Singapore Technologies Engineering Ltd (ST Engineering) today announced new contracts worth about SG$1.6bn (US$1.27bn), secured by its aerospace and electronics sectors in the first quarter (Q1) of 2020. These contracts are over and above a defence contract that its Land Systems arm secured.
Of this figure, the group’s aerospace division secured approximately SG$838m (US$589m) across its spectrum of aviation manufacturing and MRO businesses.
The MRO contracts included A320 heavy maintenance contracts and CFM56-7B engine maintenance contracts from Chinese airlines, and a component maintenance-by-the-hour (MBHTM) contract from a Southeast Asian airline to provide comprehensive component maintenance services for its entire fleet of Boeing 737 and Bombardier Q400 aircraft.
These Q1 contracts comprised those previously announced in February during Singapore Airshow 2020, namely: multi-year engine and component MRO contracts from a South Korean airline; a five-year nacelle maintenance contract, and a three-year airframe heavy maintenance contract.
Electronics contracts worth about SG$730m
The (ST Engineering group’s electronics sector secured around SG$730m (US$513m) worth of contracts for products and solutions in smart mobility, cybersecurity and data analytics, as well as training and simulation.
The sector’s smart mobility business expanded its footprint in India when it clinched contracts to provide platform screen doors for two underground stations in the Chennai Metro Rail Phase 1 Extension, and a contract to deliver a passenger information system for 31 trains in Mumbai Metro Line 3.
In cybersecurity, the sector secured multiple contracts for the provision of security operations centres, enhanced security monitoring services and cybersecurity advisory support for government, critical infrastructure and enterprise customers.
The sector’s data analytics business received a boost with a contract from PUB, Singapore’s National Water Agency, to enhance and maintain its Intelligent Water Management System, which will enable the agency to better meet future water demands. Its training and simulation business secured two contracts geared towards supporting experiential learning needs.
Defence contract by the Land Systems sector
In addition to the above SG$1.6bn (US$1.27bn) of new contracts, the group’s Land Systems arm secured a Phase 2 contract for the production and supply of the Hunter Armoured Fighting Vehicle from the Singapore Ministry of Defence. Under the contract, ST Engineering will also provide integrated logistics support, which includes spares, training and documentation.
Outside of these contracts, there are others that the group has secured but has not disclosed due to customer confidentiality reasons.
Due to the Covid-19 pandemic and its evolving circumstances, the group is discussing with its customers any requirements to adjust delivery schedules or address order cancellations. As at the end of Q1 2020, the group says that its order book remains ‘robust’.
The above developments are 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.