ST Engineering's Aerospace Arm Clinches $350M Worth of Contracts in 4Q2011

ST Engineering's aerospace arm announced it has sealed new contracts valued at about $350m in the fourth quarter of 2011.  These contracts will be carried out at its network of facilities and affiliates in the Americas, Asia Pacific and Europe.

The Aircraft Maintenance & Modification business group secured new airframe contracts involving base maintenance, heavy maintenance, passenger-to-freighter (PTF) conversion and interior refurbishment on various commercial and military aircraft platforms.

The Component Total Support business group secured new component contracts, including Maintenance-By-the-Hour (MBHTM), repair management, avionics and mechanical component maintenance, aerostructures and thrust reverser repair, and landing gear repair and overhaul.

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The Engine Total Support business group clinched new engine maintenance contracts, which includes on-wing maintenance, off-wing maintenance, technical management and asset management on various engines types, including CFM56, Pratt & Whitney JT8D, F100, F110, Rolls-Royce Allison T56, General Electric J85, F404, Honeywell T53 and Turbomeca Makila.  Besides engine maintenance, its leasing joint venture was awarded a contract from Lion Air for the lease of three CFM56-7B engines over 10 years.  This contract is in addition to the total contracts' value for the fourth quarter of 2011.

At quarter end, ST Aerospace redelivered 101 aircraft for airframe related maintenance and modification work.  For PTF conversions, it redelivered five Boeing 757-200 converted freighters to FedEx Express.  Besides airframe redeliveries, ST Aerospace serviced 72 engines and 13,382 components for both commercial and military customers.

On engine capability development, ST Aerospace's engine maintenance, repair and overhaul (MRO) facility in Xiamen commenced operations, providing MRO and total support for the CFM56-7B and CFM56-5B series of engines.  Additionally, its affiliate Vision Technologies Aerospace Incorporated has entered into an agreement with Pratt & Whitney to invest in a 50.1% stake in EcoServices, LLC to enhance the Group's focus on green aftermarket solutions.  Subject to regulatory approvals and customary conditions precedent, this transaction is anticipated to close around March 2012.

Also during fourth quarter, ST Aerospace was certified as a Part 147 Maintenance Training Organisation by the Civil Aviation Authority of Singapore and European Aviation Safety Agency, to provide aircraft type training for narrow-body and wide-body aircraft.

The contracts are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

Source: Singapore Technologies Engineering Ltd (SGX: ST Engg)
Date: Jan 27, 2012