggest-ever acquisition did better in H2, both in terms of revenue and Ebit margin, and has a few projects in the pipeline, he added during an earnings call on Thursday after the financial results release.

 

As at end-2023, ST Engineering&rsquo s order book stood at S$27.4 billion after including new contract wins and adjusting for revenue delivery. The group expects to deliver about S$7.9 billion from its order book in 2024.

 

DBS Group Research, in a note published after the financial results were released, wrote that the group&rsquo s FY2023 revenue was slightly above its expectations by 2 per cent.

 

The research house noted that the aerospace division should continue to benefit from a sustained rebound in global travel activity. It also anticipates higher output rates in the original equipment manufacturing business, as the group is expected to open more passenger-to-freighter conversion lines while Airbus ramps up its production of A320neo aircraft. &ldquo However, cost inflation is still a concern given lingering supply chain disruptions and a tight labour market,&rdquo it added.

 

Jeffrey Lam, president for the commercial aerospace division, pointed out in the earnings call that inflationary pressure is &ldquo abating gradually&rdquo . In the US where the labour market is tight and demand is huge, these factors have driven some inflation, but he said that ST Engineering has been able to keep labour cost in 2023 &ldquo very moderated&rdquo .

 

Chong added that the group always tries to pass the increase in costs to the market. Also, the group managed to cut its unit operating expenses to 11.4 per cent in 2023 from 12.1 per cent in the year-ago period.

 

DBS observed that other parts of the group&rsquo s urban solutions and satcom business also &ldquo seem to be performing well&rdquo , with the digital business&rsquo revenue growth in the latest financial year &ldquo suggesting considerable room for upside&rdquo .

 

The research house had a &ldquo buy&rdquo call on the stock with a price target of S$4.50 as at Nov 14, 2023.

 

Singapore Technologies Engineering (ST Engineering), the global technology, defence and engineering company, is riding on an upward trajectory for the year, with a near-record $27.5 billion order book, improving financials and strategic acquisitions.

 

In its business update for 9MFY2023 ended Sept 30, 2023, the company reported revenue of $7.3 billion, 12% higher y-o-y from $6.5 billion in 9MFY2022. Notably, its commercial aerospace segment saw a 30% y-o-y growth in revenue to $2.83 billion, while its urban solutions and satcom segment (USS) recorded 13% y-o-y growth to $1.36 billion.

 

On the other hand, its other key segement, defence and public security, reported revenue of $3.09 billion for 9MFY2023, down 1% y-o-y. ST Engineering attributes the positive growth momentum to its strategic initiatives. These include efficient cost management like the 20% reduction in headcount of its USS segment&rsquo s satcom business portfolio in 1HFY2023, which should reduce costs by $30 million to $60 million over the next five years.

 

MRO business revving up

 

It is also betting on the recovery and longer-term growth of its key aircraft maintenance, repair and overhaul (MRO) business. On Sept 22, 2023, the company held the ground-breaking of its new 84,000 sq m (about 904,200 sq ft) facility at Changi Creek, located at the northern end of Changi Airport&rsquo s runway.

 

Once ready, the facility will have four hangar bays, with the first ready in mid-2025 and the remaining three primed for service by 2026. Once fully operational, the Changi Creek facility will provide an additional 1.3 million man-hours annually, roughly equivalent to 10% of ST Engineering&rsquo s existing global airframe MRO capacity.

 

According to a 4Q2023 outlook by DBS&rsquo s CIO office a few days later, channel checks indicate that the MRO market is becoming increasingly tight due to the post-pandemic surge of global air passenger activity. &ldquo While airlines still have a backlog of deferred maintenance to clear, we anticipate that MRO operators will experience increased demand over the next few years due to widespread technical issues with new generation engines, as well as prolonged

 

OEM (original equipment manufacturer) delivery delays that have prompted airlines to postpone the retirement of older aircraft,&rdquo says DBS.

 

With the announcement of the Changi Creek facility, ST Engineering also quickly announced related MRO contract wins from two customers, Indonesia&rsquo s Lion Air Group and Japan Airlines, and a multi-year contract to provide Japan Airlines with component maintenance-by-the-hour and othe related services. The company also entered into a collaboration agreement on Sept 27, 2023, with Quickstep Holdings, Australia&rsquo s largest independent aerospace engineering company, to establish a regional component pool in Australia, supporting both Boeing and Airbus aircraft.

