SATS reports fiscal 2Q net profit fell nearly 8 percent

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

SATS reported Tuesday its fiscal second quarter net profit fell 7.6 percent on-year to S$60.7 million on higher expenses and changes to accounting for leases.

Revenue for the quarter ended 30 September rose 9.8 percent on-year to S$497.4 million as both food solutions and gateway services posted higher contributions, the aviation caterer said in a filing to SGX.

Food solutions revenue rose 8 percent on-year to S$271 million, with growth registered in core aviation entities and the consolidation of Country Foods, formerly known as SATS BRF Food, which contributed S$13.9 million to the increase, SATS said.

“The increase in food solutions’ revenue was partially offset by absence of revenue relating to the divestment of Food and Allied Support Services Corporate in August 2019,” the filing said.

Gateway services revenue increased 12.1 percent one-year in the quarter to S$225.9 million, with S$23 million attributable to consolidating the GTR entities and on slight volume growth in passengers and flights handled, SATS said.

Group expenditure rose 11.7 percent on-year to S$432.4 million in the quarter, on the consolidation of the GTR entities and Country Foods, the filing said.

SATS declared an interim dividend of 6 Singapore cents a share, unchanged on-year.

The company was cautiously optimistic in its outlook.

“The slowdown in trade and economic growth is resulting in weaker cargo volumes in key markets. However, we continue to invest in growth opportunities such as GTR and Country Foods,” SATS said.

“Even in this difficult environment, SATS continues to generate revenue growth. We also continue to invest in enabling infrastructure for the longer term such as new kitchens, supply chain capabilities, digital control centers for ground handling and new cargo handling facilities,” it added.

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