10 Things to Know About SATS Ltd’s Latest Earnings

Yesterday, SATS Ltd (SGX: S58) announced its financial results for the second quarter and half year ended 30 September 2017.

Here are 10 things investors should know from the earnings announcement:

1. Revenue for the quarter slipped 0.8% year-on-year to S$434.8 million.

2. However, the share of results of associates/joint-ventures, net of tax, surged 56.5% to S$18 million, with higher contributions from both the Food Solutions’ and Gateway Services’ associates/joint-ventures.

3. Underlying net profit climbed 5% to S$65.2 million, which excludes a S$7 million one-off gain on disposal of assets held for sale.

4. Profit attributable to shareholders improved by 16.3% to S$72.2 million.

5. Diluted earnings per share for the quarter was 6.4 cents, up from 5.6 cents a year ago.

6. For the six-month period, revenue fell 0.2% year-on-year to S$861.3 million, but profit attributable to shareholders grew 2.6% to S$129.5 million.

7. The balance sheet remains healthy. As of 30 September 2017, SATS had S$471.4 million in cash and equivalents and S$103.4 million in total borrowings. In comparison, as of 31 March 2017, it had S$505.8 million in cash and equivalents and S$108.6 million in total debt.

8. Operating cash flow more than doubled from S$19.8 million in the second quarter of last fiscal year to S$44 million in the latest quarter. With capital expenditure increasing from S$17.5 million to S$25.4 million, free cash flow improved from S$2.3 million to S$18.6 million.

9. An interim dividend of 6.0 Singapore cents per share was declared for the 2017 second quarter, unchanged from the previous year.

10. Looking ahead, SATS said: “The operating environment continues to be challenging, with global economic uncertainty and competitive pressures in the aviation business. Our productivity initiatives have helped us to offset pricing pressures resulting from lower yields in the airline sector. We expect our recently announced investments in Malaysia and Turkey to make important contributions to growth in the future”.

The firm’s share price closed at S$4.71 on Thursday, giving a trailing price-to-earnings ratio of 20.3 and a trailing dividend yield of 3.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of SATS Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.