 

The company has also been winnin its fair share of military contracts &mdash afte all, this was how ST Engineering got started decades ago. Under the company&rsquo s DP segment, an 18-month service support contract was signed to provide naval MRO fotwo patrol vessels that currently belong to the Royal Brunei Navy. On Dec 14, 2023 another contract was announced with Singapore&rsquo s Ministry of Defence to upgrade the Formidable-class frigates for the Republic of Singapore Navy

 

The frigates&rsquo marine an electrical systems will be upgraded progressively, with the first upgrading expected to be completed in 2028

 

This contract follows an earlier contract given by Singapore to build a new fleet of six so-called multi-role combat vessels estimated by some analysts to be worth $1.8 billion

 

Beyond this, ST Engineering has also won a contract to design, build and take the lead for system integration and overall project management of Abu Dhabi&rsquo s first multimodal Intelligent Transportation Central Platform over 31&frasl 2 years until 2027

 

Also, on Dec 13, ST Engineering announced its intention to fully acquire cryptography firm D&rsquo Crypt for an initial consideration o $67 million. In addition to the initial consideration, the deal includes an earn-out consideration of $5 million if certain earning targets are met. For the 1HFY2023 ende June 2023, D&rsquo Crypt&rsquo s unaudited book value and net tangible assets stood at aroun $48.1 million and $46.1 million, respectively.

 

There will also be integration expenses of about $2.7 million, which will be spread over three years. ST Engineering expects to complete the transaction in 1QFY2024

 

Regarding the acquisition, RHB Bank Singapore analyst Shekhar Jaiswal write in his Dec 15, 2023 note: &ldquo We view the acquisition positively as it further strengthen ST Engineering&rsquo s cyber business, which is a trusted provider of end-to-end IT and operating technology cybersecurity solution for critical infrastructure and high-security enterprises.&rdquo

 

&lsquo Compelling growth story&rsquo

Analysts from DBS Group Research hav raised their target price for the company following the most recent 3QFY2023 earnings as they see the company as no longer just a &ldquo defensive stalwart&rdquo but also a &ldquo compelling growth story&rdquo .

 

In their Nov 14 note, Jason Sum and Suvro Sarkar cite moves such as the Transcor acquisition plus the organic investments into future growth areas as reasons for their view.

 

For one, Transcore will be earnings-accretive in the second year following the acquisition, as more projects are won.

 

&ldquo These proactive steps position ST Engineering to achieve mid-single-digit revenu growth over the long haul, in our view,&rdquo the analysts state, as they keep their &ldquo buy&rdquo call and raise their target price from $4.20 t $4.50. They project earnings growth of between 15% and 20% for the coming year versus just 3%&ndash 5% seen for the current FY2023. A potential increase in its dividends&mdash which is now at four cents per quarter&mdash could also catalyse a re-rating, the DBS analysts say.

 

Over the past three years, ST Engineering&rsquo s share price has traded within a relatively narrow range, reaching a low of $3.19 on Oct 17, 2022, and a high of $4.14 on March 28, 2022.

 

According to consensus calls, ST Engineering has some upside from the current level of $3.80 as of early February. According to Bloomberg data, as of Feb 1, thereare 12 &ldquo buy&rdquo calls, with Lorraine Tan from Morningstar the most bullish with her target price of $4.57. Citi Research&rsquo s Jame Osman is the most bearish with his sole &ldquo neutral&rdquo call and $3.76 target price.

 

 

ENGINEERING services company Tee International is proposing to acquire a sign and advertising display manufacturer for S$14 million, it announced on Thursday (Dec 14).

 

The mainboard-listed company said in a bourse filing that it has entered into a legally binding term sheet with the shareholders of Carats& Co Pte Ltd to acquire the entire issued and paid-up share capital of the manufacturer.

 

Carats& Co is a manufacturer of signs and advertising displays, including the design, supply, fabrication and installation of digital and non-digital signs and displays.

 

Tee International said that the proposed acquisition is a strategic investment by the group as the manufacturer&rsquo s existing business is complementary to its previous core engineering and construction business segment.

 

The group anticipates that the acquisition will allow it to leverage Carats& Co&rsquo s market access and technical knowledge, and represents a strong opportunity for it to expand its business and operations, allowing it to achieve more consistent and sustainable financial growth.

 

The proposed acquisition comes after the group applied for a further extension of time to submit its revised trading resumption proposal in October.

 

The company said in the regulatory filing that it is still working on the revised proposal, which will provide more details on how its proposed business plan will be able to support the group to operate as a going concern, upon the completion of its business and debt restructuring.

 

Trading in Tee International&rsquo s shares has been suspended since June 2021.

 

SINGAPORE &ndash ST Engineering will acquire cryptographic technology company D&rsquo Crypt from an indirect subsidiary of StarHub, both parties said separately on Dec 13.

 

The transaction, which is cash-free and debt-free, comprises an initial consideration of $67.5 million, subject to certain adjustments, and a $5 million earn-out consideration, conditional upon meeting a stipulated earn-out milestone.

 

The move aligns with ST Engineering&rsquo s strategy to grow its cyber business, which provides end-to-end information technology and operational technology cyber-security solutions for critical infrastructure and high-security enterprises.

 

The divestment will allow StarHub to optimise its resources on other businesses that will elevate the execution of its 3C (cloud, cyber security and connectivity) strategy.

 

Its cyber-security business, in particular, will focus on developing platform-based offerings.

