ST Aerospace Secures $370m Worth of New Contracts in 2Q2012

ST Aerospace has announced that it has secured about $370m worth of new contracts in the second quarter of 2012. These contracts for Aircraft Maintenance and Modification, Component Total Support, and Engine Total Support businesses will be carried out at its global maintenance, repair and overhaul network.

Between April and June, ST Aerospace redelivered 157 aircraft for airframe maintenance and modification work. For PTF conversions, it redelivered six converted freighters to various customers. Besides airframe redeliveries, ST Aerospace serviced 8,136 components and 78 engines for both commercial and military customers.

During the quarter, ST Aerospace’s affiliate VT Aerospace received approval from the United States Bankruptcy Court in the District of Delaware to acquire the Tampa aerospace maintenance facility and certain assets of Pemco World Air Services Inc. (PEMCO), including the Boeing 737 freighter conversion Supplemental Type Certificates. Subject to regulatory approvals and customary conditions precedent, the acquisition is anticipated to close in July 2012, with operations to start immediately after closing.

Additionally, VT Aerospace completed the acquisition of its 50.1 percent stake in EcoServices, LLC, becoming a partner to Pratt & Whitney in the joint venture. EcoServices won the 2012 Eco-Technology of the Year Award at Air Transport World’s inaugural Eco-Aviation Awards 2012. EcoServices’ EcoPower engine wash reduces fuel burn and CO2 emissions, and is an innovative solution for aircraft operators to reduce their environmental impact, and at the same time, improve the operational efficiency of their fleet.

In the quarter, ST Aerospace also finalized the agreement with Airbus, EADS and EADS EFW on the A330 passenger-to-freighter conversion program.

On the Component Total Support front, ST Aerospace concluded an agreement with Woodward, Inc. for the maintenance support of Woodward, Inc. components to aircraft operators of the Bell 204, 205, 206, 212, 214, 407, 412, 427 helicopters worldwide. Woodward, Inc. customers are assured of OEM aftermarket solutions marked by ST Aerospace’s high standards of quality and reliability. Additionally, ST Aerospace’s component repair and overhaul subsidiary has been approved by Gulfstream Aerospace as a supplier for component repair and overhaul services. In Europe, ST Aerospace Solutions secured a 10-year contract to provide aircraft rotables Maintenance-By-the-Hour support for a fleet of Boeing 757.

On Engines maintenance, repair and overhaul, ST Aerospace’s Xiamen engine facility received certification from the European Aviation Safety Agency, on top of their existing certifications from the US Federal Aviation Administration, Civil Aviation Administration of China and Korea MLTM. ST Aerospace’s Singapore engine facility has also obtained certification from the Japanese Civil Aviation Bureau for CFM56 engines.

On pilot training business development, ST Aerospace’s pilot training academy obtained Joint Aviation Authorities (JAA) certification, becoming one of the first few flight training organisations (FTO) in Asia Pacific that has this qualification. As an authorised JAA FTO, ST Aerospace will now be able to enrol students from countries that recognise this licence. The academy is already licensed by the Civil Aviation Authority of Singapore, Australia’s Civil Aviation Safety Authority and the Civil Aviation Administration of China for various pilot training programs. In addition, the academy was awarded a contract with Tiger Airways, to provide 30 of its cadets with pilot training, following the successful completion of the first Multi-crew Pilot licence (MPL) for the airline. These trainees will undergo training under the MPL syllabus with specific focus on the Airbus A320 aircraft before eventual employment as A320 Type Rated First Officers.

The developments above are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.


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