SATS share price plunge 2.49% after posting a 23.7% fall in Q4 profit
The group’s net profit for the period fell by S$15.5 million from a year ago to S$49.9 million, due to the absence of one-off gains made a year ago.
In-flight catering service provider SATS reported a 23.7% fall in net profit for the fourth quarter, due to the absence of one-off gains made a year ago.
The group’s net profit for the period fell by S$15.5 million from a year ago to S$49.9 million. For this quarter, SATS received a one-off write back of S$1.2 million tax provision for the disposal of DFASS SATS to KrisShop.
Excluding the one-off write back received this quarter, net profit would have been at S$48.7 million.
One-off items a year ago include a S$11.6 million surplus arising from the finalisation of valuation of the group's associate, Evergreen Sky Catering.
Earnings per share for the quarter came in at 4.5 Singapore cents, compared to 5.9 Singapore cents in the same period a year ago.
SATS share price
The firm which had posted its quarterly results before the market opened on Friday, saw its shares sink 2.49% or S$0.13, to S$5.09 by 2.20pm Singapore time.
The firm had closed higher on Thursday, up by one Singapore cent or 0.19%, at S$5.22.
Year-to-date, SATS shares have risen by 9.5%.
SATS earnings report highlights
SATS said its revenue for the quarter grew 11.3% to S$471.5 million, supported by higher contributions from its food solutions and gateway services businesses.
For the full-year, the company’s revenue rose 6% to S$1.83 billion while net profit eased 5% to S$248.4 million.
SATS’ board has recommended a final dividend of 13 Singapore cents, up one Singapore cent compared to the final dividend of 12 Singapore cents last year. Including an interim dividend of six Singapore cents, total dividend stands at 19 Singapore cents per share.
Going forward, SATS said that the demand for aviation services and ‘high quality food’ in Asia-Pacific continues to grow even as the global economy faces challenges.
The group said it has secured a long-term contract with Singapore Airlines to support them in their transformation plans, and that it will continue to invest in new opportunities in Asia-Pacific's major cities, claiming that its recent investments in India and Malaysia are showing steady growth.
SATS takes up 50% stake in Chinese food company
In a separate announcement on Friday, the firm announced that it is buying a 50% stake in China’s Nanjing Weizhou Airline Food Company for S$31.2 million.
The move will support SATS in gaining frozen food production capabilities and market access in China.
Under the deal, SATS China Co will acquire a 45% stake in the food company for about S$25.5 million. The balance of 5% will be made through the subscription of about S$5.7 million of new shares.
Nanjing Weizhou is an independent aviation food manufacturer in Jiangsu province that produces frozen food and related food components to aviation companies in the country.
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