Land Systems - Singapore Technologies Engineering

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operating financial review In October, ST Kinetics and Singapore Polytechnic signed an MOU for collaboration on a new Solar Energy Test-bedding Application Centre (SETAC) to facilitate research and development in solar applications, and the production of Dye Sensitised Solar Cell (DSSC). DSSCs are new generation solar cells that are more efficient and up to 60% cheaper than those currently available. ST Kinetics expects greater demand for its Total 40mm Solutions. It will also continue to pursue opportunities in local and foreign defence markets for its range of products, as well as new development and upgrade programmes. Increasing global environmental awareness and pressures to reduce fuel consumption are also expected The ST Kinetics-NTU Cold Spray Research Centre opened in September is Southeast Asia’s first R&D centre for such technology. to give rise to a higher demand for electric and hybrid electric vehicles and more efficient hydromechanical transmissions, all of which ST Kinetics offers as subsystems or integrated end products to its customers. Singapore Technologies Engineering Ltd ENGAGING IDEAS DELIVERING PROMISES Annual Report 2008 71
Total Support & Services Singapore Airport Terminal Services Limited (SATS), the leading provider of integrated ground handling and airline catering services at Singapore Changi Airport, became the first customer to use the Hybrid Electric Tow Tractor HETT20 in January. In June, ST Kinetics launched “STAR BLACK” – an independent premium service centre that delivers personalised, comprehensive automotive services for high-end German cars from marques like BMW and Mercedes Benz. This complements the current one-stop automotive services of STAR Automotive Centre. These EXPORT contracts attest to the growing confidence and global recognition of ST Kinetics’ defence products. ST Kinetics expects more opportunities to provide services such as integrated training, logistics and life cycle cost management. The global economic downturn would also reduce new acquisitions and lead to increased demand for MRO services and life extension programmes for existing components and equipment. Specialty Vehicles & Services In March, ST Kinetics generated strong interest for three new LeeBoy products and GJK’s mini excavator at CONEXPO 2008 held in Las Vegas. VT LeeBoy launched its new 9000 wheeled Asphalt Paver, 705 Motor Grader and the upgraded Maximizer III Distributor. Later in May, the company set up VT Specialized Vehicles, S.A. de C.V. (VT SVM) – a wholly-owned subsidiary in Mexico – to sell VT SVC’s specialty vehicles in Mexico and Latin America. Sales of VT SVC kits in Latin America have enjoyed steady growth over the last few years, and the company’s presence in Mexico will enhance customer service and facilitate expansion in the Latin American market. At Bauma China 2008, held in Shanghai in November, both GJK and BZK showcased their range of products for the construction and mining industries. Also exhibited at the show were a new high mobility telehandler called Chang Jing 6, a hydraulic excavator, articulated dump truck ADT-30, CAV, and hybrid electric vehicle components and solutions. Besides growing organic sales, ST Kinetics’ specialty vehicles companies have placed greater emphasis on the development of higher margin products, and export sales. It has expanded its market reach through establishing new dealers in Australia, Indonesia, India, Malaysia, the Philippines, South Africa, the UAE and Vietnam. These initiatives will not only help the specialty vehicles companies to weather the challenging periods of downturn, but also to emerge stronger on the upswing. PERFORMANCE OF THE LAND SYSTEMS SECTOR Half Yearly Performance Turnover of the Land Systems sector in 2H2008 of $618m was 6% or $38m lower than that achieved in 1H2008. The lower turnover was mainly due to lower turnover from the US operations and lower project deliveries. Compared to 1H2008, PBT in 2H2008 decreased by 54% or from $31.3m to $26.7m. The lower PBT was mainly attributable to lower turnover and lower margins from product mix, as well as the impairment in value of a quoted investment. 72
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