SATS posts strong figures in last quarter

Singapore Airport Terminal Service (SATS) announced strong operating numbers all round in the last quarter despite taking a hit a hit from the March earthquake and tsunami in Japan.


The ground services operator counts Japan Airlines as its main customer, accounting for 60 per cent of its revenue, reported Business Times Singapore.


The January-March quarter saw attributable profit rise nine per cent to US$40.66 million, from $37.29 million a year earlier.


Operating revenue for the quarter increased 29.3 per cent to $404.92 million on the back of higher level of activities and the consolidation of Japan-based TFK Corporation (TFK). TFK contributed revenue of $58.22 million.


For the full year to end-March, SATS' attributable profit rose 5.6 per cent to $153.50 million, from $145.32 million. Excluding jobs credit of $13.71 million received in the preceding year and the $4.81 million in M&A expenses, the underlying profit would have increased 20.3 per cent to $158.31 million.


Revenue rose 12.4 per cent to $1.39 billion, from $1.24 billion. The figure could have been higher if not for some exchange rate translation impact.


For example, SATS' topline would have been $29.67 million higher if not for a nine per cent decline in the value of the UK pound versus the Singapore dollar.


Associates and joint ventures contributed some $49.08 million for the year, a 46.1 per cent increase from the $33.6 million a year earlier. Gross dividends from associates/joint ventures peaked at $31.68 million for the year, up 58 per cent from the previous year.


One of the key challenges the company faced, especially during the final quarter, was material cost inflation, though CEO Clement Woon said the company managed to mitigate the full impact of this via a savvy purchasing strategy.


Cost of raw materials surged 41.1 per cent to $115.41 million during the January-March 2011 quarter. Staff costs rose 35.1 per cent to $155.35 million, mainly due to the absence of job credits.


Operating expenditure for the quarter rose 29.8 per cent to $364.66 million, which was higher than the quarterly revenue of $313.26 million SATS chalked up during the January-March 2010 period.


For the full year the rise was 14 per cent to $1.24 billion - a figure equal to the previous full year's revenue.


Aviation continued to be its biggest business, contributing to 59.2 per cent of revenue. Food solutions accounted for 46.1 per cent of revenue, while gateway solutions was 31.8 per cent, and its UK foods business accounted for 21.5 per cent. Singapore accounted for over 60 per cent of its topline.


Flights handled rose 7.7 per cent during the year, while passengers handled rose 7.2 per cent. The company saw a significant increase in catering demand for the premium front cabins, which portends better margins and yields.


Going forward, SATS said it would focus on strengthening its Japan operations by leveraging on the combined competencies within its aviation network.


While it maintained that TFK would not have a material effect on its performance in FY2011-12, it added it would remain vigilant over the "emerging situation in Japan'' and take appropriate actions should the situation deteriorate.
(Source:http://www.cargonewsasia.com)