The Commercial Aerospace business of ST Engineering saw sharply higher revenue in 2023 on the back of freighter conversion and MRO activity.

Full-year revenue at the unit rose 31% to S$3.9 billion ($2.9 billion), while EBIT jumped 47% to S$337 million, according to ST Engineering’s full-year financial results.

A LEAP-1B engine at ST Engineering's engine MRO facility in Singapore

Source: ST Engineering

A LEAP-1B engine at ST Engineering’s engine MRO facility in Singapore. LEAP engine work helped the company’s performance in 2023

The company attributes the unit’s strong EBIT growth to business growth and cost cutting. The 47% gain, however, also reflects the absence of a S$72 million pension restructuring gain recorded in 2023.

For aerospace MRO, ST Engineering says its performance is in line with the market’s recovery. It also says that expanded capabilities, specifically its work on the CFM International LEAP-1A/1B engine, helped its bottom line.

Aerospace MRO was especially strong, with revenue jumping 41% to S$1.96 billion.

The unit’s other two segments - Aerostructures & Systems and Aviation Asset Management – also saw revenues improve in 2023.

The aerostructures business benefited from nacelle growth in line with deliveries of Airbus A320neos, and the company’s passenger to freighter business is “maturing.”

In regard to orders, the fourth quarter of 2023 saw Commercial Aerospace secure S$1 billion in orders, including CFM56-7B work for a Chinese carrier, airframe heavy maintenance for a US airline, and landing gear overhaul work for an airline in Oceania.

ST Engineering also has a defence aerospace business that is grouped under its Defence & Public Security business. In 2023 defence aerospace earned revenues of S$471 million, flat from a year earlier.

Overall, Commercial Aerospace accounted for 39% of ST Engineering’s S$10.1 billion revenue in 2023.

The company’s other divisions are Defence & Public Security and Urban Solutions and Satcom.