Hot stock: Sats rises 11% after swinging back into the black for Q1
It posts a net profit of S$65 million for the quarter from a loss of S$29.9 million
SHARES of in-flight caterer and ground handler Sats gained some ground on Wednesday (Aug 21) morning, after it swung back into the black for the first quarter of fiscal year 2025 on higher revenue.
Sats shares reached a high of S$3.58 shortly after the market opened, rising 11.2 per cent or S$0.36.
A married deal was recorded at 10.02 am, according to ShareInvestor data. It was transacted at S$3.545 at a volume of 15.7 million shares.
By 10.18 am, Sats was the most actively traded counter by both volume and value. Its shares were trading up 10.6 per cent or S$0.34 at S$3.56, with 16.9 million shares having changed hands.
Another four married deals were recorded throughout the day, with the last happening after market preclose at 5.05 pm, when 231,100 shares changed hands at S$3.55.
The counter closed at S$3.59, up S$0.37 or 11.5 per cent.
In its business update on Tuesday evening, Sats posted a net profit of S$65 million for the first quarter ended Jun 30, from a loss of S$29.9 million for the same period a year earlier.
This came as revenue for the period rose to S$1.4 billion, up 15.5 per cent from the S$1.2 billion it posted a year earlier.
The company attributed this to the growth in revenue from both its gateway services and food solutions businesses.
Revenue for its gateway services segment grew 12 per cent year on year to S$1.1 billion on an increase in air-cargo volume from high-tech shipments, growth in e-commerce demand, and the shift from ocean freight due to the crisis in the Red Sea.
Meanwhile, its food solutions segment’s revenue grew 29.3 per cent to S$310.8 million as in-flight meal demand rose.
Citi Research has reiterated its “buy” call on the counter, with a target price of S$3.76.
The company’s core net profit for Q1 made up 22 per cent of Citi’s FY2025 estimates and 30 per cent of consensus estimates, the research team said in a note on Wednesday.
“Sequential traffic recovery at Changi and global air freight improvements, along with Sats and Worldwide Flight Services transformation, should continue to drive earnings and share price higher,” added the analysts.
Last April, Sats acquired global air-cargo handling company Worldwide Flight Services for S$1.8 billion.
