SATS S58 has reported earnings or patmi of $0.5 million for the 3QFY2023 ended Dec 31, 2022, 90.2% lower than earnings of $5.1 million in the same quarter the year before.
However, the positive patmi comes after the losses in the first two quarters of the year, reflecting an improvement in business conditions and the seasonal high, says SATS. During the 1QFY2023, SATS reported a loss of $22.5 million due to higher costs and lower government subsidies. SATS also reported a loss of $9.9 million in the 2QFY2023.
Excluding government reliefs, group patmi would have been a loss of $13.7 million compared to the loss of $33.0 million recorded for the same period the year before.
Revenue for the 3QFY2023 rose by 54.5% y-o-y to $475.7 million as business activities increased on the back of a recovery in the aviation industry. Revenue from Food Solutions increased by 39.9% y-o-y to $232.9 million while revenue from Gateway Services increased by 73.0% y-o-y to $242.7 million. The consolidation of Asia Airfreight Terminal Co. Ltd (AAT), which became a subsidiary of the group in March 2022 contributed $30.5 million to its Gateway Services revenue.
Expenditure increased by 50.3% y-o-y to $476.8 million on the back of higher business activities and inflation.
As a result, the group reported an operating loss of $1.1 million, up 88.4% y-o-y from the previous year’s operating loss of $9.5 million and 86.3% higher than the $8.0 million in operating loss in the previous quarter.
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Share of earnings of associates/joint ventures, net of tax fell by 15.7% y-o-y to $10.2 million.
Other non-operating loss of $11.3 million mainly comprised the one-off acquisition expenses incurred by the group.
In the 9MFY2023, patmi stood at a loss of $32.0 million, down from 9MFY2022’s patmi of $18.3 million. Excluding government reliefs, group patmi would have been a loss of $65.4 million for the period, an improvement of $33.2 million compared to a loss of $98.6 million in the 9MFY2022.
As at Dec 31, 2022, the group’s total equity fell to $1.73 billion down from $1.83 billion in March 31, 2022. This was due to the loss incurred in the 9MFY2022 and foreign currency (forex) translation losses.
Looking ahead, the group says its staffing numbers are now at an “optimal level” to meet the higher travel demand and higher demand from its customers.
“The business outlook is expected to improve as China’s borders reopen. Flights between China and Singapore were a significant contributor of volume prior to the pandemic,” says SATS.
“Despite headwinds, our underlying business performance has shown improvements as we execute on our twin-engine growth strategy and capture meaningful business value. While cargo volumes have softened, the reopening of China borders is expected to improve volume throughput,” says Kerry Mok, president and CEO of SATS.
“Alongside our strong Singapore focus, we are building geographic and business resilience with the proposed acquisition of Worldwide Flight Services. We are heartened that at the recent extraordinary general meeting (EGM), shareholders gave us their vote of confidence, supporting this transformational transaction and our growth direction. We are working on closing the acquisition and delivering a smooth transition to unlock the synergies of our combined operations and scale,” he adds.
Shares in SATS closed 3 cents lower or 0.99% down at $3 on Feb 13.
