Sats H2 profits surge more than nine-fold to $64.1m on aviation recovery, WFS acquisition

SINGAPORE - In-flight caterer and ground handler Sats reported earnings of $64.1 million for the six months ended March 31, a more than nine-fold jump from the $6 million booked in the previous corresponding period.

This comes amid a robust post-pandemic recovery by the aviation sector, and the

acquisition of global air-cargo handling company World Flight Services (WFS),

which Sats acquired in April 2023 for $1.8 billion, the mainboard-listed company said in a regulatory filing on the evening of May 29.

Revenue for the period more than doubled to $2.7 billion, from $953.8 million the year before, driven primarily by the consolidation of WFS, which has given the group increased market share and generated network synergies.

Earnings per share stood at 4.3 Singapore cents for the half year, up from 0.5 cent in the previous year.

A final dividend of 1.5 Singapore cents per share was declared for the full year, compared with the preceding year, when no dividend was declared. Once approved by shareholders at the July 19 annual general meeting, the dividend will be paid out on Aug 8, after the books are closed on July 26.

For the full year ended March 31, Sats swung back to into the black with a net profit of $56.4 million, a turnaround from its net loss of $26.5 million in the year-ago period.

The group’s full-year revenue more than tripled to $5.1 billion, from $1.8 billion in the preceding year.

Being a global player, Sats aims to seize growth opportunities in the global aviation sector to create value for its stakeholders, said president and chief executive Kerry Mok.

“Achieving a strong performance in our home market will enable us to replicate the group’s core competencies in key markets around the world, thereby building business resilience and financial sustainability,” he added.

With global air-passenger traffic set to recover fully to 2019 levels by the end of 2024, and cargo traffic projected to grow by 4.5 per cent this year, Sats will benefit from these trends, boosted by a robust e-commerce sector; demand is also growing for specialised services, the provision of which generates better yields from air cargo services.

The company’s financial focus remains on reducing debt and optimising its cash position to strengthen its balance sheet, reinvesting for sustainable growth, and returning value to shareholders, it said in the bourse filing.

Shares of Sats closed $0.01 or 0.4 per cent lower at $2.63 before the announcement.

THE BUSINESS TIMES