Weaker yen drags SATS' Q2 net profit down 3.2% to $48.7 million

Flight services SATS net profit fell 3.2 per cent to $48.7 million on the back of a 2 per cent dip in revenue to $452.1 million for the three months ended Sept 30.

The bulk of its revenue comes from the food solutions segment, which slid 5.9 per cent to $281 million. This was due to the lower turnover recorded by its Japan unit TFK Corporation as a result of a weaker Japanese yen.

Revenue from its other segment, gateway services, however, rose 5.1 per cent to $169.8 million.

SATS said that its operating environment remains challenging in view of uncertain glopbal economic climate and pressure on the aviation industry's profitability.

"Changi Airport's air traffic statistics continue to suggest moderate passenger traffic growth and weak demand for air freight for the full year," it stated in its second-quarter results.

Moreover, increasing manpower costs from high foreign manpower levies has also weighed on its margins.

SATS will therefore have to remain focused on productivity improvements and cost management.

Earnings per share decreased from 4.5 cents a year earlier to 4.3 cents, while net asset value per share fell 2.2 cents to $1.238 from March 31 this year.

SATS shares ended two cents lower at $3.40.