Sats grows Q1 profit 9.1% to S$70.9 million with higher cargo, food service volumes

AIRLINE caterer Sats grew its Q1 earnings 9.1 per cent to S$70.9 million for the first quarter ended June, boosted by growth in aviation cargo and food service volumes.

Revenue for the quarter was up 9.9 per cent to S$1.5 billion. Of this, S$1.18 billion came from gateway services, 11.2 per cent higher than in the year-ago period, due to a larger customer portfolio.

Significant customer wins included carriers Cathay Cargo, Cathay Pacific, Emirates SkyCargo, Riyadh Air and Turkish Airlines.

Sats’ chief executive Kerry Mok in a statement on Wednesday (Aug 20): “Our recent hub management agreement with Riyadh Air further highlights our ability to grow in spite of a volatile environment.”

Sats’ food solutions revenue rose – by 5.6 per cent to S$328.3 million – thanks to the sustained growth in air travel and in-flight meal demand.

With the higher business volumes, the company’s operating expenditure for the quarter, excluding depreciation and amortisation, rose 9.9 per cent to S$1.2 billion.

Looking ahead, Sats expects gateway services revenue to remain resilient, supported by its business mix and global network.

The company also expects the food solutions unit to continue benefiting from growing demand for high-quality aviation meals in the region.

Sats noted that the International Air Transport Association (Iata) has indicated a more measured rate of expansion in global cargo and passenger markets, due to tariffs and trade and operating conditions. However, the company expects to continue outperforming benchmarks.

“Building on the momentum of Q1, we remain focused on enhancing profitability, strengthening cash flows, and maintaining disciplined capital management,” said Sats.

“The company continues to invest in higher-margin specialised services and strategic partnerships to reinforce our position for long-term, sustainable growth,” it added.

Sats shares ended Wednesday at S$3.18, down 1.6 per cent.