Key Financial Highlights

• 9M2025 Revenue: S\$9.1 billion, up 9% year-on-year. Excluding the divested LeeBoy business, revenue growth was even stronger at 14% for 3Q2025 and 10% for 9M2025.
• Contract Wins: S\$14.0 billion for the first nine months of 2025, including S\$4.9 billion in new contracts secured in 3Q2025 alone.
• Order Book: Record high of S\$32.6 billion as at 30 September 2025, with S\$2.8 billion expected to be delivered in 4Q2025.

Business Segment Performance

Commercial Aerospace (CA)

• Revenue: S\$3.6 billion for 9M2025, up 11% year-on-year.
• Drivers: Strong growth in Engine MRO and Nacelles segments. However, Passenger-to-Freighter (PTF) revenue was lower.
• Contract Wins: S\$4.1 billion for 9M2025, with S\$1.4 billion in 3Q2025. Notable wins include multi-year Airbus A380 heavy maintenance/cabin modification and freighter conversions for A330.

Defence & Public Security (DPS)

• Revenue: S\$4.0 billion for 9M2025, up 9%. Excluding LeeBoy, base business revenue grew 11% year-on-year.
• Contract Wins: S\$6.6 billion for 9M2025, with S\$2.4 billion in 3Q2025. Key wins include advanced cybersecurity, next-gen broadband, AI-powered 5G solutions, Earth observation satellites, and floating power plant contracts.
• Product Mix: Growth contributed by all sub-segments, including hybrid electric vehicles and ammunition for international customers.

Urban Solutions & Satcom (USS)

• Revenue: S\$1.4 billion for 9M2025, up 5% year-on-year, driven by Urban Solutions.
• Contract Wins: S\$3.4 billion for 9M2025, with S\$1.1 billion in 3Q2025. Includes rail electronics for Singapore MRT lines, intelligent transport systems, healthcare ICT in Hong Kong, and satcom infrastructure contracts in Asia, Europe, Middle East, and the U.S.

Portfolio Management and Divestments

• Divestment Gains: S\$258 million (after-tax), including LeeBoy, SPTel, and CityCab.
• Impairment Losses: S\$689 million (after-tax), primarily from iDirect Group (S\$667 million) and JetTalk (S\$22 million).
• Net Impact: (\$431 million) after offsetting divestment gains against impairment losses.
• Cash Proceeds: S\$594 million from divestments, strengthening cash position for growth investments or debt reduction.

Dividend Announcements: Ordinary and Special Dividends

• FY2025 Ordinary Dividend: Total of 18.0 cents per share (4.0 cents for each of 1Q, 2Q, 3Q interim dividends, and a proposed 6.0 cents final dividend).
• Special Dividend Proposal: Board proposes an additional 5.0 cents per share special dividend, subject to shareholder approval at the 2026 AGM. This is in recognition of the value unlocked from recent divestments and the Group’s strong financial position.
• Total FY2025 Dividend: Proposed to be 23.0 cents per share, combining ordinary and special dividends.
• Dividend Policy Update (FY2026 onwards): Company targets paying out about one-third of the year-on-year increase in net profit as incremental dividends, while maintaining quarterly dividend payouts. Major one-off effects from divestments and impairments will be excluded from the incremental dividend calculation, ensuring sustainability and predictability for shareholders.

Strategic Outlook and CEO’s Message

Vincent Chong, Group President & CEO: “Our nine-month year-to-date performance was underpinned by robust revenue growth whilst our order book reached a new high. These strong underlying results reflect the strength and resilience of our business strategy and fundamentals. The Group’s recent divestments were the result of our continual portfolio review to ensure our capital is prioritised for strategic growth areas. The divestments have unlocked value and improved our cash position. We remain financially strong to re-invest to pursue growth as we continue to focus on executing our mid-term plans.”

Key Points for Investors and Share Price Sensitivity

• Strong Revenue Growth and Record Order Book: ST Engineering’s significant revenue increase and record-high order book position the Group for future earnings growth and enhance visibility on future cash flows. This is typically positive for share price sentiment.
• Major Contract Wins: Securing S\$14.0 billion in contracts YTD and S\$4.9 billion in 3Q2025 alone demonstrate growth momentum and market competitiveness.
• Generous Dividend Plan and Special Dividend Proposal: The proposed total dividend of 23.0 cents per share, including a special dividend, represents substantial shareholder returns and may be price-sensitive, especially as the special dividend is directly tied to the Group’s successful divestment strategy.
• Portfolio Restructuring: Continued divestment of non-core assets, with S\$594 million cash proceeds, reflects management’s focus on strategic capital allocation. The offsetting impairment losses are important for investors to note as they affect net profit, but the underlying operating performance remains strong.
• Dividend Policy Clarity: The move to exclude major one-off divestments and impairments from incremental dividend calculations signals a commitment to stable, sustainable returns, which could positively influence investor confidence and share valuation.
• Strong Credit Ratings: The Group maintains top-tier credit ratings (Aaa by Moody’s, AA+ by S&P), reinforcing financial stability and capacity for future growth and shareholder rewards.

Summary

ST Engineering’s 3Q2025 market update reveals a company in robust health, with strong revenue growth, a record order book, substantial contract wins, and a shareholder-friendly dividend plan that includes a special dividend. The Group’s portfolio restructuring, large cash proceeds from divestments, and commitment to sustainable dividend growth are key takeaways for investors. These developments are likely to be price-sensitive and could positively influence the company’s share value.

Disclaimer: This article is based on ST Engineering’s 3Q2025 Market Update and is intended for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell any securities. Investors should consider their own financial circumstances and consult with professional advisors before making investment decisions. Forward-looking statements are subject to risks and uncertainties and actual results may differ materially.

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