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.
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