Sats swings into the black for Q4, but group still clocks net loss for full year

GROUND-HANDLER and in-flight caterer Sats on Thursday posted a net profit of S$800,000 for the fourth quarter ended March 31, up from a net loss of S$6.3 million the previous year due to revenue growth from non-travel related businesses.

This works out to an earnings per share of 0.1 Singapore cent for the quarter, compared with a loss per share of 0.6 cent the previous year.

Excluding one-off impairments, the group posted a core profit after tax and minority interests (Patmi) of S$13.2 million for the fourth quarter. Without relief from governments, group Patmi would have been a loss of S$45.4 million.

Revenue for the quarter fell 35.7 per cent to S$278.5 million year on year, dragged by its gateway services and food-solutions segments.

"The group's performance for the quarter was impacted as low aviation volumes persisted due to heightened travel restrictions amid the ongoing Covid-19 pandemic," it said in a statement.

Gateway services' revenue declined 32.4 per cent to S$125.2 million; food solutions' revenue dipped 37.4 per cent to S$154.7 million for the quarter.

The sharp decline in aviation revenue was, however, mitigated by the expansion into security services beyond aviation and resumption of safe cruises in Singapore.

Operating profit for the group in the fourth quarter fell 45.8 per cent year on year to S$22.5 million. Without relief from governments, the group would have posted an operating loss of S$28.7 million.

Group expenditure sank 34.6 per cent to S$256 million, compared with the same period the previous year. Staff costs fell $74.1 million, mainly due to reduced number of staff, contract services, overtime and other variable staff costs, along with government reliefs.

Share of results from associates and joint ventures improved, registering a loss of S$7.3 million, an improvement from a loss of S$31.2 million in the corresponding quarter of the year before.

For the full year, the group swung into a net loss of S$78.9 million from a net profit of S$168.4 million the previous year. Full-year loss per share stood at 7.1 cents versus earnings per share of 15.1 cents last year.

No final dividend was declared in a bid to "preserve more jobs and capabilities", to support its customers as aviation volume resumes and to pursue opportunities outside of aviation, said Sats.

Excluding one-off impairments made in the current financial year, the group's core Patmi would have registered a net loss of S$23.9 million. Without relief from governments, group Patmi would have been a loss of S$320.8 million.

Full-year revenue dipped by half to S$970 million, compared with S$1.94 billion the previous year due to the steep fall in demand for air travel as a result of strict border restrictions since the onset of the pandemic.

Said Alex Hungate, president and chief executive officer of Sats in a statement: "While the pandemic continues to restrict travel, Sats will continue to transform by reshaping our aviation services businesses while expanding non-travel related businesses."

Shares of Sats ended Thursday at S$3.86, up S$0.11 or 2.9 per cent.