SATS Q4 profits down 1.8% to $65.4m

Earnings and revenue were hit by the deconsolidation of SATS HK after the sale of its 51% stake.

SATS' profits for the fourth quarter of 2017 dipped 1.8% in a year to $65.4m. According to its financial statement, revenue fell 0.5% in a year to $423.5m after the deconsolidation of SATS HK Limited (SHK) and contributions from food solutions dipped 2.4% to $228.3m, offset by a 1.7% increase from gateway services to $194.7m.

Group expenditure was slashed by $2.6m to $377.4m, as staff costs and utilities expenses fell mainly due to the deconsolidation of SHK. Share of profits from associates and joint ventures slipped 16.7% to $24m due to lower contributions from food solutions’ associates/joint ventures, partially offset by gateway’s improved performance.

SATS' Japan subsidiary, TFK Corporation, posted the gain for the disposal of 100% equity interest in its Brazil subsidiary, Tokyo Flight Kitchen Restaurantes and its investment property.

For the full year, profits jumped 1.4% to $261.5m from last year. Revenue was down 0.3% to $1.72b, due to lower contributions from food solutions offset by growth in gateway services. Share of after-tax profits from associates and joint ventures jumped 9.2% to $71.2m.

SATS gained $10.8m from the sale of its assets and a $4.5m write-back to the profit and loss for the earn-out consideration due on the acquisition of additional equity interest in MacroAsia Catering Services, Inc (MACS).

Other gains included $5.2m from the sale of its 51% equity interest in SHK, $1.8m from the restructuring of Jilin Zhong Xin Cheng Food (Jilin JVCo) and SG IPF Pte Ltd. (SGIPF) in the second quarter, and $8.5m from the sale of its stake in Tokyo Flight Kitchen Restaurantes and its investment property.

There was also a gain of $9.3m from the disposal of the Senoko plant. This was partially offset by a $700,000 loss on the sale of its interest in an associate, International Airport Cleaning Co., Ltd and the dilution of shareholdings from 40% to 28% in its associate, Beijing Airport Inflight Kitchen.