SINGAPORE: Singapore Technologies (ST) Engineering will keep investing in new capabilities despite the soft global economy, said president and chief executive Tan Pheng Hock yesterday.
He cited spending in areas such as robotics or “smart nation” technologies, and 3D and 4D printing.
“We have to invest. If we don’t, we become irrelevant when the time comes,” he said at the aerospace and defence conglomerate’s third-quarter results briefing.
He said these investments will be made selectively, especially where there is growth potential for the longer term – such as the systems behind autonomous vehicles, rather than the vehicles themselves.
“You can cut (investments) in the short term (to maintain profits) but, in the long term, you will regret it because you won’t have that share of the market… and later on you will have nothing to show for it.
“We need to think about tomorrow but suffer in the short term. The spending will be there,” he said.
Mr Tan noted that despite the difficult global market, ST Engineering has been able to “weather the storm”, thanks to its diversified businesses and its value-adding role.
The group turned in a net profit of $133.3 million for the three months to Sept 30, marking 9.9 per cent growth from the $121.3 million in the same period a year ago.
This came despite revenue dipping 3.4 per cent to $1.5 billion, dragged down by lower contributions from its land systems and marine sectors.
Turnover from the marine sector slumped 39 per cent to $205 million as shipbuilding and shiprepair activity fell, while the top line for the land systems division dropped 11 per cent to $319 million.
But this was partially offset by revenue from the electronics sector, which jumped 21 per cent to $429 million, and the aerospace sector, which rose 8 per cent to $506 million.
Net profit for the nine months slipped 0.9 per cent to $388.2 million, while revenue fell 2.9 per cent to $4.56 billion.
Earnings per share for the quarter rose to 4.29 cents from 3.89 cents previously, with net asset value per share coming in at 65.23 cents as at Sept 30, up from 62.86 cents at the same time last year.
No dividend was declared for the quarter.
Mr Tan noted that the group may log weaker results for the full year, given that its aerospace sector’s maintenance, repair and overhaul business continues to experience a “prolonged softness in activities”.
Its shipbuilding performance also remains weak, both locally and in the United States.
ST Engineering, whose order book stood at $12.2 billion at the end of the third quarter, expects to deliver about $1.4 billion in orders for the rest of the year.
