SATS posts Q1 net profit

Singapore-based SATS said it earned S$65 million in net profit in the first quarter of its financial year. In 1Q FY25, SATS Group’s revenue increased by 15.5% to S$1.37 billion compared to the same period last year arising from both Gateway Services and Food Solutions. Revenue for Gateway Services increased by 12.0% YoY to S$1,059.5 million. This growth was attributed to the increase in air cargo volume driven by high-tech shipments, growth of eCommerce, and the shift from ocean freight due to the Red Sea crisis. Food Solutions’ revenue increased by 29.3% to S$310.8 million due to increased demand for inflight meals. The Group’s expenditure (excluding depreciation and amortisation) increased by 8.7% to S$1.1 billion YoY, in line with the increase in business volume. In 1Q FY25, SATS saw a significant YoY increase in operating profit to S$112.9 million from S$7.9 million. Operating Profit margin also improved from 0.7% to 8.2%, driven by operational efficiencies as revenue scaled up and outpaced the increase in expenditure. The share of earnings of associates and joint ventures increased by 67.1% to S$35.6 million, driven by travel recovery and higher cargo volumes. In 1Q FY25, SATS posted PATMI of S$65.0 million reflecting a significant improvement of S$94.9 million from a loss of S$29.9 million recorded in the same period last year. This improved performance is attributed to scale leverage derived from higher volumes of business handled, in addition to a one-off gain of S$7.2 million from the settlement of an existing loan arrangement from an outgoing local partner in Indonesia. SATS expects positive momentum in the coming quarters. The acceleration of eCommerce, the shift to air cargo because of seaport congestion, and disruption in maritime shipping are expected to continue to underpin demand for air cargo services. According to IATA, global air cargo traffic is expected to grow by 5% in 2024, while global passenger traffic growth is projected at 11.6% in total revenue passenger kilometres (RPK) this year. Notably, Asia Pacific is leading the recovery, with the region expected to contribute half of the world’s RPK growth in 2024, particularly through its robust domestic markets. SATS remains confident to deliver on its commitments to improve financial performance, reduce debt, and strengthen the overall cash position. Kerry Mok (PHOTO: SATS) Kerry Mok, President and Chief Executive Officer of SATS, said, “The S$65 million profit for the first quarter of FY25 is a result of favourable market conditions and our relentless drive towards better cost optimisation and operational efficiency. We continue to gain traction from the integration with WFS as we strengthen our global market position. Our new win with the Shun Feng Group in Liège and the deepening of our collaboration with Kuehne + Nagel are testaments to the strength of our global network. We are also committed to supporting the needs of Singapore’s Changi Airport and have established the Singapore Hub to focus on enhancing Singapore’s aviation position. We are also growing our Food Solutions business with Mitsui, leveraging SATS’ culinary expertise, knowledge of food technology, and high food safety standards to mutually benefit both parties by supporting Mitsui’s distribution network with ready-to-eat meals in different formats to capture the growing demand for convenient food.” For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]