ST Engineering Results Reflect Slower Asia Recovery
ST Engineering’s commercial aerospace revenue climbed 21% in 2022 as the Singapore-based company benefited from air travel recovery.
However, the gains were not as large as those seen at MRO providers in certain other parts of the world due to the slower easing of Covid restrictions in many parts of Asia-Pacific.
Air France Industries KLM Engineering & Maintenance (AFI KLM E&M), for instance, almost doubled its operating profit in 2022 as external sales climbed 36%.
ST Engineering’s commercial aerospace revenue reached S$2.99 billion ($2.14 billion) from S$2.46 billion a year earlier, while its pre-tax profit grew 65% year on year to S$301 million.
“Our commercial aerospace segment has benefited from the recovery in aviation and will see further improvement, especially in the Asia Pacific region and with the re-opening of China,” said Vincent Chong, group president and CEO.
In the final three months of 2022, ST Engineering won S$680 million of new commercial aerospace business for its manufacturing and MRO services.
This included passenger-to-freighter conversion orders for A330P2F and A321P2F units; CFM56-7B engine heavy maintenance contracts from established airlines based in Asia; and a multi-year component contract to support an Asian airline’s A320 fleet.
It will hope to win further contracts from a recently announced MRO joint venture in China.
ST Engineering is partnering with SF Airlines, China’s largest cargo carrier, to set up a commercial airframe MRO venture in Hubei, China.
The joint venture, subject to regulatory approvals, will operate a greenfield airframe MRO facility at Ezhou Huahu airport, which is Hubei’s international logistics hub.
ST Engineering will have a majority 60% stake in the joint venture, with the remaining 40% to be held by SF Airlines. The joint venture company’s first facility is expected to be ready in 2025.