This comes as the company is targeting growth in its revenue, operating cash flow and net profit, with an objective to improve total shareholders&rsquo return

 

[SINGAPORE] ST Engineering : S63 +1.42% plans to pay out a third of its year-on-year increase in net profit as incremental dividends under a new dividend policy that will take effect in the financial year ending December 2026 and onwards.

 

The dividends will be paid on a quarterly basis and the new policy will be rolled out as the company achieves progressively higher full-year net profit, &ldquo barring unforeseen circumstances&rdquo , ST Engineering said on Tuesday (Mar 18). 

 

Shares of ST Engineering rose 2.7 per cent or S$0.17 to S$6.49 as at 9.43 am on Tuesday, after close to 3 million shares changed hands.

 

The group said that this comes as it is targeting growth in its revenue, operating cash flow and net profit, with the objective of improving total shareholders&rsquo return. It added that it intends to re-invest for growth while rewarding shareholders with dividends.

 

The group is also aiming for revenue of S$17 billion and a net profit improvement that outpaces its top line increases by up to five percentage points annually by 2029, said group chief executive officer Vincent Chong.

 

Specifically, the engineering group expects to reap S$6 billion in revenue from its commercial aerospace operations, over S$7.5 billion from defence and public security, and S$4.5 billion from smart city, added Chong at the investor day.

 

It also plans to propose a higher total dividend of S$0.18 per share for FY2025, given its current &ldquo robust&rdquo retained earnings and a &ldquo strong five-year outlook&rdquo .

 

The increased total dividend will comprise interim dividends of S$0.04 per share for each of the first three quarters in addition to a final dividend of S$0.06 per share, which will be subject to shareholder approval at its annual general meeting scheduled to be held in April 2026. 

 

This is up from the proposed total dividend of S$0.17 per share for the financial year ended December 2024, which includes a final dividend of S$0.05 per share that is subject to shareholder approval at its upcoming annual general meeting to be held on Apr 24.

 

The company will announce the record and payment date for FY2025&rsquo s dividend plan as and when the board declares an interim dividend for the first three quarters of the financial year. 

 

The final dividend is scheduled for payment in May 2026. The record date and payment date for this final dividend will be announced in conjunction with the release of the group&rsquo s full-year results for FY2025, it said.

 

Robust orderbook outlook following FY2024 earnings growth

In its latest earnings results, released on Feb 27, ST Engineering&rsquo s full-year net profit grew 19.7 per cent to S$702.3 million, from S$586.5 million in the year-ago period.

 

Its revenue rose 11.6 per cent to S$11.3 billion from S$10.1 billion, the highest recorded, as its earnings per share climbed 19.7 per cent to S$0.2253 from S$0.1882 in the previous corresponding period. 

 

Chong said that its strong performance for 2024 came despite &ldquo an uncertain and challenging environment&rdquo . 

 

He added that the company&rsquo s &ldquo robust order book and a competitive market position&rdquo will underpin its continued revenue growth and performance. 

 

ST Engineering&rsquo s order book was at S$28.5 billion as at end-2024. It expects to deliver about S$8.8 billion from its order book in 2025. 

It will also look at construction robotics, decentralised hydrogen production and marine renewables as new venture areas

 

[SINGAPORE] ST Engineering : S63 +0.95% is eyeing a revenue of S$17 billion and a net profit improvement that outpaces its top-line increases by up to five percentage points annually over the next five years, said group chief executive officer Vincent Chong on Tuesday (Mar 18).

 

The group expects to reap S$6 billion in revenue from its commercial aerospace segment, more than S$7.5 billion from its defence and public security one, and S$3.2 billion from its urban solutions and satcom unit by 2029, he added at the company&rsquo s investor day.

 

For the 2024 financial year, it posted S$11.3 billion in revenue and S$702.3 million in net profit, while its order book came in at S$28.5 billion.

 

Cedric Foo, group chief financial officer, said that the engineering powerhouse will raise its top line by improving its core businesses, among which digital business, defence, premier maintenance, repair and overhaul engines and smart mobility are key drivers.

 

He also noted that heightened geopolitical tensions and increased defence spending by some governments bode well for the group&rsquo s defence business.

 

Meanwhile, ST Engineering will look at construction robotics, decentralised hydrogen production and marine renewables as new venture areas.

 

The mainboard-listed group expects that a higher top line with scale effects, an improved product and project mix, procurement and productivity savings, and reduced interest expense will improve its net profit margin.

 

Foo said that lower costs will be derived from various initiatives, including tapping a new pool of talents at its Vietnam competency centre.

 

Dividend per share would rise in tandem with higher earnings as ST Engineering unveiled a new dividend policy that takes effect from FY2026. It plans to pay out a third of its year-on-year increase in net profit as incremental dividends, enabling it to reinvest while rewarding shareholders with a higher return.

It will maintain its research and development spending, at 4 to 5 per cent of group revenue for the next five years.

 

While noting that the Trump administration has been imposing tariffs to protect the United States since President Donald Trump took office in January, Chong said that it is &ldquo too early to tell the effects&rdquo and pointed out that 30 per cent of ST Engineering&rsquo s revenue is generated out of the US.

 

&ldquo We don&rsquo t think we would be disadvantaged over our competitors,&rdquo the helmsman added.

 

He was quick to denounce the allegation of ST Engineering&rsquo s ties with the Chinese Communist Party as &ldquo fearmongering&rdquo by Conduent, a competitor of ST Engineering&rsquo s US subsidiary TransCore that provides tolling technology and traffic management solutions.

 

Conduent is a former vendor that had lost a US$1.7 billion order from New Jersey Turnpike Authority to TransCore to provide customer service and toll payment processing. It is appealing the outcome and made the allegation about the foreign ownership ties.

 

The outcome of the appeal is not out yet, and ST Engineering has not included the deal in its order book.