Sats has returned to the black with a profit of $134.7 million for the 1HFY2025 ended Sept 30, reversing from a loss of $7.8 million in the 1HFY2024 with a growth of $142.5 million y-o-y.
Earnings per share similarly grew to 9 cents in the 1HFY2025 from a loss per share of 0.5 cents on a diluted basis in the same period a year ago.
Meanwhile, the group’s 1HFY2025 revenue increased by 14.8 % y-o-y to $2.82 billion from 1HFY2024’s $2.5 billion due to business volume growth as well as rate increases from customers.
Revenue for Sats’ gateway services increased 11.1% y-o-y to $2.16 billion on the back of an increase in air cargo volume driven by high-tech shipments, the growth of eCommerce, and the shift from ocean freight to air freight due to the Red Sea crisis.
On the other hand, revenue in the food solutions segment rose 28.6% y-o-y to $663.5 million as aviation travel continued to recover and the demand for inflight meals increased.
In-line with the increase in business volume, Sats’expenditure in the 1HFY2025 increased by 8.2% to $2.58 billion from $2.39 billion in the same period a year ago. Excluding depreciation and amortisation, expenditure in the 1HFY2025 came in at $2.31 billion, including a charge of $22.9 million for unrealised foreign exchange (forex) losses.
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The group’s operating profit also increased to $240.1 million from $72.0 million in the 1HFY2024, while the operating profit margin expanded from 2.9% to 8.5% driven by favourable operating leverage as revenue growth outpaced expenditure.
With Sats returning back to profitability, the group has declared an interim dividend of 1.5 cents per share, to be payable on Dec 6.
Meanwhile, the share of earnings of associates and joint ventures increased by 47.1% y-o-y to $65.3 million from $44.4 million in the 1HFY2024, driven by travel recovery and higher cargo volumes.
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As at Sept 30, cash and cash equivalents stood at $540.3 million.
On the group’s outlook, Sats expects the positive momentum to continue in the next quarter as the demand for travel and cargo reaches its seasonal year-end peak. The group is also committed to scaling the business to achieve sustainable revenue growth, driving operational leverage to improve cost efficiency, and investing in platform capabilities and innovation.
“We are pleased with the progress of our integration and the sustained improvements in operating results,” says Kerry Mok, president and chief executive officer (CEO) of SATS.
He concludes: “We restructured the gateway services business in the asia-pacific into Singapore hub and gateway services asia-pacific, underscoring our commitment to Singapore’s aviation ecosystem while scaling our international presence to capture growth opportunities overseas. As the leading global provider of aviation solutions, Sats will leverage its capabilities and network to deliver sustained value for shareholders.”
Shares in Sats closed 3 cents lower or 0.75% down at $3.98 on Nov 7.
