Shares in ST Engineering changed hands at $6.45 prior to the midday break on March 18, up 13 cents or 2.06% for the day. Its shares reached an intra-day high of $6.56 in the morning.
This comes after the Mainboard-listed defence and technology company announced its higher dividend policy earlier this morning.
ST Engineering shares leapt 12 cents, some 1.9%, to $6.44 at the start of trading on March 18.
According to a pre-market bourse filing on March 18, the company plans to pay four cents per share for the first three quarters in FY2025 and a final dividend of 6 cents — contributing to a total of 18 cents. The company has been paying four cents per quarter in recent years.
ST Engineering announced its earnings for FY2024 ended Dec 31, 2024 on Feb 27, with earnings up 19.7% y-o-y and a full-year dividend of 17 cents, up from 16 cents the year prior.
The FY2024 dividend is subject to shareholder approval at ST Engineering’s April 24 annual general meeting (AGM).
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The revised dividend policy, which involves FY2025 payouts, is subject to shareholder approval at the 2026 AGM, scheduled to be held in April 2026.
Looking ahead, ST Engineering aims to achieve progressively higher full-year earnings and it will pay out about one-third of its y-o-y increase in net profit as incremental dividends from FY2026.
ST Engineering’s five-year target from 2025 to 2029 includes growing group revenue by 2.5 times of the global GDP growth rate to $17 billion, and for group net profit CAGR to exceed group revenue CAGR by up to 5 percentage points.
See also: ST Engineering aims to raise FY2025 dividend payout to 18 cents per share
ST Engineering references the International Monetary Fund’s (IMF) forecast for 3.15% average global GDP growth over next five years. These targets will use ST Engineering's FY2024 figures as a baseline; the company posted $11.3 billion revenue last year.
Speaking at ST Engineering’s investor day on March 18, group president and CEO Vincent Chong says the company aims to raise dividends “in tandem with profit”.
These five-year targets, however, exclude the impact of mergers and acquisitions (M&A) and divestments. “We are stating our target on a constant portfolio basis,” says Chong.
“We are confident in further growth in revenue, operating cash flow and net profit with an objective to improve total shareholders’ return. We intend to re-invest for growth while rewarding shareholders with dividends,” says group CFO Cedric Foo.
Shares in ST Engineering have surged some 38% year to date, on the back of a global focus on defence stocks and rearmament in Europe.
Chart: ST Engineering
