ST Engineering H1 earnings up 19.7% at S$402.8 million on back of defence demand in Europe, Middle East

Singapore Technologies Engineering (ST Engineering) on Thursday (Aug 14) posted a 19.7 per cent increase in net profit to S$402.8 million for the first half-year ended June, up from S$336.5 million in the year-ago period.

This was driven by revenue growth, primarily from its commercial aerospace, and also its defence and public-security business segments, despite negative impact from foreign currency exchange and the US tariffs.

Earnings per share rose in tandem to S$0.1293 for H1, up from S$0.108 previously.

H1 revenue grew 7.2 per cent to S$5.9 billion, up from S$5.5 billion in the first half of the year before.

ST Engineering said H1 revenue would have grown 8 per cent if not for the impact of a weaker US dollar against the Singapore dollar on forex translation; the impact of forex translation on net profit was, however, negligible.

Revenue from the commercial aerospace segment rose 5 per cent to S$2.4 billion from S$2.2 billion. The group said the overall impact of the tariffs on its first-half results was immaterial after mitigation measures were implemented.

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Revenue from the defence and public security segment grew 12 per cent to S$2.7 billion from S$2.4 billion; that for the urban solutions and satellite communications segment was flat at S$921 million.

The group secured S$9.1 billion in new contracts for H1, which brought its total order book to S$31.2 billion as at end-June. It expects to deliver about S$5 billion from the order book in the remainder of 2025.

ST Engineering group president and chief executive Vincent Chong said: “Our strong order book continues to provide revenue visibility for the group.

“Our recent divestments are in line with our portfolio rationalisation strategy to exit non-core businesses and recycle capital. We remain steadfast in strengthening our core businesses.”

ST Engineering declared an interim dividend of S$0.04 per share for Q2 – unchanged from the previous year’s payout – to be paid on Sep 5.

Growing defence revenue

Mervyn Tan, group chief operating officer for technology and innovation and president of defence and public security, noted the contribution by international defence business to the strong results.

Crediting the performance to the local and international partnerships the group has built, he added that because of Singapore’s small size, there is a need to scale the products beyond the Republic, so that non-recurring engineering and fixed costs can be shared.

“The local customers will ... enjoy a reduction in terms of cost per unit,” he said.

Tan said that potential business opportunities for the 8x8 Terrex and Bronco All-Terrain Tracked Carrier – which are armoured vehicles – have arisen in Europe and the Middle East. He also expressed confidence that the sale of ammunition, namely the 40 mm and 155 mm, would continue into the second half as well.

“There’s simply a demand for such products in the market, especially in the Middle East and Europe,” he said.

Beyond ammunition and defence hardware, ST Engineering is also seeking to expand on its maintenance, repair and overhaul (MRO) services.

Tan singled out the Middle Eastern and North African market as an area to watch, but added that doing MRO in those regions is not new to the company.

Beyond undertaking MRO for aircraft, ST Engineering is looking for MRO opportunities for land vehicles in the Middle East.

“I think we have built a strong foundation in terms of our technical competencies,” he said.

Shares of ST Engineering closed 6.3 per cent or S$0.56 lower at S$8.40 on Thursday.