SINGAPORE (THE BUSINESS TIMES) – Sats on Friday (Nov 12) reported a profit of $13.2 million for the first six months ended Sept 30, reversing a loss of $76.9 million a year ago.
In a bourse filing on Friday (Nov 12), the ground handling and inflight caterer attributed the recovery to higher revenue for the half-year period, growing 29.3 per cent to $569.5 million in tandem with growth in cargo volume, non-travel revenue and resumption of ship calls. This has helped to offset the lower aviation volumes for the food catering business.
Gateway services revenue jumped 61.4 per cent to $257.3 million from $159.4 million, while food solutions revenue increased 12.6 per cent to $310.3 million from $275.5 million. This resulted in operating profit of $4 million for the first-half (HI) of financial year (FY) 2021-22 , from an operating loss of $36 million in the year-ago period.
A tax credit of $8.9 million also helped to boost profits, but was 64.4 per cent lower than the previous year’s $25 million.
Share of results of associates and joint ventures also returned to the black for H1 FY2021-22, contributing $900,000, from a loss of $44.2 million in the year prior. This marks a gradual recovery from Covid-19 with marked improvement from most of the aviation associates and joint ventures.
No interim dividend was declared by the board of Sats, which the group believes is a prudent move to allow for the preservation of jobs and capabilities to support customers as aviation volumes return, as well as pursue opportunities outside of aviation.
Sats sees the Vaccinated Travel Lanes and the easing of border restrictions across the region as helping to improve aviation volumes. The company is looking to catch the rebound in travel with its retained domain capabilities.
With investments in cargo terminals in the Saudi Arabian cities of Riyadh and Jeddah, Sats is expanding its cargo-handling reach in the region, and investing in innovations such as digitally connected command centres for real-time decision-making together with customers by sharing relevant data.
New central kitchens in Tianjin, China and Bengaluru, India are being set up, as well as a large-scale food production facility in Thailand to capture growth in the non-travel segment, which has grown 15 per cent in H1 FY2021-22 and represents 47 per cent of total revenue.