Aviation services provider SATS reported Friday its fiscal fourth quarter net profit fell 23.7 percent on-year to S$49.9 million, amid higher expenses and the absence of year-ago one-off gains.
Revenue for the quarter ended 31 March rose 11.3 percent on-year to S$471.5 million on contributions from food solutions and gateway services, SATS said in a filing to SGX before the market open.
Food solutions revenue increased by 7.5 percent on-year to S$245.4 million in the quarter on growth from all core catering subsidiaries, SATS said.
Gateway services revenue grew 15.7 percent on-year to S$225.3 million on higher contributions from cruise terminal operations and consolidation of the GTR Entities — Ground Team Red Holdings (GTRH) and Ground Team Red (GTR) — starting in January, SATS said.
Underlying net profit fell 5.4 percent on-year to S$48.7 million, SATS said.
UOB KayHian had forecast net profit of S$61.9 million, underlying net profit of S$61.9 million and revenue of S$443.9 million.
“Our investments in regional expansion and new capabilities are bearing fruit. Revenue growth accelerated throughout this year,” Alex Hungate, president and CEO of SATS, said in the statement.
“Net profit declined due to the absence of one-off gains from our overseas operations, but operating profit continued to improve year on year, both for the quarter and the full year,” he added.
Operating profit for the fiscal fourth quarter rose 10.2 percent on-year to S$50.8 million, SATS said.
The share of results from associates and joint ventures dropped 62.9 percent on-year to S$8.9 million in the quarter, with lower contributions from gateway services’ and food solutions’ associates and joint ventures, SATS said, noting there was a S$1.2 million write-back of a tax provision on the disposal of DFASS SATS to KrisShop.
Expenses for the quarter increased by 11.5 percent on-year to S$420.7 million, on volume and revenue growth and the consolidation of GTR entities, which boosted staff costs, SATS said.
For the full fiscal year, SATS reported net profit fell 5.0 percent on-year to S$248.4 million, while revenue increased 6.0 percent on-year to S$1.83 billion.
UOB KayHian had forecast full-year net profit of S$260.4 million.
SATS proposed a final dividend of 13 Singapore cents a share, up 1 Singapore cent on-year, bringing the full-year total to 19 Singapore cents.
In its outlook, SATS was optimistic on passenger traffic growth.
“The world economy faces challenges, but demand for aviation services and high quality food in Asia-Pacific continues to grow,” SATS said, pointing to IATA forecasts for 5 percent passenger growth over 2017 to 2023.
“SATS has been expanding its network of operations across Asia-Pacific and investing in new capabilities to benefit from this growth,” the filing said.
“To strengthen our position as Asia-Pacific’s leading gateway services and food solutions provider, we are investing in business sustainability initiatives such as solar panels, electric vehicles and new food technologies that will help us to reduce our carbon footprint, manage waste and scale our business efficiently,” it added.
While you’re here, we’re hoping you can help us out.
Shenton Wire has been providing you with quick news and market analysis. But we need your support to continue to bring you the news you’ve come to expect and to expand our reach beyond Singapore.
Your monthly contribution will directly fund our journalism.
You can check your existing account here. You can also contact us about other contribution levels or for corporate subscriptions and syndication queries.