ST Engineering Delivers Robust 9M2025 Results, Sets Record Order Book and Proposes Special Dividend

Key Financial Highlights

• Revenue Growth: ST Engineering reported group revenue of S\$9.1 billion for the first nine months of 2025, marking a 9% year-on-year (y-o-y) increase. This growth was driven by strong performance across all three business segments.
• Segmental Performance:
  • Commercial Aerospace (CA): Revenue rose 11% y-o-y, led by robust growth in Engine MRO and Nacelles, partially offset by lower Passenger-to-Freighter (PTF) revenue.
  • Defence & Public Security (DPS): Achieved 9% y-o-y revenue growth, with contributions from all sub-segments.
  • Urban Solutions & Satcom (USS): Posted 5% y-o-y growth, mainly from Urban Solutions.
• Quarterly Performance: In 3Q2025, the Group’s revenue surged 13% y-o-y to S\$3.1 billion, with CA, DPS, and USS segments posting increases of 22%, 5%, and 15% respectively.
• Order Book: The Group secured S\$14.0 billion in new contracts for 9M2025, including S\$4.9 billion in 3Q2025 alone. The order book hit a new high of S\$32.6 billion as of September 2025, with S\$2.8 billion expected to be delivered in the remainder of the year.

Strategic Portfolio Developments

• Divestments: ST Engineering completed the divestment of its subsidiary LeeBoy and its shareholding interests in CityCab and SPTel. These generated total cash proceeds of S\$594 million and after-tax divestment gains of S\$258 million.

Shareholder Returns and Dividend Announcements

• Interim Dividend: The Board declared an interim dividend of 4.0 cents per share for 3Q2025, payable on 5 December 2025.
• Final Dividend: The Board will propose a final dividend of 6.0 cents per share for FY2025, in line with the 2025 Dividend Plan announced in March 2025.
• Special Dividend: Notably, the Board will also propose a special dividend of 5.0 cents per share, reflecting the cash proceeds generated by recent divestments. This special dividend amounts to S\$156 million, or about one-quarter of the divestment proceeds.
• If approved at the 2026 AGM, the total dividend payout for FY2025 will be 23.0 cents per share.
• Financial Strength: Despite these significant dividend payouts, the Group remains financially robust, retaining capacity to reinvest for growth or pay down debt, underpinned by strong business fundamentals and solid credit ratings.

Management Commentary

Vincent Chong, Group President & CEO, stated: “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.”

He further commented: “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.”

Corporate Profile

ST Engineering is a global technology, defence, and engineering group headquartered in Singapore. Its diversified portfolio spans aerospace, smart city solutions, defence, and public security, with operations across Asia, Europe, the Middle East, and the U.S., serving customers in over 100 countries. The Group reported revenue of over S\$11 billion in FY2024 and is listed on the Singapore Exchange, being a component stock of MSCI Singapore, FTSE Straits Times Index, and Dow Jones Best-in-Class Asia Pacific Index.

Potential Price-Sensitive Highlights for Investors

• Record Order Book: The new high of S\$32.6 billion in order backlog underpins future growth visibility and could support share price upside.
• Special Dividend: The proposed special dividend of 5.0 cents per share (on top of regular dividends) is a direct return of capital to shareholders, potentially boosting investor sentiment and share price.
• Solid Financial Position: Continued financial strength alongside generous dividends signals management confidence and could be attractive to yield-focused investors.
• Successful Divestments: The unlocking of S\$594 million in cash and S\$258 million in gains points to effective capital management and the potential for further strategic moves.

Conclusion

ST Engineering’s strong performance in 9M2025, record order book, and substantial shareholder returns—especially the proposed special dividend—represent significant, potentially price-sensitive developments. Investors should monitor the upcoming AGM for dividend approvals and track strategic portfolio shifts as the Group continues to prioritise growth and value creation.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions.