SATS, another regular winner at the Billion Dollar Club, is back again to pick up multiple accolades. Besides winning for the best in the sector for weighted return on equity, SATS has also been named overall sector winner.
Meanwhile, South Korean liner Pan Ocean Co has been recognised for leading growth in profit after tax for the transport sector. No company qualified to win in the returns to shareholders category. SATS runs two main businesses: Food and gateway services.
The company is often associated with the airport — and that is for a good reason. Its staff operates check in counters and its ground crew help make sure planes are properly loaded. Its kitchens, of course, provide the meals that will be served on board flights.
As such, when the recent Covid-19 pandemic hit, SATS earnings and share price were affected earlier this year.
However, SATS has also significant business in non-aviation related sectors. For example, as part of its so-called institutional catering, SATS’ central kitchens whip up meals served at army camps, hospitals and many other large organisations.
It also provides meals to more than 300 preschools and childcare centres. SATS’ has a catering arm as well, providing a wide range of refreshments to meetings and conventions.
Last but not least, via its so-called food-service solutions arm, SATS source for and supply an extensive list of products ranging from meat and seafood, frozen food as well as delicious ready-to-eat and ambient meals.
One of its key subsidiaries, Country Foods, for example, is the biggest meat importer, distributor and processor in Singapore with more than 1,000 clients and 800 white-label and branded products, including Farmpride and Amir’s.
On the other hand, Pan Ocean is a Seoulbased shipping company which operates both dry bulk carriers and specialised vessels. The former is used to help customers transport commodities such as steel, wood, coal, grain, raw sugar and wood pulp.
Under its specialised vessel business, its tankers carry crude oil, chemicals and other petroleum products. It has LNG and container carriers too.
The company enjoyed improved freight rates, as measured by the industry benchmark, the Baltic Dry Index (BDI). Average BDI in the first half of 2019 was 895 points, no thanks to extended uncertainty resulted from trade tension between US and China.
However, the average index for the second half of the year improved to 1,804 points, thanks to sustained demand for shipping capacity for cargo in and out of China and Asia.
For the period under evaluation, Pan Ocean’s earnings grew from US$83.7 million in FY2016 ended Dec 31 to US$126.5 million the following year, and increased yet again to US$138.5 million in FY2018 before tapering off to US$130.3 million for FY2019. This represents a CAGR of 15.9%, thereby making it the top performer in this category for this sector.
