ST Engineering plans to allocate one-third of its year-on-year net profit growth as incremental dividends under a new dividend policy, effective for the fiscal year ending December 2026 and beyond.

On Tuesday (March 18), ST Engineering stated that dividends will be paid quarterly, with the new policy to be implemented after the company achieves a progressive increase in full-year net profit, "barring unforeseen circumstances."

As of 9:43 a.m. on Tuesday, ST Engineering's shares rose 2.7% to S$6.49, an increase of S$0.17, with a trading volume nearing 3 million shares.

The group said the move aims to enhance revenue, operating cash flow, and net profit to boost total shareholder returns. It also emphasized its intention to reinvest for growth while rewarding shareholders with dividends.

Given its current "strong" retained earnings and "robust five-year outlook," the company also plans to propose a higher total dividend of S$0.18 per share for the 2025 fiscal year.

The increased total dividend will include an interim dividend of S$0.04 per share for the first three quarters and a final dividend of S$0.06 per share, subject to shareholder approval at the annual general meeting scheduled for April 2026.

This figure is higher than the proposed total dividend of S$0.17 per share for the fiscal year ending December 2024, which includes a final dividend of S$0.05 per share, subject to shareholder approval at the annual general meeting on April 24.

The company will announce the record and payment dates for the 2025 fiscal year dividends when the board declares the interim dividends for the first three quarters of the fiscal year.

The final dividend is expected to be paid in May 2026. The group stated that the record and payment dates for the final dividend will be announced when the full-year results for the 2025 fiscal year are released.

Strong Earnings Growth and Order Outlook for 2024

In its latest earnings report released on February 27, ST Engineering's full-year net profit rose 19.7% to S$702.3 million, up from S$586.5 million in the previous year.

The company's revenue increased by 11.6% to S$11.3 billion, a record high, from S$10.1 billion; earnings per share grew 19.7% to S$0.2253, up from S$0.1882 in the previous year.

Vincent Chong, Group President and CEO of ST Engineering, noted that despite "an environment of uncertainty and challenges," the company delivered a strong performance in 2024.

He added that the company's "strong order book and competitive market position" will support its continued revenue growth and performance.

As of the end of 2024, ST Engineering's order book stood at S$28.5 billion. The company expects its order book for 2025 to reach approximately S$8.8 billion.

ST Engineering's shares closed up 1.8% on Monday at S$6.32, a gain of S$0.11.