ST Engineering’s aerospace arm notched a 15.5% increase in its full-year operating profit – on the back of higher revenue – to S$310 million ($221 million).
Revenue for the year ended 31 December 2019 came in at S$3.45 billion, about 30% higher than the same period last year. Net profit, meanwhile, rose 9.9% to S$269 million.
ST Engineering states that the higher revenue recorded was due in part to a new income stream from its 2019 acquisition of GE’s nacelle division, Middle River Aircraft Systems (MRAS).
In 2019, ST Engineering’s aerospace unit clinched S$4.2 billion worth of new contracts, including a 10-year airframe MRO contract with a North American carrier for its fleet of Airbus A300s and Boeing 757s, as well as a 10-year agreement contract with Airbus Helicopters to support the German Armed Forces NH90 rotorcraft fleet.
Through the acquisition of MRAS, ST Engineering says it has been able to expand into the engine nacelle design and manufacturing business as well.
It states that it has completed the critical design review stage for prototype A320 passenger-to-freighter (P2F) conversion.
In 2019, the unit also opened new component MRO facilities in Vietnam, in a joint venture partnership with Vietnam Airlines’ MRO arm.
During the fourth-quarter of 2019, ST Engineering Aerospace’s profit before tax rose 15.2% to S$95.1 million, thanks to a 45% increase in revenue, which came in at S$941 million. Net profit for the quarter grew 21.2% to S$76.9 million.
In its outlook for 2020, ST Engineering states that it will continue to grow the nacelle manufacturing and aftermarket business in US. It will also look to expand its presence in Vietnam, with the setting up – and opening – of the airframe MRO joint venture with Vietnam Airlines.
As for the P2F programme, ST Engineering Aerospace will pursue new contracts, and redeliver the A321P2F prototype.