SATS Q2 profit up 25.4% despite higher costs
Singapore's SATS, the leading provider of gateway services and food solutions in the region, managed to boost its fiscal second-quarter bottom line by 25.4 percent to US$41.2 million as revenue growth outpaced cost increases and joint ventures continued to contribute steadily.
The year-ago net profit of $32.84 million was after deducting a $1.47 million loss relating to the divestment of Daniels Group in October last year, reported Business Times Singapore.
Revenue for the quarter ended September 30 rose nearly nine per cent to $377.97 million, while group expenditure increased eight per cent to $335.30 million – largely due to a 10 per cent rise in manpower costs.
Share of after-tax profits from overseas associates/joint ventures rose three percent to $8.52 million. Gateway services accounted for 35 per cent of quarterly revenue, while the balance came from food.
Excluding the loss of $327,600 on disposal of Country Foods Macau during the quarter as well as Daniels Group's $1.47 million loss and the one-off $3.69 million loss arising from early retirement of a sale-and-leaseback arrangement a year ago, underlying net profit from continuing operations improved 9.3 per cent to $41.52 million.
During the quarter, SATS handled 5.5 percent more flights, while the number of passengers handled rose 4.9 per cent to nearly 10 million. Gross and unit meals increased 6.1 per cent and 5.6 per cent respectively, reflecting the passenger traffic growth momentum at Singapore Changi Airport.
The rate of decline in cargo throughput abated in Q2 FY13, falling 2.6 per cent year-on-year compared to a 5.2 per cent decline in the first quarter. In addition, cargo throughput in the second quarter improved 2.7 percent on a quarter-on-quarter basis.
The second quarter results boosted SATS' profit attributable to shareholders for the April-September 2012 first half to $75.02 million, which was 10.9 per cent higher than the $67.65 million earned a year ago. First-half revenue was up about 11 per cent at $736.61 million.
The company had $264.95 million in cash on September 30, which was down $120.07 million from last year mainly due to dividends paid to shareholders.
The company said it expected to see continued growth in its food business despite prevailing uncertainties.
"Uncertainty in global air travel demand persists amid the trying global economic environment and the slowdown in Europe," it said. "Air freight demand remains weak on the back of lower consumption in advanced economies."
But it added that Changi Airport's fundamentals continued to be supported by regional traffic growth and network enhancement by some airlines: "We expect the growth momentum in our food business to continue, underpinned by the seasonal uplift in the third quarter, and continued management of raw material costs."
Revenue for the quarter ended September 30 rose nearly nine per cent to $377.97 million, while group expenditure increased eight per cent to $335.30 million – largely due to a 10 per cent rise in manpower costs.
