SATS share price plunge 6.02% after it posted a 14.4% fall in Q1 profits

Earnings per share for the first quarter came in at 4.9 Singapore cents, a dip compared to an earnings per share of 5.7 Singapore cents a year ago.

Food caterer and airport gateway service provider SATS Ltd posted a 14.4% decline for its first quarter net profit on Thursday, attributing the profit fall to ‘macro headwinds’. On Friday, the group’s share price plunged 6.02% in a response to the weak performance.

Net profit for the first quarter was at S$54.7 million, a S$9.2 million decline compared to a year ago. Revenue for the three months was up by 5.8% year-on-year at S$465.1 million, as growth in the gateway services and food solutions segment were offset by a fall in cargo revenue.

Earnings per share (EPS) for the first quarter came in at 4.9 Singapore cents, a dip compared to an EPS of 5.7 Singapore cents a year ago. For the first quarter, SATS posted a return on equity (ROE) of 3.3%, which was higher than the ROE of 3.1% in the fourth quarter.

SATS share price down 6.02% following earnings announcement

The firm’s share price was down by 6.02% or S$0.32 at 1.50pm Singapore time on Friday, at S$5.00. The group had announced its first quarter results after market hours on Thursday.

Year-to-date, the firm’s shares have risen by 7.5%, from S$4.65 on January 2, 2019.

Softening air cargo volume as global economy slows

In its earnings results statement, SATS said: ‘The global economy is showing signs of weakness, as reflected in the softening of air cargo volume. Aviation passenger volumes in Asia continue to grow although more slowly, while rapid urbanisation in the region is still driving demand for safe, high-quality food.’

‘We aim to strengthen our market leadership by continuing to extend our network across Asia-Pacific and digitalizing our operations to enhance service and improve productivity,’ the group added.

Anticipating support from its cruise business

SATS who has a cruise centre management arm and operates Singapore’s cruise terminal Marina Bay Cruise Centre Singapore, said it expects more cruise passengers to select Singapore as a destination. ‘We anticipate that the cruise industry in Southeast Asia will develop to keep pace with burgeoning consumer interest’, the group said.

Read more on SATS share price: what to watch out for its Q1 results

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.