[SINGAPORE] ST Engineering plans to pay out a third of its year-on-year increase in net profit as incremental dividends under a new dividend policy that will take effect in the financial year ending December 2026 and onwards.
The dividends will be paid on a quarterly basis and the new policy will be rolled out as the company achieves progressively higher full-year net profit, “barring unforeseen circumstances”, ST Engineering said on Tuesday (Mar 18).
Shares of ST Engineering rose 2.7 per cent or S$0.17 to S$6.49 as at 9.43 am on Tuesday, after close to 3 million shares changed hands.
The group said that this comes as it is targeting growth in its revenue, operating cash flow and net profit, with the objective of improving total shareholders’ return. It added that it intends to re-invest for growth while rewarding shareholders with dividends.
The group is also aiming for revenue of S$17 billion and a net profit improvement that outpaces its top line increases by up to five percentage points annually by 2029, said group chief executive officer Vincent Chong.
Specifically, the engineering group expects to reap S$6 billion in revenue from its commercial aerospace operations, over S$7.5 billion from defence and public security, and S$4.5 billion from smart city, added Chong at the investor day.
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It also plans to propose a higher total dividend of S$0.18 per share for FY2025, given its current “robust” retained earnings and a “strong five-year outlook”.
The increased total dividend will comprise interim dividends of S$0.04 per share for each of the first three quarters in addition to a final dividend of S$0.06 per share, which will be subject to shareholder approval at its annual general meeting scheduled to be held in April 2026.
This is up from the proposed total dividend of S$0.17 per share for the financial year ended December 2024, which includes a final dividend of S$0.05 per share that is subject to shareholder approval at its upcoming annual general meeting to be held on Apr 24.
The company will announce the record and payment date for FY2025’s dividend plan as and when the board declares an interim dividend for the first three quarters of the financial year.
The final dividend is scheduled for payment in May 2026. The record date and payment date for this final dividend will be announced in conjunction with the release of the group’s full-year results for FY2025, it said.
Robust orderbook outlook following FY2024 earnings growth
In its latest earnings results, released on Feb 27, ST Engineering’s full-year net profit grew 19.7 per cent to S$702.3 million, from S$586.5 million in the year-ago period.
Its revenue rose 11.6 per cent to S$11.3 billion from S$10.1 billion, the highest recorded, as its earnings per share climbed 19.7 per cent to S$0.2253 from S$0.1882 in the previous corresponding period.
Chong said that its strong performance for 2024 came despite “an uncertain and challenging environment”.
He added that the company’s “robust order book and a competitive market position” will underpin its continued revenue growth and performance.
ST Engineering’s order book was at S$28.5 billion as at end-2024. It expects to deliver about S$8.8 billion from its order book in 2025.
