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Sats reverses into profit of $65 mil for 1QFY2025, revenue up 15.5% y-o-y
Jovi HoPublished on Tue, Aug 20, 2024 / 08:03 PM GMT+08 / Updated 22 minutes ago
Sats has reversed into patmi of $65.0 million for 1QFY2025 ended June 30 from a loss of $29.9 million a year ago.
In an Aug 20 announcement, Sats attributes this improved performance to scale leverage derived from higher volumes of business handled, in addition to a one-off gain of $7.2 million from the settlement of an existing loan arrangement from an outgoing local partner in Indonesia.
Revenue for the quarter grew 15.5% y-o-y to $1.37 billion, while ebitda grew 60.7% y-o-y to $249.1 million.
Operating profit, or ebit, grew more than 1,000% y-o-y to $112.9 million in 1QFY2025, up from just $7.9 million this time last year.
Revenue for Sats’ gateway services unit increased by 12.0% y-o-y to $1.06 billion. This growth was attributed to the increase in air cargo volume driven by high-tech shipments, growth of e-commerce, and the shift from ocean freight due to the Red Sea crisis.
Meanwhile, Sats’ food solutions unit saw revenue increase by 29.3% y-o-y to $310.8 million due to increased demand for inflight meals.
See also: Sats revamps Gateway Services business to fuel growth in Singapore and APAC
The group’s expenditure, excluding depreciation and amortisation, increased by 8.7% y-o-y to $1.1 billion, in line with the increase in business volume.
Total equity increased by $75.2 million over the quarter, reaching $2.6 billion as of June 30. This increase was primarily attributed to the profit generated in the current quarter.
Non-current assets decreased by $67.0 million to $6.5 billion as of June 30. This reduction was mainly due to lower right-of-use assets and intangible assets resulting from depreciation and amortisation. Additionally, there was a decrease in investment in joint ventures and associates following the sale of 9.85% stake in PT Cardig Aero Service Tbk.
See also: Sats reverses into earnings of $56.4 mil for FY2024, plans final dividend of 1.5 cents
Current assets rose by $129.3 million to $2.1 billion, driven by increased trade and other receivables and cash due to improved business performance.
Total liabilities decreased by $12.9 million to $5.9 billion, primarily due to the repayment of $68.1 million of debt and lower lease liabilities in 1QFY2025. This was offset by higher trade and other payables consistent with higher business volume.
For 1QFY2025, operating cash flow increased to $164.2 million, compared to $40.1 million recorded in the corresponding period last year.
Free cash flow was $36.7 million, reflecting an improvement of $125.9 million y-o-y, driven mainly by higher y-o-y operating profit for the quarter.
Sats expects positive momentum in the coming quarters. The acceleration of e-commerce, 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, says the company.
According to the International Air Transport Association (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.
For more stories about where money flows, click here for Capital Section
Sats remains confident to deliver on its commitments to improve financial performance, reduce debt and strengthen the overall cash position.
Kerry Mok, president and CEO of Sats, says: “The $65 million profit for the first quarter of FY2025 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.”
Mok adds: “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.”
Shares in Sats closed 11 cents higher, or 3.53% up, at $3.22.
Jovi HoPublished on Tue, Aug 20, 2024 / 08:03 PM GMT+08 / Updated 22 minutes ago
Sats has reversed into patmi of $65.0 million for 1QFY2025 ended June 30 from a loss of $29.9 million a year ago.
In an Aug 20 announcement, Sats attributes this improved performance to scale leverage derived from higher volumes of business handled, in addition to a one-off gain of $7.2 million from the settlement of an existing loan arrangement from an outgoing local partner in Indonesia.
Revenue for the quarter grew 15.5% y-o-y to $1.37 billion, while ebitda grew 60.7% y-o-y to $249.1 million.
Operating profit, or ebit, grew more than 1,000% y-o-y to $112.9 million in 1QFY2025, up from just $7.9 million this time last year.
Revenue for Sats’ gateway services unit increased by 12.0% y-o-y to $1.06 billion. This growth was attributed to the increase in air cargo volume driven by high-tech shipments, growth of e-commerce, and the shift from ocean freight due to the Red Sea crisis.
Meanwhile, Sats’ food solutions unit saw revenue increase by 29.3% y-o-y to $310.8 million due to increased demand for inflight meals.
See also: Sats revamps Gateway Services business to fuel growth in Singapore and APAC
The group’s expenditure, excluding depreciation and amortisation, increased by 8.7% y-o-y to $1.1 billion, in line with the increase in business volume.
Total equity increased by $75.2 million over the quarter, reaching $2.6 billion as of June 30. This increase was primarily attributed to the profit generated in the current quarter.
Non-current assets decreased by $67.0 million to $6.5 billion as of June 30. This reduction was mainly due to lower right-of-use assets and intangible assets resulting from depreciation and amortisation. Additionally, there was a decrease in investment in joint ventures and associates following the sale of 9.85% stake in PT Cardig Aero Service Tbk.
See also: Sats reverses into earnings of $56.4 mil for FY2024, plans final dividend of 1.5 cents
Current assets rose by $129.3 million to $2.1 billion, driven by increased trade and other receivables and cash due to improved business performance.
Total liabilities decreased by $12.9 million to $5.9 billion, primarily due to the repayment of $68.1 million of debt and lower lease liabilities in 1QFY2025. This was offset by higher trade and other payables consistent with higher business volume.
For 1QFY2025, operating cash flow increased to $164.2 million, compared to $40.1 million recorded in the corresponding period last year.
Free cash flow was $36.7 million, reflecting an improvement of $125.9 million y-o-y, driven mainly by higher y-o-y operating profit for the quarter.
Sats expects positive momentum in the coming quarters. The acceleration of e-commerce, 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, says the company.
According to the International Air Transport Association (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.
For more stories about where money flows, click here for Capital Section
Sats remains confident to deliver on its commitments to improve financial performance, reduce debt and strengthen the overall cash position.
Kerry Mok, president and CEO of Sats, says: “The $65 million profit for the first quarter of FY2025 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.”
Mok adds: “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.”
Shares in Sats closed 11 cents higher, or 3.53% up, at $3.22.
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