SATS reports 1.8% lower 4Q earnings of $65.4 mil; brings FY18 earnings to $261.5 mil

In 4Q18, group revenue decreased 0.5% year-on-year to $423.5 million. Food solutions’ revenue declined 2.4% to $228.3 million, while Gateway services’ revenue grew 1.7% to $194.7 million despite the deconsolidation of SATS HK (SHK) in July 2017.

The group’s expenditure fell 0.7% to $377.4 million, largely due to the deconsolidation of SHK which reduced staff costs, office premises and utilities expenses. This was however partially offset by higher raw materials costs, licence fees, depreciation and amortisation, as well as other costs.

Group operating profit for the quarter improved 0.7% year-on-year to $46.1 million. Share of after-tax profits from associates and joint ventures was $24 million for the quarter, lower by 16.7% from last year, underscored by lower contributions from food dolutions’ associates and joint ventures but partially balanced by gateway services’ improved performance.

The quarter also recorded a non-operating income of $8.5 million posted by the group’s Japan subsidiary, TFK Corporation, for the disposal of 100% equity interest in its Brazil subsidiary, Tokyo Flight Kitchen Restaurantes and its investment property.

SATS’s board of directors has recommended a final dividend of 12 cents per share. Including the interim dividend of 6 cents per share, this brings the total divided to 18 cents per share.

Looking ahead, SATS says the robust growth in passenger and cargo traffic and increased demand for high-quality food across Asia present exciting opportunities. The group will continue to improve service and productivity to strengthen the Singapore air hub and grow with its customers and business partners. Beyond Singapore, it will expand our network of 60 airports, to support its customers.

Shares in SATS closed 1 cent higher at $5.35 on Monday.