ST Engineering pops the champagne on $13.2b orderbook in 2013

Thanks to new sealed deals in 4Q13.

According to DBS, ST Engineering's order wins were buoyed in 4Q13, with all segments reporting new contract wins in the quarter that were higher than the usual run rate. As a result, STE closed FY13 with a record orderbook of S$13.2bn despite strong revenue recognition in 4Q13.

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After an uninspiring performance in 3Q, STE reversed the trend with a solid set of numbers for 4Q13, with net profit up 10% y-o-y to S$167.5m on the back of 12% rise in revenue to S$1.9bn.

Except the Land Systems sector, all other divisions reported y-o-y growth in revenues, led by the Marine segment, where revenues were up 48% y-o-y on the back of strong project deliveries.

PBT margins were also maintained across sectors, with Group PBT margin of 11.1% flattish compared to 4Q12 and 3Q13. However, for the full year-FY13, earnings growth was only 1% due to losses from “Others” segment – largely unprofitable non-core projects undertaken by ST Synthesis – and the impairment charge on its Ropax vessel, which has since been chartered out to a Canadian cruise ferry line for 3+7 years term.

Without these items, we believe FY13 net profit of S$581m could have been up almost 6% y-o-y.