Sats posted a 2.8% rise in second-quarter net profit to S$81.1 million, up from S$78.9 million a year earlier, as higher cargo and meal volumes lifted revenue 9% to S$1.71 billion. Operating profit fell 7.6% to S$145.4 million on Middle East conflict-related input costs set against a high base. Cargo volumes processed rose 8% to 2.6 million tonnes, led by a 19.4% increase in the Americas. The board declared an interim dividend of 2 Singapore cents, unchanged from the year before, payable Dec 10.
According to businesstimes.com.sg, Sats reported a 2.8% increase in net profit to S$81.1 million for its second quarter ended Sep 30, up from S$78.9 million a year earlier, as higher cargo and meal volumes offset cost pressures linked to the Middle East conflict.
Cargo and meal volumes drive revenue growth
The mainboard-listed air cargo handler and airline caterer said revenue for the quarter rose 9% to S$1.71 billion, from S$1.57 billion in the prior-year period. Earnings per share stood at 5.4 Singapore cents, up from 5.3 Singapore cents.
Operating profit fell 7.6% year on year to S$145.4 million, as higher input costs from the Middle East conflict were set against a high base. The prior-year period benefited from tariff-related front-loading and a temporary efficiency gain on higher volumes, the group said in its regulatory filing on Wednesday.
The share of earnings from associates and joint ventures fell 6.4% to S$25.8 million on lower business volumes. Compared with the first quarter, operating profit rose 8.7%, with margin improving to 8.5% from 8% on focused cost management.
Gateway services lift cargo revenue by 10.9%
Gateway services revenue rose 10% to S$1.3 billion, with cargo revenue up 10.9% to S$900.4 million and ground handling revenue up 8% to S$436.2 million.
Food solutions revenue rose 5.6% to S$376.5 million on stronger aviation and non-aviation meal demand.
Cargo volumes processed rose 8% to 2.6 million tonnes, led by a 19.4% increase in the Americas. Sats said its cargo volumes have outpaced industry growth for the 12th consecutive quarter.
First-half profit rises 4.3%
For the half year, net profit rose 4.3% to S$156.2 million, from S$149.8 million. Basic earnings per share was 10.5 Singapore cents, up from 10.1 Singapore cents.
Revenue for the half year rose 10.1% to S$3.39 billion, from S$3.08 billion. Operating profit fell 1.2% to S$279.2 million, with margin at 8.2% against 9.2%.
The share of earnings from associates and joint ventures fell 13.2% to S$52.6 million on lower business volumes and non-recurring provisions in the first quarter.
Revenue from the gateway services segment rose 11.4% to S$2.67 billion, from S$2.39 billion. Its operating profit fell 1.5% to S$230.5 million, from S$234.1 million.
Revenue from the food solutions segment rose 5.5% to S$722.5 million, from S$684.8 million, while its operating profit rose 12.3% to S$74.9 million, from S$66.7 million.
Dividend held at 2 Singapore cents
The board declared an interim dividend of 2 Singapore cents per share for the first half, unchanged from the year before. It will be paid on Dec 10, with books closing on Nov 20.
Outlook hinges on Middle East conflict and trade conditions
Sats expects demand across its network to remain resilient, with volumes supported by new customer wins and network expansion. The pace will depend on how the Middle East conflict and trade conditions evolve.
The group said operating costs remain under pressure industry-wide from higher energy prices, but it views these as transient rather than structural. In the food solutions segment, input costs are likely to stay elevated in the near term, though the margin impact should moderate as contractual repricing cycles take effect.
“We are confident of navigating near-term headwinds, with a focus on disciplined cost management and prudent investment.” — Kerry Mok, President and Chief Executive
Shares of Sats closed S$0.10 or 2.6% higher at S$4 on Wednesday before the announcement.
Source: businesstimes.com.sg
Compiled from international media by the SCI.AI editorial team.
