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SATS reports uptick in Q3 profit despite challenging environment

Singapore

SATS on Tuesday reported a small uptick in its fiscal third-quarter earnings to S$66.6 million, from S$65.1 million the year before.

The ground handler and in-flight catering service provider said its revenue dipped 0.2 per cent year-on-year to S$439.8 million in the three months ended Dec 31, 2017, from S$440.9 million a year ago.

SATS said revenue from its food solutions businesses fell 2.5 per cent to S$240.4 million. Revenue from gateway services, on the other hand, increased 2.6 per cent to S$199.0 million, despite the deconsolidation of SATS HK Limited, which was divested in July 2017. Excluding the impact of the deconsolidation, SATS said, the group's underlying revenue would have increased 2.4 per cent or S$10.3 million, while its gateway services' revenue would have increased 9 per cent or S$16.4 million.

SATS said its operating profit fell 1.5 per cent year-on-year to S$65.7 million.

The growth from its overseas operations, however, continues to remain strong. It said the share of after-tax profits from its associates and joint ventures increased 7.9 per cent to S$13.7 million, with higher contributions from its food solutions associates and joint ventures.

SATS' earnings per share was 5.9 Singapore cents, from 5.8 cents.

No dividend was declared for the period.

The group said its performance remains "resilient", despite a challenging operating environment.

"Changi Airport's growth in passenger and cargo traffic would present opportunities for SATS to strengthen its operations in Singapore with greater efficiency and innovative products and services," SATS' earnings announcement said.

"We will continue to broaden and deepen our presence in overseas markets to boost overseas contributions to our business and draw on scale efficiencies," it added.

SATS is present in 60 airports and 62 cities across Asia and the Middle East. Its gateway services encompass airfreight handling, passenger services, ramp handling, baggage handling, aviation security services, aircraft interior and exterior cleaning, and cruise centre management. Its food solutions businesses include airline catering, institutional and remote catering, aviation laundry, as well as food distribution and logistics.

SATS shares closed five cents lower at S$5.25 on Tuesday.