SINGAPORE - ST Engineering obtained a $430 million contract from the Kaohsiung City Mass Rapid Transit (MRT) Bureau in Taiwan, the technology and engineering group said on Friday.

 

It will lead systems integration and project management for the new Kaohsiung MRT Red Line South Extension.

 

Also known as the Siaogang-Linyuan Line, the 11.27km line comprises six underground stations and one elevated station.

 

The project includes providing an automatic fare collection system, platform screen doors and depot equipment, among other services.

 

ST Engineering Urban Solutions will begin working on the project in mid-2023 over a period of nine years. 

 

When completed in 2030, the Red Line South Extension will run through three national industrial parks in southern Taiwan and connect to Kaohsiung MRT&rsquo s existing Red and Orange lines. 

 

The company said the contract will add to ST Engineering Urban Solutions&rsquo global track record of 200 smart metro projects in more than 50 cities.

 

It will work with its partners to deliver the signalling system and the bulk substation, while Hyundai Rotem, a consortium partner, will provide the rolling stock and power supply.

 

President of urban solutions at ST Engineering Chew Men Leong said: &ldquo This contract builds on our longstanding partnership with the Kaohsiung City MRT Bureau and represents a strong vote of confidence in our project management, systems integration and engineering capabilities.&rdquo

 

In the past two years, ST Engineering Urban Solutions has won contracts to deliver full turnkey rail services for the Kaohsiung MRT Yellow Line and the Red Line North Extension as part of consortiums.

Singapore Technologies Engineering (ST Engineering) S63 0.28%   has reported earnings of $255.0 million for the 2HFY2022 ended Dec 31, 2022, 7.1% lower than earnings of $274.4 million in the corresponding period the year before.

 

The group&rsquo s earnings for the FY2022 came up to $535.0 million, 6.2% lower y-o-y.

 

The lower earnings for the 2HFY2022 and FY2022 were due to the lower government support grants, energy inflation, transaction and integration costs from the acquisition of TransCore and the tax-exempt effect of the jobs support scheme (JSS), but were mitigated by cost savings and growth in the business.

 

Revenue for the 2HFY2022 grew by 17.9% y-o-y to $4.77 billion as revenue across ST Engineering&rsquo s segments grew.

 

Ebit also grew by 10% y-o-y to $350.5 million.

 

In the FY2022, revenue increased by 17.4% y-o-y to $9.04 billion as all segments registered y-o-y growths in revenue.

 

See also: Riverstone Holdings reports FY2022 earnings of RM314.4 mil, 77.8% lower y-o-y due to the normalisation of ASPs

 

Ebit grew by 9% y-o-y to $735.1 million.

 

According to the group, group net profit would have been 39% y-o-y higher at $549 million on a like-for-like basis.

 

&ldquo Our group revenue grew strongly, and our underlying operating performance improved significantly by 55% y-o-y. Notwithstanding the dip in group net profit y-o-y, we made good progress in 2022 to deliver against our five-year plan (Investor Day targets for 2022-2026),&rdquo says Vincent Chong, group president & CEO of ST Engineering.

 

During the 2HFY2022, the group&rsquo s Commercial Aerospace segment saw revenue increase by 19% y-o-y to $1.59 billion due to strong business recovery, benefitting from the recovery in aviation. Ebit was up by 49% y-o-y to $118 million. The segment is said to see &ldquo further improvement, especially in the Asia Pacific region and with the re-opening of China,&rdquo says Chong.

 

The Urban Solutions & Satcom (USS) segment saw revenue improve by 53% y-o-y to $1.01 billion with contribution from TransCore. Ebit was up by 176% y-o-y to $41 million despite the expenses from the acquisition and a weaker Satcom performance. To Chong, the transitioning of TransCore was &ldquo smooth&rdquo . The move also &ldquo demonstrated good contract win momentum (including the New Jersey tolling contracts).&rdquo

 

&ldquo As planned, TransCore is now cash flow positive, and we expect it to be earnings accretive from the second year of acquisition. We see abundant opportunities to derive synergies from this strategic acquisition,&rdquo says Chong.

 

Defence & Public Security saw revenue grow by 5% y-o-y to $2.16 billion although ebit fell by 15% y-o-y to $191 million from the impact of energy inflation and lower government support. In this segment, the losses relating to the US Marine business have been eliminated after the divestment, says Chong. &ldquo This was a result of our continued focus to high-grade our business portfolio.&rdquo

 

In the 4QFY2022, the group secured new contracts of $2.8 billion, bringing its new contract value for FY2022 to $13.1 billion. As at Dec 31, 2022, the group&rsquo s order book stood at $23 billion, 50% higher than its pre-Covid levels. The group says it expects to deliver about $7.2 billion from the order book in 2023.

 

Noting the winning of sizeable new contracts culminating in its &ldquo robust&rdquo order book, Chong notes that this is a &ldquo leading indicator of future growth&rdquo .

 

&ldquo All factors considered, we are well positioned and are optimistic about our future to deliver strong shareholder value,&rdquo he says.

 

For the period, the group has proposed a final dividend of 4.0 cents per ordinary share, bringing the total dividend for the FY2022 to 16.0 cents per share. The group announced that it will declare quarterly dividends on Feb 25, 2022.

 

The total dividend translates to a dividend yield of 4.5%.

 

As at Dec 31, 2022, cash and cash equivalents stood at $601.7 million.

 

DEFENCE and engineering group ST Engineering has acquired the site and assets of an existing shipyard at 55 Gul Road in Singapore from Keppel FELS &ndash a subsidiary of Keppel Corp&rsquo s offshore and marine arm &ndash for S$95 million.

 

The group will be using the shipyard for its commercial ship repair business under its marine segment, it said in a bourse filing on Thursday (Feb 2). The assets acquired include three floating docks, existing buildings, workshops, and machinery.

 

The new Gul yard will replace ST Engineering&rsquo s existing Tuas shipyard, whose lease is expiring end-2024. The group has another shipyard at Benoi which is mainly for shipbuilding.

 

The Gul yard has a remaining lease until August 2030, which can be extended by another 20 years. The yard is approximately 141,000 square metres (sq m) and has a gross built-up floor area of 74,593 sq m.

 

The purchase of the Gul yard removes the need to build a greenfield shipyard, which would &ldquo require much higher construction and material costs as well as lead time&rdquo , ST Engineering said.

 

To &ldquo maintain its competitiveness in the ship repair segment&rdquo , the group added that the Gul yard will be progressively upgraded to a smart shipyard, adopting end-to-end digitalisation that will power the ship repair cycle and processes. The yard will also be used to support the group&rsquo s other marine segments, such as module fabrication and offshore renewable projects.

 

&ldquo Taking over this brownfield site versus constructing a replacement greenfield site is an effective way to minimise capex,&rdquo said Ng Sing Chan, president, marine of ST Engineering.

 

&ldquo More importantly, building on the existing infrastructure and facility enables us to start operating immediately and effectively with minimal disruption to our operations.&rdquo