SINGAPORE (Nov 9): Gateway solutions provider SATS has announced $72.2 million in earnings for 2QFY17-18, up 16.3% from $62.1 million in the same period a year ago on higher overseas contributions and a one-off gain.
Revenue for the quarter fell 0.8% to $434.8 million from $434.5 million previously, mainly due to a 3.1% decrease in contributions from the Food Solutions segment which was partially mitigated by a 2.3% growth in revenue from Gateway Services to $189.7 million.
Operating profit for the quarter was $61.1 million, representing a 3.9% decline from that of last year.
During the quarter under review, SATS HK (SHK) under Gateway Services had been deconsolidated, following which SHK has been accounted as an associate of the group. Excluding the impact of the deconsolidation, group underlying revenue would have increased 0.9% while Gateway Services revenue would have increased by 6.8% instead.
Group expenditure for 2Q fell 0.3% to $373.7 million from $372.5 million from last year. SATS says this was largely contributed by the deconsolidation impact of SHK, which was also the main cause for the decrease in staff costs of $4.9 million and company premise and utilities expenses of $1.3 million.
As a result of the higher contributions from both Gateway and Food Solutions’ associates/joint ventures, share of after-tax profits from associates/joint ventures for the quarter improved 56.5% to $18 million compared to $11.5 million in the previous year.
The group also recorded a one-off gain of $5.2 million from its disposal of equity interest in SHK, along with a $1.8 million gain from the completion of the restructuring of Jilin Zhong Xin Cheng Food and SG IPF as announced in June this year.
An interim dividend of 6 cents per share has been declared, to be paid out on Dec 8.
Noting a challenging operating environment and continued global economic uncertainty, SATS says its productivity initiatives have helped to offset pricing pressures resulting from lower yields in the airline sector – and that it expects its recently-announced investments in Malaysia and Turkey to make “important contributions to growth” in future.
Shares in SATS closed 4 cents lower at $4.71 on Thursday.
