ST Engineering Profits Rise As MRO Demand Surges
SINGAPORE—Revenue for ST Engineering’s aerospace segment in 2021 grew 6% year-on-year, which the company attributed to robust freighter conversion and aircraft maintenance demand.
In the latter half of 2021, ST Engineering saw double-digit growth in its aerospace MRO, aerostructures and aviation asset management segments, signaling an apparent recovery of the air transport sector.
In the fourth quarter (Q4) alone, the commercial aerospace segment secured S$1 billion ($739.4 million) worth of new contracts, including multi-year maintenance by the hour (MBH) contracts with Virgin Australia Airlines and China Airlines, as well as orders for 21 Airbus A321P2F conversions. Total 2021 revenue for the commercial aerospace segment improved 6% to S$2.4 billion, while EBIT rocketed 125% to S$182 million.
The second half (H2) of 2021 saw rapid recovery, with revenue for aerospace MRO and aerostructure and systems up 10% and 50%, respectively. Assets under management (AUM) grew 30% to $1 billion. EBIT ballooned five-fold to S$79 million.
The commercial aerospace business contributed 32% of ST Engineering’s total revenue. The group also has major defense and infrastructure segments.
The entire ST Engineering group reported full-year 2021 revenue totaling S$7.7 billion, up 7.5% from 2020, and a net profit of S$567 million, up 7.9% from 2020.
The company started 2022 with an order by lessor CDB Aviation for a dozen A330P2Fs, announced at the Singapore Airshow. ST Engineering said its A330P2F and A321/A320P2F slots are booked through 2024 and mid-2024, respectively.
On Feb. 25, ST Engineering signed a component MBH with Vietjet Air. The MRO company, which has facilities in Hanoi and Ho Chi Minh City, will provide component pooling, repair, overhaul, modification, main base kits, component health monitoring and logistics services for the Vietnamese LCC’s entire fleet of Airbus aircraft. Aviation Week Fleet Discovery data shows Vietjet has 76 aircraft, with another 119 Airbus aircraft on order.