SATS' net profit jumps 31.4% to $66.6m

Underlying net profit was $51.6m.

SATS' revenue increased $8.2 m or 2% YoY to $425.8m. Food Solutions’ revenue grew $1.6m or 0.7% to $233.9m whilst Gateway Services revenue improved $6.6 m or 3.6% to $190.4m.

The Group’s expenditure rose $12.1m or 3.3% to $380m, with most expense categories increasing YoY except for the cost of raw materials and licence fees. Staff costs increased $4.7m due to service increment and lower government subsidies, whilst the rise in depreciation and amortisation charges by $1m was in line with additional capital expenditure incurred.

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Higher company premise and utilities expenses of $5.2m were due to the absence of rental rate adjustments made in the same quarter last year, and higher maintenance and utilities costs.

The increase in other costs of $3.3m was mainly from higher equipment maintenance costs, fuel consumption, professional fees and lower grants. Group operating profit for the quarter declined $3.9m or 7.8% YoY to $45.8m.

For the quarter, share of after-tax profits from associates/joint ventures was $28.8m, an increase of $17.1m or 146.2%. This was mainly due to the recognition of $15m negative goodwill arising from the increased stake in a long-term investment Evergreen Sky Catering Corporation (ESCC) from 15% to 25% in the quarter. ESCC has since been reclassified from a long-term investment to an associate following the increased stake.

Profit attributable to owners of the Company was $66.6m, $15.9m or 31.4% higher than the last corresponding quarter. Underlying net profit was $51.6m, $0.9m or 1.8% higher YoY. Earnings per share grew 30.4% to 6 cents.