STE reported its 2Q15 results this morning, where revenue slipped 2.6% to S$1545.1m, again weighed down by its Shipbuilding operations in both Singapore and the US. Reported net profit slipped 6.1% to S$125.0m; but we estimated that core earnings (excluding forex and other one-off items) fell by a smaller 4.9% to S$135.3m. 1H15 revenue also fell 2.6% to S$3056.5m, meeting 46% of our full-year forecast, while reported net profit was down 5.7% at S$255.0m, meeting 47% of our FY15 forecast.

STE declared an interim dividend of S$0.05/share (ex-date: 19 Aug) versus S$0.04 the same period last year. Going forward, STE expects 2H15 revenue and PBT to be higher than 1H15 and FY15 revenue and PBT to be comparable to FY14. We will have more after the analyst briefing later. Maintain HOLD but place our S$3.33 fair value (based on 19x FY15F EPS) under review.

Source: OCBC Research - 14 Aug 2015