ST Engineering’s aerospace unit remained profitable in its half-yearly financial results, though both operating and net profits saw year-on-year declines.
For the six months ended 30 June, the unit made an operating profit of S$116 million ($84.4 million), a 21% decrease year on year.
It also saw net profit fall 17.3% year on year to S$105 million.
ST Engineering attributed lower profits in part to reduced activities for the period, because of the coronavirus outbreak.
However, it says it remained in the black due to a full, six-month contribution from its newest subsidiary, former GE nacelle manufacturer Middle River Aircraft Systems, which it acquired last year. It also pointed towards government support — such as wage subsidies — that helped offset a fall in profitability.
Revenue for the period rose marginally, at about 1% year on year, to S$1.47 billion. ST Engineering states that the increase was offset by lower revenue from its aircraft maintenance and modification, as well as component and engine repair divisions. Both groups saw a drop in business activity, as a result of pandemic-induced travel restrictions and a collapse in travel demand.
For the period, ST Engineering clinched aerospace contracts worth around S$1.4 billion, in areas such as passenger-to-freighter (P2F) aircraft conversions, as well as airframe and engine maintenance.
For the second half of the year, ST Engineering says it will continue to pursue new A321P2F contracts, ramp up its component MRO business operations, as well as double down on smart solutions for its work processes. The unit is also working on cabin hygiene and safety solutions.