10 Quick Things That Investors Should Know About SATS Ltd’s Latest Results

Last week, SATS Ltd (SGX: S58)) released its first quarter earnings update for FY18-19. As a quick introduction, SATS is a company providing food solutions and gateway services solutions. The Food Solutions covers airline catering, food distribution, industrial catering whereas Gateway Solutions is involved in ground handling services of passengers, flights and cargo.

Here are 10 things investors should know about SATS’ latest results:

1. Revenue for the quarter rose 3% year-on-year to S$439.4 million.

2. Operating profit surged 21.3% to S$64.9 million, driven mainly by higher revenue.

3. The conglomerate’s operating margin improved from 12.5% last year to 14.8% in this quarter.

4. As a result, net profit attributable to shareholders for the quarter grew by 11.5% to S$63.9 million.

5. Free cash flow for the quarter was S$72.3 million, up from S$27.7 million during the same period last year, mainly due to higher operating cash flow.

6. As of 30 June 2018, SATS’ cash and short-term deposits stood at S$439.7 million whilst its debt stood at S$106.1 million.

7. Segment wise, Food Solutions revenue grew by 2.7% year-on-year to $239.5 million whilst Gateway Services increased its revenue by 3.4% year-on-year to $199.6 million.

8. Associates and joint venture’s profit after tax contribution declined marginally by 1.3% to S$15.3 million. The fall was mainly due to weaker performance from Gateway Services, offset partially by stronger performance in Food Solutions.

9. SATS did not declare any dividend at the end of this quarter.

10. In terms of outlook, the company commented:

“Despite the threat of global trade uncertainties potentially affecting cargo volumes, we expect passenger volumes in Asia to grow. At the same time, rapid urbanisation in the region will drive demand for safe, high-quality food, and more cruise ships will be deployed in Southeast Asia to keep pace with burgeoning consumer interest. However, pricing pressures will remain.

Our investments in technology and digitalisation are increasing productivity and enhancing our services.

We intend to deepen our collaboration with key customers to support their growth and broaden our unrivalled network of operations across the region.”

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