Sats Q2 bottom line lifted by associates and joint venture contributions, one-off gains

BOLSTERED by higher contributions from share of results of associates and joint ventures, as well as gains on disposal of assets, groundhandler Sats saw its net profit rise 16.2 per cent to S$72.2 million for the second quarter ended Sept 30.

During the quarter, the group recorded a one-off gain of S$5.2 million from the disposal of a 51 per cent stake in Sats HK (SHK), and S$1.8 million from the completion of the restructuring of Jilin Zhong Xin Cheng Food Co and SG IPF. After the sale of the stake in SHK to Voltaire Capital Investment in July this year, SHK has been accounted as an associate of the group.

Stripping out one-off items, underlying net profit rose from S$62.1 million to S$65.2 million.

Revenue dipped 0.8 per cent to S$434.8 million on the back of lower revenue from its food solutions business, while earnings per share rose 0.9 Singapore cent to 6.5 Singapore cents for the quarter under review.

During the quarter, its share of results of associates/joint venture increased from S$11.5 million to S$18 million, owing to higher contributions from both the gateway and food solutions' associates/JVs.

For the six months ended Sept 30, net profit edged up from S$126.2 million to S$129.5 million, while revenue dipped from S$862.7 million to S$861.3 million. Underlying net profit for the half year totalled S$122.5 million, up from S$117.6 million.

The group has declared an interim dividend of six Singapore cents per share, on a par with last year. The dividend is payable on Dec 8.

"The operating environment continues to be challenging, with global economic uncertainty and competitive pressures in the aviation business," the ground handler flagged. "Our productivity initiatives have helped us to offset pricing pressures resulting from lower yields in the airline sector."