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Sats sinks S$6.3m into the red in Q4

GROUND handler and caterer Sats sank into the red for the three months to March 31, the first quarter the company is reporting its financials since the novel coronavirus hit the world.

The listed company recorded a net loss of S$6.3 million for the fourth quarter of FY 2020, against earnings of S$49.9 million a year ago, going by the financial results filed with the Singapore Exchange on Thursday.

Sats said in a statement: "The group’s performance for the quarter was impacted by the Covid-19 pandemic across the region, which led to a significant drop in global demand for air travel. This in turn created substantial adverse impact on revenue and profitability."

Revenue dropped 8.1 per cent year on year to S$433.1 million, despite higher contribution from the food-solutions segment. Its gateway services contributed 17.8 per cent less in revenue as a result of the pandemic. By contrast, its food-solutions revenue was marginally higher by 0.8 per cent.

The share of results from associates and joint ventures fell S$40.1 million, registering a loss of S$31.2 million, compared to an S$8.9 million profit in the previous corresponding quarter.

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Loss per share stood at 0.6 Singapore cent for the quarter.

Sats' net profit declined 32.2 per cent to S$168.4 million for the full year, with earnings per share at 15.1 cents.

Revenue rose 6.2 per cent to S$1.9 billion, while net asset value per share as at end-March was S$1.45, down from S$1.48 a year ago.

No final dividend has been proposed; the full year total dividend is therefore six cents. This will allow the company to preserve more jobs and capabilities to support its customers as aviation volumes resume, and to pursue opportunities outside of aviation, Sats said in the statement.

Alex Hungate, its chief executive officer, flagged that the operating environment in the next financial year will be challenging for its aviation related businesses.

Sats shares ended at S$2.88 or S$0.01 down on Thursday, before the financial results went public.

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