Sats has reported earnings of $20.4 million for FY2022 ended March, reversing from a loss of $78.9 million in the preceding FY2021.
The improvements were due to a pick up in air travel, with revenue for the full year increasing from $970 million to $1.18 billion.
For its 2HFY2022, earnings reached $7.2 million, versus red ink of $2 million in 2HFY2021. Revenue in the same period was $607.3 million, versus $529.5 million in 2HFY2021.
Revenue from food for 2HFY2022 was up 10.8% y-o-y to $330.6 million, while revenue from ground handling services was up 19.5% y-o-y to $275.2 million.
However, with air travel still a way to go from pre-pandemic levels, Sats was still incurring an operating loss of $46.6 million for 2HFY2022, although that’s an improvement from the corresponding figure of $72.5 million in 2HFY2021.
The earnings were made possible because of government relief and support to the tune of $145.8 million for the whole of FY2022. As such, the company believes it is “prudent” to withhold dividend payout for this FY.
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The company notes that while borders have reopened and the travel industry is now meeting pent-up demand, there remains “uncertainty” from potential resurgence of the virus.
As at March 31, the volume of cargo handled has reached pre-pandemic levels. However, flights and passengers were still at 44% and 25% respectively.
The company warns that “mobilisation costs”, inflation, higher wages and reduced government
support to put pressure on its operational costs as Sats gear up towards a recovery in the
aviation sector.
“Sats will continue to grow new revenue streams and to strengthen capabilities to ensure the growth and sustainability of our businesses across the value chain,” says president and CEO Kerry Mok. “Productivity and operational excellence are key drivers of the robustness of our growth,” he adds.
Sats closed May 30 at $4.54, up 0.67% for the day and up 16.71% year to date.
