ST Aerospace Secures S$590m Worth of New Contracts in 3Q2012

Singapore Technologies Engineering Ltd (ST Engineering) today announced that its aerospace arm Singapore Technologies Aerospace Ltd (ST Aerospace) has secured new contracts worth about S$590m in the third quarter of 2012. This total contract value is in addition to the component repair management Maintenance-By-the-Hour (MBHTM) contract worth about US$80m (approximately S$102m) awarded by AirAsia in July this year.

The contracts are for airframe, component and engine maintenance and engineering design support, which will be carried out through its global network.

During the quarter, ST Aerospace redelivered its first VIP Boeing Business Jet, a contract secured for B level check and interior modifications. Additionally, it completed airframe maintenance and modification work for 156 aircraft.

For passenger-to-freighter conversions, it redelivered three converted Boeing 757-200 freighters to FedEx Express. Besides airframe redeliveries, ST Aerospace processed 11,861 components, 67 landing gears and 68 engines for both commercial and military customers.

On capability development, ST Aerospace incorporated a new global asset services company ST Aerospace Rotables Pte. Ltd., to drive the sector’s foray into a new growth area that focuses on leasing and trading of rotable assets as well as the loan and exchange of rotables. A complementary extension to its Component Total Support business, the new company will support its global MBHTM programmes.

Additionally, its Singapore component repair and overhaul facility added capabilities for the Airbus A320, A330, A340 and Boeing 777 platforms, to better support its customers in the region.

In the quarter, ST Aerospace’s affiliate STA San Antonio received certification from the National Civil Aviation Agency of Brazil for its airframe facility, adding to the stable of international certifications it has obtained over the past ten years.

In Guangzhou, China, it broke ground to commence hangar construction for its airframe maintenance, repair and overhaul joint venture. Expected to begin operations in the third quarter of 2013, the new facility will initially offer line and heavy maintenance services, while leveraging ST Aerospace’s network to provide on-wing engine services and EcoPower engine wash services to its customers.

On ST Aerospace’s planned joint control of Elbe Flugzeugwerke GmbH (EADS EFW) with EADS, the joint partnership has so far received merger control approvals from the Brazilian Antitrust Tribunal, the European Commission and the Turkish Competition Authority respectively. Other regulatory approvals are still outstanding.

On the pilot training front, ST Aerospace continued to upgrade its flight training capacity and capabilities to meet rising demand. Other than injecting US$1.44m into the capital of its training academy through wholly-owned subsidiary ST Aerospace Engineering Pte Ltd, to boost its footprint at the Ballarat Airport, its has also concluded a partnership agreement with Sim-Industries, where the latter will provide an Airbus A320 full flight simulator for ST Aerospace’s Multi-crew Pilot Licence programme.

The developments above 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: Oct 10, 2012