SATS notes drop in revenue and profit for Q3
A combination of labor costs, airline profitability pressure and a weakening Japanese Yen were a few of the challenges cited by SATS as the company reported a decrease in revenue and operating profit for the third quarter of its fiscal year.
For the quarter ending December 31, group revenue decreased 1.1% year-on-year to SGD$465.5 million (US$367.3 million). Revenue from gateway services increased 4.3% to SGD$173.3 million (US$136.7 million) while revenue from food solutions dropped 3.9% to SGD$291.1 million (US$229.7 million), which the Singapore-based company attributed to the weakening Japanese Yen.
Operating profit declined 10.3% to SGD$42 million (US$33.1 million).
For the first nine months, ending December 31 of last year, Group revenue at SATS declined 1.3% to SGD$1.35 billion (US$1.06 billion). Operating profit for the first three quarters of the year declined 6.4% to SGD$129.3 million (US$102 million)
“The operating landscape for SATS remains challenging in view of the ongoing pressure on airlines’ profitability and rising labor costs,” said the group’s outlook for the rest of the year.
The company expects modest growth in passenger traffic at Changi Airport while air freight is expect to only grow marginally, at best.
“The Group will continue to focus on growing scale in our food business and improving connectivity in our gateway business, whilst using automation and technology to counter rising manpower costs,” said the company.
Operating data for the first three quarters can be found here.