 

D&rsquo Crypt, which operates profitably at the entity level, specialises in cryptographic tech design.

 

It also offers solutions in encrypted communications, single-chip crypto tokens, secure computing and high-performance computing.

 

ST Engineering expects the proposed acquisition to be cash flow-positive from the first year and earnings accretive by the second year post-completion.

 

This is after factoring in financing costs, transaction and integration expenses, and amortisation of intangibles.

TECHNOLOGY and engineering group ST Engineering : S63 -1.57% reported a 9 per cent increase in revenue to S$2.4 billion for the third quarter ended September, from S$2.2 billion a year prior.

 

On Friday (Nov 10), the mainboard-listed company also proposed a third-quarter interim dividend of S$0.04 per share, to be paid on Dec 1. This would bring the group&rsquo s dividends to date to S$0.12 per share, after a first-quarter and second-quarter dividend of S$0.04 each.

 

For the nine months ended September, ST Engineering&rsquo s revenue stood at S$7.3 billion, or 12 per cent higher than the S$6.5 billion for the same period a year ago. This was mainly driven by the group&rsquo s commercial aerospace segment, which reported a 30 per cent increase in contributions to S$2.8 billion from S$2.2 billion in the first nine months of FY2022.

 

The group&rsquo s chief financial officer Cedric Foo said in a call after the release of the Q3 market updates that higher demand for air travel in the Asia-Pacific is expected. This could, in turn, raise the demand for maintenance, repair and overhaul (MRO) services and &ldquo represents further upside for our commercial aerospace segment&rdquo .

 

ST Engineering has several hangar sites in Asia for MRO.

 

But Jeffrey Lam, president of commercial aerospace, acknowledged that the market is &ldquo very competitive&rdquo , and that it would be challenging for players to raise prices. He added that competition for labour supply and infrastructure is also keen.

 

Vincent Chong, group chief executive, added that ST Engineering nevertheless expects the margins for passenger-to-freighter conversions to continue to improve, and be Ebit-positive this year. Ebit is earnings before interest and tax.

 

The profit metric, in percentage terms, is expected to be a low single digit this year and a middle- to high-single-digit in the next two years thereafter, it will be 10 per cent or more.

 

Contributions from the urban solutions and satellite segment rose 13 per cent on the year to S$1.4 billion from S$1.2 billion, mainly due to contributions from the group&rsquo s subsidiary, TransCore.

 

However, this was partly offset by lower revenue from the satellite communications business, which faced bigger-than-expected challenges in executing its transformation.

 

The group said it still expects full-year Ebit contributions from this segment to be profitable, though it is likely to be lower than in FY2022 due to the challenges in the satellite communications business, which is being restructured.

 

ST Engineering estimates severance costs for this sub-segment to come in at S$7 million for the whole of FY2023, from just S$2 million in H1.

 

The management said during the update call that the satellite communications business continues to look at cost and process efficiencies, as well as generating more revenue. When asked if any severance expense would be recognised next year, no definitive answer was given.

 

TransCore, however, remains on track for a second year of earnings accretion, following the group&rsquo s completion of its acquisition.

 

Defence and public security revenue was down 1 per cent to S$3.09 billion from S$3.12 billion the previous year. Lower contributions from this segment were the result of the absence of revenue from the US marine business, which was divested in Q4 of FY2022.

 

ST Engineering said revenue in defence and public security would have grown 6 per cent, excluding the US marine business.

 

As at end-September 2023, the group&rsquo s order book stood at S$27.5 billion, up 20 per cent year on year from S$23 billion. Of that sum, S$11.7 billion were new contracts for the period under review. 

 

Orders worth about S$2.5 billion from this year&rsquo s order book are expected to be delivered in the remaining months of 2023.

 

Over the third quarter alone, the group reported S$2.2 billion in new contract wins, which were mainly from the defence and public-security segment.

 

DBS Group Research noted that this represented a drop from the contract wins in the previous two quarters, which had ranged from S$4.7 billion to S$4.9 billion.

 

But it added that the fall was &ldquo not a cause for concern&rdquo because Q3&rsquo s S$2.2 billion was a &ldquo normalised&rdquo level, and that contract wins in the previous two quarters were higher than usual.

 

CEO Chong said: &ldquo I want to say that the order book ebbs and flows by the quarter, so we are not focused on any individual quarter&rsquo s order book or new contract wins, but generally, the trajectory and the momentum has been very healthy.&rdquo

 

Meanwhile, ST Engineering is monitoring the situation for supply-chain disruptions, though the impact for now is &ldquo very minor&rdquo , Chong added. &ldquo We certainly have mitigating steps in place to address the near-term impact, but as I&rsquo ve said, it&rsquo s something very minor.&rdquo

 

While ST Engineering&rsquo s third quarter revenue marginally exceeded expectations, DBS said it expects the group&rsquo s satellite communications business to remain a drag on overall earnings.