SATS expects 60-70% plunge in Q4 profit and losses in Q1 FY2021

GATEWAY services provider SATS expects its profit to decline by 60 to 70 per cent year-on-year for the fourth quarter ended March, resulting in a fall of up to 25 per cent for the full year. 

In a profit guidance on Thursday evening, the firm added that it expects a loss of between S$50 million and S$70 million in Q1 FY2021, after accounting for government grants. Thereafter, SATS' financial performance will continue to be affected, depending on the duration of the pandemic and when air-travel demand resumes, it said.

The company said: "The global pandemic will continue to impact SATS through the financial year as the operating volumes of flights, passengers handled and meals have dropped 95 per cent from pre-Covid-19  levels.

"While SATS is not able to predict when business conditions will improve, the board and management are putting appropriate cost- and risk-management measures in place during this extraordinarily difficult period, while still preserving and building its capabilities for the future." 

SATS is in a positive net cash position and recently secured aggregate debt financing of S$500 million to fund its working capital needs, contingency cash reserve and strategic growth initiatives. 

It intends to rely on the reprieve from SGX's move to grant an automatic two-month extension for the release of its full-year results. The full details of its performance will be disclosed on or before July 30. 

Shares of SATS closed at S$3.28, up by S$0.21, on Thursday before the announcement.