SINGAPORE (July 19): Gateway services and food solutions provider SATS saw its earnings rise 11.5% to $63.9 million for the 1Q ended June, from $57.3 million a year ago.
1Q18-19 revenue grew 3.0% to $439.4 million, from $426.5 million a year ago. Revenue from its food solutions segment rose 2.7% to $239.5 million, while revenue from its gateway services segment grew 3.4% to $199.6 million.
Excluding the deconsolidation impact from its divestment of 51% interest in SATS HK, the group says underlying group revenue would have been 5.9% higher, with gateway services’ revenue up 10%.
Group expenditure edged up marginally by 0.4% to $374.5 million in 1Q18-19, led by higher cost of raw materials, licence fees, as well as depreciation and amortisation charges.
In a filing to SGX on Thursday, SATS says its investments in technology and digitalisation are increasing productivity and enhancing its services.
As at end June, cash and cash equivalents stood at $439.7 million.
Looking ahead, SATS says it expects passenger volumes in Asia to grow, despite the threat of global trade uncertainties potentially affecting cargo volumes.
However, pricing pressures are expected to remain, even as rapid urbanisation in the region is expected to drive demand for safe, high-quality food.
More cruise ships are also expected to be deployed in Southeast Asia to keep pace with burgeoning consumer interest, the group says.
In a separate filing to SGX on Thursday, SATS says wholly-owned subsidiary SATS Investments and Turkish Airlines Inc. have “mutually agreed” to terminate a memorandum of agreement for the SATS’s provision of in-flight catering services to airlines at the Istanbul New Airport.
See: SATS to provide catering services to Turkish Airlines at Istanbul airport
Shares of SATS closed 3 cents higher at $5.10 on Thursday.
