Land Systems - Singapore Technologies Engineering

operating financial review
Full Year Performance
Land Systems sector’s FY2008 turnover of $1,274m
was higher than that achieved in FY2007 by 8% or
$96m. The higher turnover was mainly contributed
by the Munitions & Weapon (M&W) business group’s
higher export sales, but this was partially offset by
lower turnover from the Automotive (Auto) business
group. The lower turnover in the Auto business
group was mainly due to lower sales from the US
operations, but this was partially offset by higher
project deliveries.
Compared to FY2007, Land Systems sector’s PBT
of $84.7m for FY2008 was higher by 6% or $4.7m.
The higher PBT was mainly contributed by the M&W
business group, but this was largely offset by lower
PBT in the Auto business group. The higher PBT
of the M&W business group was in line with the
higher turnover recorded, while the poorer results
of the Auto business group was mainly due to the
impairment in value of a quoted investment, lower
interest income, weakness in US operations and
lower margins from product mix.
Acquisitions
On 10 September, ST Kinetics acquired the remaining
13.76% stake in STAR Automotive Centre (Zhejiang) Co
Ltd (STAR (ZJ)), making it a wholly-owned subsidiary.
The acquisition was in line with ST Kinetics’ growth
plan in China’s expanding automotive repair market.
STAR (ZJ) has seen growing demand for quality aftersales
services in the provinces of Jiangsu and Zhejiang,
where it is the only workshop that provides quality
one-stop services for owners of premium cars such as
Mercedes Benz, BMW and Porsche. Using state-of-theart
equipment, STAR (ZJ) has one of the largest facilities
in the city, and is recognised by insurance companies in
the Jiangsu and Zhejiang provinces.
Major Projects
In August, ST Kinetics announced the $110m
redevelopment of its facilities at Jalan Boon Lay and
Chin Bee Road, where it will consolidate its facilities
and operations located at its Portsdown Road and Ayer
Rajah Crescent premises.
Visitors watching a demonstration of the 120mm SRAMS at Eurosatory 2008.
An export contract for the mortar system was announced in February.
During the year, ST Kinetics delivered the Bionix II,
Bronco, Pegasus, and other weapons and munitions.
It also saw the sales of specialised truck bodies,
trailers, off-road dump trucks, excavators, and road
construction and maintenance equipment to various
commercial customers.
In February, ST Kinetics was awarded a US$31.6m
contract for 120mm SRAMS by a Gulf States
customer. Under the export contract, ST Kinetics
will supply its unsurpassed low-recoil SRAMS, with
delivery to be completed by 2011. In the same month,
the company was awarded a contract worth about
$42.5m by the UK MoD for the supply of 40mm
ammunition.
2008 ended on a high note for ST Kinetics with the
announcements of two contracts from UK MoD -
a £150m order for over 100 Bronco All Terrain
Tracked Carriers and a £35m order for 40mm
ammunition. The Bronco order was a significant
export milestone as it is the first sale of a locally
designed and produced armoured vehicle and to
one of the world’s leading defence forces. UK MoD’s
repeat order for more 40mm ammunition was also
notable as it demonstrated the customer’s trust in
the product’s quality and performance. These export
contracts attest to the growing confidence and global
recognition of ST Kinetics’ defence products.
Singapore Technologies Engineering Ltd ENGAGING IDEAS DELIVERING PROMISES Annual Report 2008
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