Sats posts $43.7 million loss in Q1 as aviation revenue plunges on Covid-19 travel curbs

Sats posted a net loss of $43.7 million loss for the three months to June 30, versus a profit after tax and minority interests of $54.7 million a year ago.
Sats posted a net loss of $43.7 million loss for the three months to June 30, versus a profit after tax and minority interests of $54.7 million a year ago.ST PHOTO: KEVIN LIM

SINGAPORE (THE BUSINESS TIMES) - Sats fell into the red for its financial first quarter as strict lockdowns and travel restrictions across the world caused demand for air travel to evaporate.

The ground handler and food solutions provider posted a net loss of $43.7 million loss for the three months to June 30, versus a profit after tax and minority interests of $54.7 million a year ago, it said in a business update on Monday (Aug 24).

Sats said the drop in group expenditures was outpaced by the fall in revenue, which nearly halved from a year ago. This came as the decline in passenger and cargo movements in the first quarter "significantly impacted" Sats' performance.

Loss per share stood at 3.9 cents for the quarter, compared with earnings per share of 4.9 cents a year ago.

Revenue for Q1 fell 54 per cent to $209.4 million, from $465.1 million a year ago, hit by declines from both its gateway services and food solutions segments.

Sats' aviation revenue fell 72.9 per cent to $110.6 million, but non-aviation revenue grew 73.3 per cent to $96.9 million as the group leveraged opportunities beyond aviation during the quarter.

Gateway services revenue dropped 67.9 per cent to $71.6 million, while the food solutions segment was down 43.7 per cent to $135.9 million.

The food solution segment's relatively lower fall in revenue compared with the gateway services segment was due to a consolidation of new entities which boosted revenue. These entities are Country Foods, Nanjing Weizhou Airline Food Corp and Monty's Bakehouse UK.

Sats' group expenditure decreased by 39.9 per cent on the year to $245.4 million, with staff cost seeing the most significant reduction - down 58.7 per cent to $96.5 million.

The fall in staff cost was due to a combination of factors such as government grants, lower contract services and a reduction in workforce required to manage lower volumes.

Licence fees were also lower in line with smaller aviation revenue.

 
 
 

No dividend was declared for the quarter, unchanged from a year ago. Sats pays dividends on a semi-annual basis for every six-month period ending March 31 and Sept 30, subject to review and approval.

Sats shares closed up $0.01 or 0.3 per cent to $2.92 on Friday.