SATS reports fiscal 1Q net profit dropped 14 percent amid trade war pressures

SATS Gateway Services bus at Changi AirportSATS Gateway Services bus at Changi Airport

SATS’s fiscal first-quarter net profit dropped 14.4 percent on-year to S$54.7 million amid the Jet Airways suspension, lower foreign-exchange gains and lower cargo volumes amid trade uncertainty, the aviation catering company said Thursday.

In April, Jet Airways suspended all international flights as the carrier scrambled for funding.

Revenue for the quarter ended 30 June rose 5.8 percent on-year to S$465.1 million, SATS said in a filing to SGX.

The revenue increase was thanks to the consolidation of GTR and growth in aviation catering subsidiaries in Japan and Singapore as more flights handled increased aviation meal volumes, SATS said.

Revenue from food solutions increased 0.8 percent on-year to S$241.4 million in the quarter as the core aviation catering subsidiaries improved their performance, SATS said. Gateway Services revenue rose by 11.9 percent on-year to S$223.3 million, largely on contributions from consolidating GTR entities, the filing said.

The gross number of meals produced, including both in-flight and institutional catering, rose 2.3 percent on-year to 19.25 million in the quarter, while the number of flights handled jumped 123.6 percent to 91.46 million, SATS said. But the cargo and mail processed dropped 1.6 percent on-year to 452,160 tonnes, the filing said.

Expenses increased by 9 percent on-year to S$408.3 million in the quarter, largely on consolidating the GTR entities as well as on higher staff costs, SATS said.

SATS issued a cautious outlook.

“Aviation passenger volumes in Asia continue to grow although more slowly, while rapid urbanisation in the region is still driving demand for safe, high-quality food,” SATS said. “We anticipate that the cruise industry in Southeast Asia will develop to keep pace with burgeoning consumer interest.”

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