As travel restrictions to curb the spread of Covid-19 came into full force in 2Q this year, demand for air travel had plunged to a dramatic low, hurting not just airlines but also SATS, which provides food solutions and gateway services to the aviation sector. Fortunately, the company’s non-aviation business was a bright spot.
In a business update on Aug 24, SATS reported that its non-aviation revenue surged 73.3% y-o-y to $96.9 million in 1QFY2021 ended June 30. This was largely attributed to Country Foods, which became an indirectly wholly owned subsidiary of the company last year. SATS had acquired the remaining 49% stake it did not own in Country Foods from food company BRF for $17 million. Country Foods was previously known as SATS BRF.
According to SATS president and CEO Alex Hungate, Country Foods had seen higher trading and distribution volumes to retail channels and the food services industry here and overseas. This was partly attributed to the expansion of Farmpride’s range of products to include ready-to-eat frozen food. New products, such as Spanish bakery brand Europastry, helped too. “Maybe people were eating more doughnuts during the circuit breaker period,” Hungate quips.