SINGAPORE (July 18): Food solutions and gateway services provider SATS posted a 14.4% drop in earnings to $54.7 million for the 1Q19-20 ended June, falling from $63.9 million a year ago.
Earnings per share (EPS) fell 14.0% to 4.9 cents for 1Q19-20, from 5.7 cents in 1Q18-19.
The decline was largely due to higher group expenditure, which rose 9% to $408.3 million, mainly due to the consolidation of GTR entities, Ground Team Red Holdings and Ground Team Red, which took effect from January 2019.
1Q19-20 profit was also impacted by the Jet Airways suspension, lower foreign exchange gains, and lower cargo volumes amid global trade uncertainties.
1Q19-20 revenue rose 5.8% to $465.1 million, from $439.4 million a year ago, on the back of growth in both its Food Solutions and Gateway Services segments.
The increase was led by an 11.9% rise in Gateway Services’ revenue to $223.3 million, largely attributable to the consolidation of GTR entities.
Revenue from Food Solutions edged up marginally by 0.8% to $241.4 million, with growth registered in core aviation catering subsidiaries.
The growth in 1Q19-20 was partially offset by the decrease in cargo revenue as a result of lower cargo volume.
As at end June, cash and cash equivalents stood at $401.7 million.
Amid signs of weakness in the global economy, SATS says it aims to strengthen its market leadership by continuing to extend its network across Asia Pacific and digitalising its operations to enhance service and improve productivity.
Shares in SATS closed 1.5% lower, or down 8 cents, at $5.32 on Thursday, before the results announcement.
