SATS’ net profit jumps by 26.8% to $59.7m

Its stable cost control saved the day.

The airline gateway and food solutions company rode on its operational improvements to offset a 4.2% decline in its earnings.

According to OCBC, SATS took huge hits to its earnings this quarter, headlined by a 9.1% decline in food solutions mainly due to the transfer of its food distribution business to the new JV with BRF S.A. and the weakening of the Yen.

However, OCBC says this was offset by a 2.9% growth in gateway services.

SATS also saw an improved operating margin due to cost management, which also led to a 9.1% decline in operating expenses across all expense categories excluding depreciation and amortisation.

“2QFY16 net margin rose 3.4ppt YoY to 14.1%, helped by a 10.2% increase in contribution from overseas associates and JVs to S$11.9m,” OCBC said.

OCBC also says SATS should experience clear skies going forward, driven by its effective cost control, growth in its cargo business, and growth in overseas associates and JVs.

“Going forward, we believe SATS will continue to record stable growth on full quarter contribution from 3QFY16 onwards having re-acquired Jetstar Group as its client for GS segment (up to 40 flights/day), improving performance from its Japanese subsidiary, TFK – contribution from the recent contract win to support Delta’s flight operations in Tokyo to commence from 3QFY16 but likely toned down by weakening Yen; and lastly strong pipeline of overseas investment opportunities,” OCBC said.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia