Cost savings and productivity efforts paid off for ground handling firm Sats in the third quarter with a boost in earnings.
Net profit rose 12.8 per cent to $60.6 million in the three months to Dec 31 last year, although revenue slid 2.2 per cent to $441 million over the same period a year earlier.
Part of the fall in turnover stemmed from a 7.1 per cent decline in contributions from its food solutions segment to $251 million following the transfer of the food distribution business to the joint venture company Sats BRF Food in June. The weakening of the Japanese yen took its toll as well, said the firm yesterday.
Net profit for the nine months grew 17.9 per cent to $169.9 million, while revenue dropped 3.6 per cent to $1.28 billion.
During the quarter, group expenditure shrank 5.1 per cent to $379.2 million, thanks to reductions in most expense categories except for staff costs, depreciation and amortisation charges. Operating profit, as a result, improved 20.9 per cent to $61.8 million.
AT A GLANCE
$60.6 million (+12.8%)
$441 million (-2.2%)
Earnings per share came in at 5.5 cents, up on the 4.8 cents previously, while net asset value per share stood at 131.8 cents as at Dec 31, higher than the 130.4 cents as at March 31 last year.
The debt-to-equity ratio remained healthy at 0.07 times.
President and chief executive Alex Hungate told a tele-briefing yesterday that the economic uncertainty was reducing consumer confidence across Asia, and that he expected the challenging operating environment to continue.
But he also said Sats had managed to perform "pretty well" despite the headwinds, especially with its focus on raising productivity by adopting new technologies and driving economies of scale, which it will continue.
"The long-term prospects... are still good," added Mr Hungate, citing the growing demand for high-quality food, travel and air freight services. "We believe we are well-positioned and we will continued to expand our geographical presence."
The group recently acquired a 49 per cent stake in an airline catering company in Malaysia and embarked on joint ventures in the travel retail business in Singapore and food supply business in China.
Sats shares closed eight cents or 2 per cent lower at $3.84 yesterday, before the results were released.